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Vietnam’s e-commerce firms Tiki and Sendo agree to merge amid losses

Xuan Thinh Friday | 05/22/2020 13:18

As of end-2018, Tiki reported accumulated losses of VND1.4 trillion ($60 million) while Sendo suffered VND1.3 trillion ($56 million) losses. Photo: Pixabay.com

E-commerce platforms Tiki and Sendo, backed by JD.com and SoftBank have agreed to merge their businesses, Deal Street Asia cited information from people privy to the matter.

The deal came after local e-commerce firms reported losses in several years and days after Facebook CEO Mark Zuckerberg announced to officially enter e-commerce market by launching virtual shops aiming to counter Covid-19's economic shock.

The news matches with a rumor on this merger in the market months ago. The move is not surprised when most of local e-commerce firms reported losses in years due to fierce competition. Vietnamese consumers prefer shopping through social media channels like Facebook and recently Tiktok.

As of end-2018, Tiki reported accumulated losses of VND1.4 trillion ($60 million) while Sendo suffered VND1.3 trillion ($56 million) losses. The two firms are working with local regulators, including the antitrust authorities, to secure their approval for the deal.

The two Vietnamese e-commerce startups began initial talks for the merger early this year, while the exact contours of the merger and the structure of the deal have not been disclosed. It is understood that the two brands would be retained under a holding company, Deal Street Asia says.

The startups do not have common investors, according to business registration papers DealStreetAsia acquired. Foreign shareholding in Tiki and Sendo stand at 49.7 percent and 63.1 percent, respectively, according to the documents.

Facebook is making a big push into online shopping through Facebook Shops, leaving greater pressure to ailing e-commerce businesses. Facebook has been a popular favorite shopping channel for Vietnamese netizens.  

Source: Deal Street Asia

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