Fierce e-commerce: The loss of Lazada and Shopee increased galloping to 2,000 billion dong / year, total accumulated losses of nearly ten trillion - Photo 1.
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The loss of Lazada and Shopee increased to VND 2,000 billion / year, total accumulated losses of nearly VND 10,000 billion


After a period of intensive investment, Vietnam e-commerce market has gradually shaped some big players like Adayroi, Lazada, Tiki, Shopee or Sendo. These businesses are backed by investors with strong financial potential or foreign e-commerce groups.

The attractiveness of Vietnam's e-commerce market has been analyzed and dissected long ago but this is an extremely fierce game. E-commerce industry is often considered the "money race" of giants when the profit margin is extremely low while the costs related to sales, logistics, promotions attract users … are very bigger and bigger.

The key issue of e-commerce sites remains almost solely around the issue of financial potential as these businesses are all very big losses and will continue to lose a lot more to maintain their positions. otherwise I will have to accept the white hand to leave the game.

With the loss of each order, when the transaction size increases, the losses will increase more and more. If in 2015-2016, Lazada's loss of approximately VND 1,000 billion / year has been astonishing in the industry, now both Lazada and the most serious competitor, Shopee, have pushed their faces with losses of over VND 2,000 billion / year.

Joining Vietnam e-commerce market for less than 3 years, Shopee is spending very hard to close the gap with Lazada. Officially launched in August 2016, Shopee lost VND 164 billion right in 2016. In 2017, Shopee lost more than VND 600 billion and by 2018, the loss increased to VND 1,900 billion.

Although the accumulated loss is nearly VND 2,700 billion in the last 3 years, the remarkable point is that Shopee has not generated any revenue. At the beginning of quarter 2/2019, this e-commerce site has just started taking into account the fee of sellers on its platform.

While Shopee's revenue is 0 – because it is not directly selling – both Lazada and Tiki (via Tiki Trading) directly conduct business, which also recorded significant revenue.

The fiscal 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 loss has reached over VND 5,300 billion. Assuming a loss of about VND 500 billion / quarter, by the end of 2018, the accumulated losses of Lazada and Shopee have reached nearly VND 10,000 billion!

  Fierce e-commerce: The loss of Lazada, Shopee increased galloping to 2,000 billion VND / year, total accumulated losses of nearly tens of trillion - Photo 2.

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

With a finer financial source than 2 foreign e-commerce sites, Tiki's losses are also "modest" with VND 760 billion. However, this loss is equal to 2.5 times compared to 2017.

If Lazada or Shopee have a parent company which is a technology group with abundant financial resources, who are always ready to pump capital, Tiki has a lot of domestic and foreign shareholders such as VNG, JD.com, Sumitomo. ..

With financial resources that are not overturned, Tiki always has to make new rounds to supplement capital. In 2018, Tiki mobilized an additional 920 billion dong but also spent most due to the big loss in the year. In order to continue to race in 2019, it is mandatory for the company to make additional calls.

Among Tiki's shareholders, the most notable name today is JD.com – Alibaba's main rival in China. It is likely that JD.com will pump more capital into Tiki to increase its ownership rate compared to the current 25%.


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