Viet Nam News
Shopee, an online shopping platform, recently announced that its parent company, Sea Limited, has listed on the New York Stock Exchange. Việt Nam News speaks with Pine Kyaw, Managing Director of Shopee Vietnam, about the listing and the company’s plans in Việt Nam.
It has been two years since your company came to Việt Nam. Can you tell us how the company is doing and what is the difference at Shopee between now and two years ago?
Pine Kyaw, Managing Director of Shopee Vietnam
The last two years have been a successful run for us as an e-commerce platform, not just in Việt Nam but also in the region. In all countries and territories, we are doing very well. Collectively, we made it US$ 3 billion in GMV (Gross Merchant Volume) and more than 50 million downloads across all markets. In Việt Nam particularly, the number of downloads and sellers are 5 million and 350,000 sellers, respectively.
Việt Nam is among those with the stronger potential, is a strongly performing country. I think it is also because of the size of the market. I think the growth has exceeded our expectation tremendously. We are very pleased with our performance over the past two years. I think by 2025, Việt Nam’s e-commerce market will grow from US$1.7 billion to $7.6 billion. So there is a lot of room for all players, and hopefully our goal is to ride this wave to grow with the market.
The advantage for Shopee is that we built an eco-system around mobile while other platforms started off a lot more on desktops. To an average consumer this is just a simple different, but from a company perspective, the overall strategy, capabilities and abitilites are much different. We took a first bet on mobile and that is the huge difference for us, resulting in much cleaner and smoother user experience on mobile.
The second thing we pride ourselves on is being more of a social platform than just a buy-and-sell one. Because of the social aspect, a plenty of features are catered to. One example is that you can easily check the sellers and follow them on Facebook of Instagram. In addition, we are providing more engagement activities, our brand ambassador - singer Sơn Tùng M-TP is also joining us.
Your parent company, Sea Limited, recently listed on the New York Stock Exchange. How will the listing change your company’s investment in the region and in Việt Nam?
SEA’s IPO has been a goal of the founder. So this was a natural step for them. We have a couple of benefits from the IPO. One of the benefits is more money for investment.
For Việt Nam, it will benefit us in terms of ability to do more and specifically. For example, what we are looking to do is to double the headcounts. We are looking to invest in a new office because the number of employees is growing. Of course, it gives us more ability to improve products, engage better with buyers and sellers and, overall, increase awareness of Shopee in Việt Nam and in most countries.
Also in Việt Nam we are launching a TV commercial featuring singer Sơn Tùng M-TP. We are launching the TVC across the nation. Over two years we have built a relatively stable product, and right now the next challenge we want to tackle is awareness. We want to build awareness across this whole region about the platform. So, we are investing in marketing heavily.
How is Shopee faring in Southeast Asia, where internet and smartphone penetration is still low compared to the US and China? What is the Vietnamese market’s contribution to your business in the region?
China is a bit of an exception because of the ecosystem for e-commerce. I would think across the region, Việt Nam has one of the higher internet and mobile phone penetration rates. Việt Nam’s online retail sales as percentage of total retail sales is 3 per cent. The global average is about 7 per cent and in China it is about 14 per cent. Obviously, there is a lot of potential in Vietnam market.
In addition, Việt Nam definitely has the right elements to grow - a young population, rising consumer class and high smartphone and internet penetration. When you put these elements together, e-commerce is definitely a very ripe industry to grow in Việt Nam.
What are your plans for 2018? How will you assist your merchants, who are micro, small and medium-sized enterprises?
Next year we will have many improvements. For example on the sellers side, one of the things we are trying to do is to help sellers be more independent and use the tools that we created more efficiently. We are trying to introduce paid ads to sellers. In Việt Nam, there are a lot of offline sellers, so we are trying to create programmes where they can understand how to come to e-commerce by just looking at all the different tutorials and materials online.
For the buyers side, it is constant hard work to bring them the latest assortment, which is engaging more sellers who come on board, bringing them the best prices and making sure that the delivery of the service is excellent so that they can get products on time and at the right time.
It is a part of our initiative where we talked about getting offline sellers on board. So what we are doing is looking at very micro sellers, hopefully we can expand that to go to bigger sellers, and we have them on board already. But the key thing that we need to do is to educate the market on how to get sellers to use e-commerce platforms like Shopee. Next year we will create a series of tutorials and videos to help sellers come on board. Because you need to teach them on how to use the platform, how to buy and sell, take pictures, how to upload their scheme, etc. There is a lot of things that can be done for them to sell sufficiently to be on the platform.
How do you see e-commerce in the country next year? What are the new trends likely to dominate the market?
I am very positive about it. There is tremendous growth for the next 10 years. As of now the percentage of online retail sales is still low and there are lots of right elements like smartphone penetration, young population, market shall grow very well. So we are very positive about the e-commerce market in Việt Nam.
As for e-payment, it is something we are watching very closely. The challenge in Việt Nam specially is that it is very driven by COD (Cash on Delivery) payments, and so I am not so sure how e-pay would develop in Việt Nam. Because it is very hard to change user behavior, as of now the percentage of credit card purchases is still very small. There are signs that the shift towards more card payment is happening, whereas a shift to e-payment or mobile wallet - we are still monitoring that. VNS