Tracking Vietnam’s $22b ecommerce power struggle

This is an updated version of the article that was published on August 3, 2021.

US$1 billion.

That’s the amount Vietnamese consumers collectively spend every month across Shopee, TikTok Shop, Lazada, Tiki, and Sendo – five of the country’s biggest online shopping platforms.

In Vietnam, the average income for workers is just under US$300 per month, so this spending figure is nothing short of staggering.

In fact, the country’s ecommerce market size grew from US$15 billion in 2022 to US$22 billion this year, according to the e-Conomy SEA 2024 report by Google, Temasek, and Bain & Company. Projections from the study say this figure will reach over US$63 billion by 2030.

In short, Vietnam is a market that commands attention, and it’s attracting some of Asia’s largest ecommerce giants, which has pushed local players further to the edge.

Chinese giants are marching in

For years, the industry couldn’t stop talking about the four-player rivalry dominating Vietnam’s ecommerce space – regional giants Shopee and Lazada have been competing against homegrown platforms Tiki and Sendo.

See also: How a potential merger can shake up Vietnam’s $23b ecommerce market

Tiki, modeled after Amazon, was founded in 2010. Meanwhile, Sendo was spun off from the Vietnamese IT conglomerate FPT in 2012. At one point, the two rivals considered merging to combat foreign competition, but the deal never materialized.

Since then, they have lagged far behind competitors. A Q3 2024 report from market research company Metric shows that sales at both Tiki and Sendo have slowed down drastically in recent quarters.

But even Shopee and Lazada are now on shaky ground.

TikTok Shop entered the Vietnamese market in early 2022 and has fueled the country’s livestreaming sales craze. Some sellers have reported record sales on the platform, with revenue per session reaching millions of dollars.

In a report released in July, Momentum Works estimated that TikTok Shop had already captured 24% of Vietnam’s ecommerce market share in 2023, ranking second and placing ahead of Lazada, which had just 14%.

In October, discount giant Temu officially entered Vietnam after much speculation. This further disrupted the status quo by flooding the market with cheap Chinese goods.

Funding plummets

Any reasons to be cheerful?