HONG KONG–Chinese ecommerce giant JD.com is set to increase its stake in Vietnamese ecommerce portal Tiki, the firm said Tuesday, positioning itself to capture one of the world’s fastest growing online markets. The size of the funding was undisclosed but if the deal is approved JD.com will become one of Tiki’s largest shareholder, following a reported $44 million injection into the site last November.
Southeast Asia is a key area of growth for ecommerce players. JD.com launched its Indonesia business in 2015 and formed its joint venture with Central Group in Thailand last September. Central Group has a considerable portfolio in Vietnam including the Zalora Vietnam business although most of its other assets are brick-and-mortar retail. JD.com’s biggest rival, Alibaba Group, has a majority stake in Lazada, which operates throughout the region.
Online retail sales in the country are estimated to grow at 20 percent a year over the coming two years, according to a report from state media Vietnam News Agency quoting Lai Viet Anh, deputy director of Vietnam’s E-commerce and Information Technology Agency. The country’s total retail e-commerce sales is also set to reach $10 billion by 2020, it said.
JD.com has shown a considerable appetite for acquisitions striking deals with Farfetch and Vipshop in the last year, as it spars directly with the incumbent Alibaba. On Monday, Reuters reported that JD.com, which prides itself on providing end-to-end logistics thereby guaranteeing product authenticity, had kicked off a fundraising round for its logistics unit of at least $2 billion, with plans to list the business overseas.
Financials for Tiki were not disclosed other than the its topline had seen triple-digit growth annually over the last seven years, three times the industry average. JD.com will partner with Tiki in a range of areas including merchandising, cross-border trade, logistics and fulfillment, technology, financing, and operational capabilities.
“We are very excited to continue our Southeast Asia expansion with Tiki, a company that has a deep understanding of Vietnam and a reputation for outstanding customer service,” said Winston Cheng, president of international at JD.com.
“With JD’s expertise in leveraging social media for e-commerce, Tiki’s partnership with VNG in social network and mobile payments is a natural fit as we aim to provide differentiated services to suppliers and consumers in Vietnam. We look forward to working with Tiki to deliver a truly world class e-commerce experience to Vietnamese consumers.”
“We are delighted to partner with JD.com, China’s most trusted online retailer, as we enter a new phase of growth,” said Son Tran, Tiki’s founder and ceo. “JD and Tiki share the same business philosophy: to win market share by winning consumers’ heart. Since inception, Tiki has always focused on best-in-class, authentic shopping experience and amazingly fast delivery. We believe JD.com, with its proven track record in superior user experience, procurement, logistics, and technology will be an invaluable asset for Tiki as we work to become Vietnam’s top e-commerce platform.”
Founded in 2010, Tiki’s vision is to become Vietnam’s largest and most trusted full category e-commerce platform.