Online retailer Lingo.vn suspended its operations last week. The news gave rise to quick rumours about the company running out of money and the investor refusing to put more in. Lingo.vn, established in 2014, is a subsidiary of digital content creator VMG Media JSC. According to from the parent company’s financial statements, the operation incurred a loss of VND150 billion ($6.7 million) until the end of June 2016. 

 

Since 2015, e-commerce in Vietnam has seen thinning competition, as many businesses closed shop and backed out of the market, including online retailer Deca.vn and IDG Ventures-backed Project Lana’s three e-commerce sites Lamdieu, Beyeu, and Foreva, which sold fashion items and cosmetics, maternity and newborn goods, and underwear, consecutively. 

 

Meanwhile, all of Rocket Internet’s e-commerce ventures in Vietnam changed hands. Food ordering service Foodpanda was taken over by local start-up Vietnammm, online clothing and accessories retailer Zalora was sold to Central Group, and Lazada was taken over by Alibaba. 

 

Contrary to the market trend, a number of new companies have recently entered the e-commerce fair. Examples include VNG’s $17 billion investment into tiki.vn, a purchase of 38 per cent in May, or real estate tycoon Vingroup’s launch of e-commerce site adayroi.com last August.

 

Of all the Vietnamese start-ups that secured funding from investors since the beginning of the year, there is only one from the field of e-commerce. Flash sales platform Topmot.vn last week announced that it had secured $1 million funding from a consortium of individual investors, a member ofwhich is a cofounder of US flash sales site Gilt Groupe. Topmot, launched in June, is the only flash sales site in Vietnam at the moment. It currently runs about 40 campaigns a week, each starting at 10 AM every day with a maximum time span of five days. 

 

According to Nguyen Dac Viet Dung, chairman of online marketplace sendo.vn, the Vietnamese e-commerce market is reordering itself. 

 

“Big companies, such as Lazada, Sendo, and Tiki are receiving heavy investments, while smaller companies are closing or focusing on niche markets. This is normal and has happened in other markets,” he elaborated.

 

The remark was somewhat echoed by Erik Jonsson, founder of Topmot and former CEO of Zalora Vietnam. “E-commerce in Vietnam is not easy,” said Jonsson in a recent interview with news site dealstreetasia.com. “There is less and less room for “me too” models—as the market grows, more players are added and competition increases. Unless you solve a specific problem or bring unique value to your customers, it will be hard to grow and thrive in the long-run against competitors that may have deeper pockets than you do.” 

 

Data from the Vietnam E-commerce and Information Technology Agency (VECITA) showed that in 2015 the total revenue from B2C e-commerce in Vietnam was $4.07 billion, up 37 per cent on-year, and accounted for 2.8 per cent of the total retail of goods and services in the country.