Rushing to “burn money”, Lazada – Shopee – Sendo – Tiki made a loss of 5,000 billion dong in just one year, the total accumulated loss exceeded 12,500 billion dong.

After a period of drastic investment, the Vietnamese e-commerce market has gradually shaped some 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 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 still lingers almost only on the issue of financial resources when these businesses are making huge losses and will continue to lose a lot more to maintain their position. if not, he will have to accept the hand leaving the game.

With the loss on each order, the current trading scale increases, the same level of losses more and more. 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 have pushed the loss of the site to over VND 2,000 billion / year.

If in 2016, the loss of the “Big 4” group of e-commerce industry was only VND 1,700 billion, in 2017 it has doubled to VND 3,400 billion and in 2018 continued to increase by one and a half to VND 5,100 billion.

Entering 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.

Although accumulated losses of nearly 2,700 billion in the past 3 years, the remarkable point is that Shopee has never generated revenue. It was not until the beginning of the second quarter of 2019 that this e-commerce site began to take into account the charging of sellers on its platform.

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 expenses as well as selling expenses.

By always accepting outstanding losses compared to the industry, as of March 31, 2018, Lazada’s accumulated losses amounted to more than VND 5,300 billion. Assuming 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 huge losses, but Lazada’s charter capital for many years has remained at 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 loss of Tiki and Sendo is somewhat “modest” when the losses were only VND 760 billion and VND 700 billion, respectively, in 2018. 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.

Tiki, Sendo and Momo are the most tech-raising enterprises in the 2015-2018 period

Having raised capital, Sendo and Tiki are still bright as the next unicorn?

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.

Although there are still large losses, the value of Sendo or Tiki has increased significantly through each round of funding. With an additional US $ 61 million raised for a 14.6% stake, Sendo’s valuation has risen to US $ 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.