According to DealStreetAsia, the two largest domestic e-commerce sites remaining in the market, Tiki and Sendo, had talks to discuss the merger.
Currently, both sides Tiki and Sendo have not commented on the information. Normally, when the negotiation process (if any) is taking place, the parties rarely make statements about “leaking” information, even denying it.
If a merger plan is agreed, it is easy to see that it will be good for both of them to reduce a strong competitor and create a new company with strong potential to compete with the foreign business duo. Lazada and Shopee.
The key issue of e-commerce sites still lingers almost entirely on financial potential issues when these businesses are losing money 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 more the trading size increases, the more the losses are increasing. In the period of 2015-2016, the loss of approximately VND 1,000 billion / year of Lazada has been astonishing in the industry, now both Lazada and Shopee’s biggest competitor have pushed the ground loss to more than 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.
By the end of 2018, Tiki’s accumulated losses were nearly VND 1,400 billion and Sendo lost nearly VND 1,300 billion.
Currently, Lazada is wholly owned by Alibaba and Shopee is wholly owned by SEA, so these two e-commerce sites only have to worry about running and developing the market and the working capital has been taken care of by the parent corporation. Only in 2019, Shopee was poured nearly VND 2,500 billion by SEA. Meanwhile, Tiki and Sendo constantly have to search for funding rounds to keep money running while the level of “burning” money has not shown signs of stopping.
By constantly welcoming new shareholders, the shareholder structure of both are quite fragmented.
By the end of November 2019, Sendo 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 foreign big shareholders including SBI, Beenext, Econtext Asia, Daiwa …
Not publicly announced, Tiki also raised capital twice in 2019 in June and December. The two main shareholders are still VNG (24.6%) and JD.com (21.9%). Other significant shareholders include Ubiquitous Traders Pte Ltd (nearly 9%), CyberAgent, STIC, Sumitomo …
Shopee is pouring nearly VND 2,500 billion by SEA in 2019
Although there are still large losses, the value of Sendo or Tiki has 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 (start-up valued at over US $ 1 billion) after VNG. The merger, if done, could immediately form a new unicorn.