Vietnam’s Sendo bets on groceries to revive ecommerce fortunes

Facing stiff competition from well-capitalized regional marketplaces like Shopee, TikTok Shop, and Lazada, many of Vietnam’s ecommerce players have been forced to differentiate their offerings and focus on segments that general platforms often leave aside.

For Sendo – a company founded in 2012 as part of Vietnam’s largest IT services company, FPT Corporation – its future growth and profitability lie in the realm of online grocery.

“What we have seen is that ecommerce is a very competitive, ‘red ocean’ type of business, where it’s very difficult to make money,” Tran Hai Linh, co-founder and CEO of Sendo, tells The Business Times.

Sendo co-founder and CEO Tran Hai Linh / Photo credit: Sendo

Sendo was among the first movers in Vietnam’s ecommerce space and for several years competed to be one of the most popular marketplaces in the country.

Venture capitalists were rushing to inject money into the local champion, which has raked in at least US$130 million from multiple fundraising rounds over the past decade.

However, it was unable to defend its leading position, trailing foreign players and its local rival, Tiki.

Sales on Sendo’s marketplace in the first nine months of 2023 were just over 0.1% of total revenue on the other four platforms, according to figures from Metric, a Vietnamese ecommerce data platform.

Linh acknowledged that the firm fell short in the race for the top spot and decided to instead embark on a new “profitable pathway” four years ago.

“We still do ecommerce, but we have to figure out a way for ourselves that is totally unique and defensible,” he says.

Untapped segment

While other ecommerce giants were still embroiled in a cash-burning battle to acquire customers in the marketplace arena, Sendo concentrated its efforts on the online grocery segment.

Linh viewed the segment as a “blue ocean” market, which is much bigger than present-day ecommerce and “so difficult that nobody wants to compete.”

For decades, millions of people in Vietnam purchased their groceries from street stalls or wet markets. With the Covid-19 pandemic forcing shoppers to go online, Sendo latched on to this opportunity and launched Sendo Farm to provide fresh food and other necessities to customers with just a tap on their mobile phones.

Pivot to profitability

Ongoing struggle to differentiate