Alibaba has just poured capital into the company that owns the VinMart retail chain, pushing the offline and online retail game in Vietnam more dramatic.
Alibaba and Baring Private Equity Asia have just announced that they will purchase newly issued shares of The CrownX with a total cash value of $400 million, or 5.5% post-issue ownership.
The CrownX is Masan’s consolidated retail consumer platform at Masan Consumer Holdings and VinCommerce (which owns the retail chains VinMart and VinMart+).
After this transaction, VinCommerce will be the leading grocery retailer on the Lazada e-commerce platform (also owned by Alibaba).
|Vietnam’s consumer retail market is being poured in by many foreign capital flows. (Photo: Hai Dang)|
Danny Le, General Director of Masan Group, said that the strategic partnership helps accelerate The CrownX’s transformation into an “all-in-one” platform serving the daily necessities of consumers across the world. Online and offline shopping channels.
Thus, with an investment of more than 9,000 billion VND, Alibaba and investors have set foot in the retail chain with the largest store system in Vietnam, and also own the top 3 e-commerce channel in the country.
Before Alibaba jumped into Masan, a Korean corporation bought a 16.26% stake in Vincommerce General Trading Services Joint Stock Company, following the wave of foreign capital pouring into the Vietnamese retail market.
So far, many domestic consumer goods retail chains have had foreign capital or are owned by foreign countries, such as Aeon Mall (Japan), BigC (Thailand, changed to Tops Market and GO). !), Lotte Mart, recently VinMart. Existing domestic enterprises include Bach Hoa Xanh, Co.op Mart (including Co.op Food), Satrafoods,…
Foreign enterprises have clear plans for development in Vietnam. In the next 5 years, the Thai group plans to invest 1.1 billion USD to expand the market nationwide. Aeon Mall is expected to open about 20 trade centers between now and 2025.
|The number of stores of some large chains in Vietnam by the end of 2020. In which, Co.op Food data as of the end of 2019, Bach Hoa Xanh up to the present.|
Due to owning more than 2,500 retail stores, if VinMart and VinMart+ are included in the block with foreign capital, the number of stores in this block increases markedly, more than 2,600 stores, equivalent to the number of stores in Vietnam. Bach Khoa Xanh, Co.op Food, Co.op Mart and Satrafoods combined. Thus, the essential retail balance is tilted in favor of domestic enterprises, starting to balance with foreign capital.
|Correlation of the number of stores of domestic enterprises (green) with retailers with foreign capital.|
After receiving capital from an e-commerce giant, The CrownX did not hide its intention to bring Vincommerce’s products to Lazada, in order to build a complete O2O (online to offline) ecosystem. With wide coverage, fresh goods, and essential products purchased by Vincommerce on Lazada, it has the advantage of shipping, thus increasing its competitiveness compared to other competitors.
The combination of Lazada and Vincommerce helps one side not have to build an online platform, the other has a wide variety of goods.
However, the online and offline retail game in Vietnam is not easy. Foreign businesses such as Auchan and Parkson have closed their doors in Vietnam. Or some commercial platform Big electronics like Zalora, Lotte.vn,… also left the market.
Currently, the VinMart chain has to confront Co.op Mart and BigC (old), VinMart+ has to face Bach Hoa Xanh, Co.op Food and Satrafoods. Lazada has been surpassed by Shopee in Southeast Asia and is facing fierce competition in Vietnam by Shopee, Tiki, and Sendo.
Bach Hoa Xanh, a rapidly growing chain in Vietnam, has reached 1,828 stores in Ho Chi Minh City and the southern region alone. Recently, the revenue of the next year chain is always double that of the previous year, expected to reach 30,000 billion by the end of this year.
Mr. Tran Kinh Doanh, CEO of Bach Hoa Xanh, said that in the next few years, there is still enough room for this chain to grow by 50-70% in annual revenue, moving towards capturing a large market share in the retail segment of consumer goods.
Meanwhile, Mr. Nguyen Duc Tai, Chairman of the Board of Directors of Mobile World – announced that he would regain the retail market for Vietnam in the next 6-7 years, referring to Bach Hoa Xanh’s overwhelming market share, like how This chain can do with Mobile World and Dien May Xanh.
At the same time, this group is actively building the e-commerce segment to complete the ecosystem, in line with the direction that The CrownX is aiming for. Currently, online revenue in the Bach Hoa Xanh segment accounts for 3% of total revenue, while the technology sales chain accounts for 9% of total revenue.
Lazada’s competitors in the e-commerce segment also have strong advantages. Like Shopee is allowing orders through the Now application – a long-standing food delivery platform in Vietnam, belonging to the same parent company as Shopee. Hay Tiki promotes the consumer goods industry, including the fresh food segment TikiNgon.
It can be seen that the strong capital from Alibaba and its partners pouring into Masan this time has a strong impact on the Vietnamese retail industry both online and offline. Looking at the investment trend, it is clear that foreign investors want to build a strong ecosystem, creating convenience for consumers. Vietnamese enterprises in particular and enterprises in the industry in general are forced to follow this model by building, linking or merging to be competitive.
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