Competition for customers intensifies with more services now offered online

Created 15 January 2019
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Thuy Tien, 26, an office worker who lives on the third floor of an apartment building on Tran Dang Ninh street in Hanoi, chooses to take the stairs every day instead of the lift.

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vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, Vietnam net news, Vietnam latest news, vn news, Vietnam breaking news, delivery service, Grab

Tien can hail a taxi motorbike via Grab

Tien said walking up and down stairs is the only thing she does physically, while all of her other housework is done by someone else or a machine.  

“I order food via Now, hail a taxi motorbike via Grab, and hire house maids via Jupviec.vn. Everything can be done with a smartphone priced at VND3 million,” she said.

Online platforms are booming with new apps, trying to satisfy consumers’ needs. 

At first, the founder of ecommerce site Tiki, established in 2010, focused on selling books online. But now, it sells everything online, from small packages priced at VND4,500 to a Vespa scooter valued at VND200 million. 

Ecommerce sites like Tiki lure customers through sale promotions and price discount campaigns. They are willing to incur losses in exchange for a bigger market share.

Lazada incurred the biggest loss, reaching VND2.743 trillion by the end of 2016. Shopee reported a loss of VND160 billion for 2016, when it joined the market. The loss soared to VND600 billion by the end of 2017.

Tiki, for example, reported an accumulative loss of VND600 billion at the end of 2017. Other big players in the e-commerce market such as Lazada, Shopee and Sendo are also in the same situation.

Lazada incurred the biggest loss, reaching VND2.743 trillion by the end of 2016. Shopee reported a loss of VND160 billion for 2016, when it joined the market. The loss soared to VND600 billion by the end of 2017.

“Players in the market accept losses in exchange for higher popularity of their brands,” Tran Van Quy, CEO of EQVN, said.

A survey by KPMG in 2017 conducted of 18,000 consumers in 51 countries, including Vietnam, found that 34 percent of customers buy products offline, rather than order goods online as they fear slow delivery.

The competition in delivery time is fierce. DHL has launched a within-the-day delivery service, Lazada an express service, Tiki Now within two hours, and Ship60, a startup, within one hour.

E-hailing and food ordering apps have also become more competitive and are trying to reduce delivery times.

The Vietnamese e-hailing market is wide open with the appearance of new names such as Vato, FastGo and Aber, and apps developed by traditional taxi alliances.

The food delivery business is valued at $100 billion as estimated by McKinsey, or 1 percent of the total value of the food market.

US$1=VND22,000

 

Source: Mai Thanh - Bridge

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