A source from the Department of E-Commerce and Digital Economy under the Ministry of Industry and Trade has confirmed that Tiki and Sendo had notified their intended merger to the department, VnExpress reported..

The e-commerce market has witnessed a money-burning race in Vietnam. Photo: VnExpress.

Last month, DealStreetAsia reported that major shareholders including Tiki's JD.com and Sendo's SoftBank Ventures Asia had agreed on the merger. The two sides are working with the Vietnamese authorities on the merging procedures.

A representative from the department told VnExpress that the merger of the two e-commerce platforms would be beneficial for both as they can take advantage of each other to develop and make the competition of e-commerce platforms in Vietnam more balanced.

"After the merger, it remains to be seen what their business model will look like, but this merger will definitely make the race in the e-commerce market more exciting," he said.

Under Circular No.47, guiding Decree No.52 on e-commerce, e-commerce platform’s change of ownership or transfer must be notified to competent agencies.

At the time of reporting, both Tiki and Sendo have refused to confirm the merger with Hanoitimes.

E-commerce is still the money-burning race that has seen many small e-commerce platforms drop out including Beyeu.com, Deca.vn, Lingo.vn, Adayroi from Vingroup, Robin.vn, Vuivui.com, Lotte.vn and e-commerce startup Leflair.

The merger between Tiki and Sendo could create a major force for national e-commerce platforms to continue competing with two foreign ones including Shopee, backed by Tencent; and Lazada, which is a subsidiary of Alibaba.

The representative of the Department of Electronic Commerce and Digital Economy commented that capital is an important factor in this industry. "Capital, market insight, long-term investment plan and leveraging their own development will keep the platforms in the market longer," he said.

According to a government-approved plan on the development of e-commerce by 2025 released on May 18, revenue from online sales of business-to-consumer e-commerce, known as B2C e-commerce, is set to grow by 25% per year to US$35 billion, accounting for 10% of total goods retail sales and service revenues.