SBI-backed Vietnamese e-commerce firm Sendo looks beyond top-tier cities for growth

Tran Hai Linh, CEO of Vietnamese e-commerce company Sendo.

One of the earliest e-commerce companies in Vietnam, Sendo – built by FPT Corporation in 2012 and the subsequent acquisition of marketplace from VNG in 2014 – has followed the hinterland strategy to grow its business.

As e-commerce is a cash burning game, Sendo chose to focus on the provinces and not just the top-tier cities to compete with regional and cash-rich overseas rivals.

During the time of its establishment, CEO Tran Hai Linh said a lot of local people did not have access to consumer products. A long coastal country, two-thirds of Vietnam are rural areas.

“The math for us was how to convince them (consumers) that e-commerce is a solution to improve the quality of life and increase the choices of goods,” Linh told DEALSTREETASIA.

Sendo has come quite a distance since then.

Last year, Sendo raised $51 million in a Series B round led by SBI Group, the investment company split from Japanese giant SoftBank. Linh said the financing is being used for continued investment in technology in order to increase customer experience, as well as in human resources.

Earlier this month, Sendo submitted a revised business registration that saw foreign investors hold more than 57 per cent of the firm. Of that, SBI has the largest stake of 20.65 per cent, while Japanese payment platform eContext Asia has 10.57 per cent, venture capital firm Beenext has 6.27 per cent, and Japan’s Beenos has 5.52 per cent.

While Sendo has never revealed its valuation, the aggregate ownership of overseas investors and the Series B round alone hint that the company has surpassed the $100 million mark.

The Vietnamese e-commerce market has seen significant deal activity since 2016 when VNG Corporation invested in Tiki and Rocket Internet exited Lazada to Alibaba and Zalora to Central Group.

Today, the market is dominated by two overseas companies, Lazada and Shopee, and two local proxies, Tiki and Sendo.

With other e-commerce majors having the financial resources from parent firms like Alibaba (for Lazada), Sea (for Shopee), and Vingroup (for local rival Adayroi), companies such as Sendo and Tiki depend on external capital to compete effectively.

Linh said, this play is judged by the number of customers a company has acquired to have an irreversible advantage, so investors are looking at this sector as a long-term game and are willing to invest in the targeted company to grow them to the leading position.

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