Tiki and Sendo, the two leading e-commerce platforms have reportedly agreed to merge their business in an all-stock deal, according to DealstreetAsia.
|Online shopping on Tiki, a Vietnamese e-commerce platform. Photo: Tiki|
A source confirmed with DealstreetAsia that the agreement has been reached among shareholders. Two e-commerce platforms are working with the Vietnamese competition watchdog to ensure the approval for the deal.
At the time of reporting, both Tiki and Sendo have not confirmed the merger with Hanoitimes.
Earlier, Vietnam Investment Review reported that discussions about the merger had been taking place since August.
The deal is expected to close in July. After the merger, the platforms would keep operating separately at first, Zing reported.
VNG holds a 24.6% stake of Tiki and China-based JD.com owns 25.65%, according to VNG’s consolidated financial report for June 30, 2019. Other shareholders of Tiki include Ubiquitous Traders Pte., Ltd. (nearly 9%), CyberAgent, STIC, and Sumitomo.
Foreign stakeholders hold 49.7% in Tiki’s shares while in Sendo, the figure is 63.1%, according to the DealstreetAsia.
Sendo’s strategy is rural-centric while Tiki targets the urban area. The combination is expected to help the two sides focus on the market more comprehensively, according to local insiders. The merger could also help them to raise more funds in the future.
To maintain the position, both Tiki and Sendo is expected to raise significant amounts of money despite suffering huge losses in the past years.
Established by FPT Group, Sendo secured US$61 million in a series C round last November while Tiki raised around US$100 million in a financing round which was led by Singapore-based private equity Northstar Group last June.
|Online shopping via e-commerce platforms is familar with the Vietnamese people.|
In the first quarter of 2020, Tiki remained the second in terms of web traffic after trailing Sendo for two quarters, according to e-commerce aggregator iPrice’s report.
Due to the effect of Covid-19, the major e-commerce marketplaces, except Shopee, saw their web traffic decreased by an average of 9% compared to the same period in 2019.
Earlier, many small e-commerce platforms withdrew from “the money burning race” including Beyeu.com, Deca.vn, Lingo.vn, Vingroup’s Adayroi, Robin.vn, Vuivui.com, Lotte.vn and e-commerce startup Leflair.
According to a government-approved plan for 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.