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The Total Accumulated Loss Of Lazada - Shopee - Sendo - Tiki Exceeded VND 12,500 Billion

Friday 20, 12 2019
If in 2016, the loss of the "Big 4" group of e-commerce industry was only VND 1,700 billion, in 2017 it doubled to VND 3,400 billion and in 2018 continued to increase by one and a half to VND 5,100 billion.
The Total Accumulated Loss Of Lazada - Shopee - Sendo - Tiki Exceeded VND 12,500 Billion

After a period of drastic investment, the Vietnam e-commerce market has gradually shaped a number of big players like Adayroi, Lazada, Tiki, Shopee and Sendo. The suspension of Vayroup's Adayroi e-commerce site to implement at the structure, merging with VinID continues to show the fierce level of the market.

The e-commerce industry has often been compared to the "money race" of the giant when the profit margin is extremely low while the costs related to sales, logistics, promotions attract users ... are getting bigger and bigger.

The key issue of e-commerce sites still lingers almost entirely on financial potential issues as these businesses are losing money and will continue to lose a lot more to maintain their position or they will have to leave the game empty-handed.

With the loss on each order, now the more the size of the transaction increases, the more the same loss is increasing. If in 2015-2016, the loss of approximately VND 1,000 billion/year of Lazada was astonishing in the industry, now both Lazada and Shopee's biggest competitor has pushed the loss of the site to over VND 2,000 billion/year.

The total annual loss
accumulated losses

Entering the Vietnam e-commerce market in less than 3 years, Shopee is spending very hard to close the gap with Lazada. Officially launched in August 2016, Shopee lost VND164 billion in 2016. In 2017, Shopee lost more than VND 600 billion and by 2018, the loss increased by 3 to VND 1,900 billion.

While Shopee's revenue is zero - because it doesn't sell directly - both Lazada and Tiki (via Tiki Trading) are directly involved in the business, thereby also recording significant revenue.

The financial year ended on March 31, 2018, Lazada's revenue soared from VND 1,100 billion to VND 2,800 billion. However, the loss also nearly doubled from VND 1,200 billion to VND 2,150 billion, mainly due to the increase in financial costs as well as selling expenses.

By always accepting outstanding losses compared to the industry, as of March 31, 2018, Lazada's accumulated losses reached over VND 5,300 billion. Assuming that the loss is still about VND 500 billion / quarter, by the end of 2018, the accumulated losses of Lazada and Shopee will reach nearly VND 10,000 billion!

Despite a huge loss, Lazada's charter capital for many years has remained at VND 15 billion. All operating capital is supported by the parent company - formerly Rocket Internet and now Alibaba Group.

With tighter financial resources than the two foreign e-commerce sites, the losses of Tiki and Sendo were somewhat "modest" when only losses were VND 760 billion and VND 700 billion, respectively. Both companies' losses have more than doubled compared to 2017.

If Lazada or Shopee have parent companies of technology corporations with abundant financial resources ready to pump capital, Tiki and Sendo have many domestic and foreign shareholders.

With no abundant financial resources, Tiki always has to make new calls to supplement capital. In 2018, Tiki raised another 920 billion dong but also spent almost due to the large loss in the year. To continue racing in 2019, the company must call for additional capital is a mandatory requirement.

acutal capital rasied between 2015-2018

Having raised capital, may Sendo and Tiki still compete?

In June 2019, Tiki raised a significant amount of capital from new and existing investors, but the exact number was not disclosed. The two main shareholders of Tiki are still VNG and JD.com.

By the end of November 2019, Sendo also announced that it had raised an additional US $ 61 million in Series C funding round. After this round of funding, foreign investors held 61.1% of Sendo's charter capital. FPT is still the largest shareholder besides major foreign shareholders including SBI, Beenext, Econtext Asia, Daiwa ...

According to Sendo CEO Tran Hai Linh, the company plans to use the raised capital to expand the integration platform for both sellers and customers, invest in artificial intelligence and machine learning to improve customer experience.

Despite big losses, the value of Sendo or Tiki increased significantly through each round of funding. With an additional $ 61 million raised for a 14.6% stake, Sendo's valuation has risen to $ 400 million.

Both e-commerce sites are assessed as having the potential to become Vietnam's next technological unicorn after VNG. Of course, for this to happen, the condition still needs to be to raise more capital so that it can continue to increase its position in the context of increasingly fierce competition.

Related Post: Vietnam takes up half of the top 10 Ecommerce sites in SEA

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Business

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