E-commerce platform targets double-digit growth in Viet Nam

Tuesday, Aug 08, 2017 08:00

Staffs of Shopee Vietnam at work. The company entered Viet Nam last year and target to reach a double digit growth in the second year operating in the country. —VNS Photo

With a population of 90 million, many of whom are young people, Viet Nam is alluring for e-commerce companies. Many of them have entered the market.

Viet Nam News speaks with Pine Kyaw, Managing Director of Shopee Vietnam, about doing business in the country and how he sees its e-commerce market.

When you entered Viet Nam a year ago you were a young e-commerce company. How did you fare last year and what were the bright spots and challenges? What do you foresee this year?

Shopee is an e-commerce platform in Southeast Asia and Taiwan. Last year we made a soft launch in Viet Nam in May 2016. The official launch was in August 2016.

Within one year we have grown tremendously, and our performance has far exceeded our expectations.

We have made several enhancements to our product offering, such as upgrading the platform to be user-friendly for both desktop and mobile users, setting up a 24/7 customer service team and scaling up our seller programme to provide them with the tools and services to help their business grow.

Since the official launch, we have had five million downloads and a 133 per cent increase in listings, culminating in a total of four million listings to date.

Regionally, the company has achieved an annualised gross merchandise volume of over US$3 billion with more than 40 million downloads.

Next year we are targeting double-digit growth.

The challenges we have faced are related to infrastructure and payments: Vietnamese are very high on cash on delivery. And the online business is still relatively new in Viet Nam.

Can you tell us about your strengths and outstanding features? How has your company been competing with its rivals?

Pine Kyaw , Managing Director of Shopee Viet Nam

I think we are focusing a lot on sellers to start with. It’s not very intuitive, but our focus on sellers means we help them sell better on our platform. For example, we help a seller in HCM City who wants to sell in Ha Noi market: How do you facilitate that? We bring all the sellers on board, and we have third-party logistics (3PL), Shopee guarantee and other services to make sure the sellers are able to sell their products everywhere in Viet Nam on our platform.

And also we have programmes like Shopee University, where we bring new sellers together, train them, tell them about the challenges in the market, give them feedback on what to do online, how to pack their goods, how to take pictures, how to respond to buyers to meet their needs. So these are the things we pay attention to, and when you have sellers giving good service to buyers, you get repeat purchases, and that’s where the marketplace model kicks off.

How do you see the potential of e-commerce in Viet Nam, especially in comparison with the seven other markets where your company operates?

Viet Nam is definitely one of the key markets for us. The country has a lot of potential with young, educated population. We also have people who are on their phones all the time. And we have a wide range of entrepreneurial people who are selling a wide variety of stuffs.

The strength is obviously the size of the market, just the sheer population. We have 95 million people here. In Singapore it’s very small, 5 million. In Malaysia, 30 million, Thailand is 60 million, Philippines is 90 million. And the biggest market is Indonesia, where there are 300 million people. So Vieät Nam is quite huge compared to other countries; that’s one of the key points.

What is the biggest challenge you see in the market: payment methods or customer trust?

So trust is one of the big issues we are trying to overcome: they still really don’t trust online purchase and so it takes a bit of education. We give them incentives, they try it once, hopefully get a good experience, and try again. The second issue is cash on delivery. If everything is electronic, the overall process has a lot less friction, but if you use cash, then you have to pass the cash to the 3PL, then to the seller; so yeah, a lot of friction in the process. To fix that, we have been working very closely with the 3PL, we have to listen closely to our buyers, sellers, logistics, and then find the right solution.

How do you plan to expand?

The e-commerce industry is very nimble, which means it changes very fast because consumers can change very fast. Today you can have buyers shopping on one platform, then another player comes in and can just take customers. So the key for us is to listen actively to our buyers: What do they want and how can we meet their needs? So that is our strategy. To be honest, it’s not very sexy, but that has been our focus over the year: What do customers want, when do they want it, how do they want it?

We are looking at a couple of things to increase Viet Nam’s contribution to the company. For example, we are seeing a lot of big brands starting to work with us, we are seeing a lot of buyers wanting to buy online. So we are piloting a section to cater to the big brands and also buyers who want to buy random stuff. So that’s one initiative we are driving. We have to see how that pans out, right? So right now our model is to drive more customers to use our service. We have free shipping, which is a hook for buyers. — VNS

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