Deal focus: Vietnam’s Sendo embraces B2C

The near-term development plan for Vietnamese C2C e-commerce player Sendo might as well have been lifted from China’s Alibaba Group. The company will use the proceeds from its recent $51 million Series B round to fulfil two objectives: launch SenMall, a B2C marketplace modelled on Tmall; and establish SenPay as Vietnam’s preeminent mobile payments platform, much like Alipay in China.

It is therefore somewhat ironic that, as the battle lines are drawn between Alibaba and Tencent Holdings across Southeast Asia’s internet space, Sendo has no Chinese strategic backing. China and Southeast Asia-focused SKS Ventures and SoftBank Ventures Korea came into the Series B, but the investor roster remains dominated by Japanese names. Beenos and eContext Asia have appeared in both funding rounds, alongside Sendo’s parent, local IT player FPT Group. The Series B was led by SBI Group and featured Daiwa PI Partners and Beenext, a VC firm established by former Beenos executives.

The expansion into B2C brings Sendo up against Alibaba-owned Lazada, while Tencent has an indirect interest in local player Tiki, through JD.com and VNG Corporation. However, Nao Ito, an operating partner at Beenext, which invests in Southeast Asia and India, doesn’t see e-commerce as a zero-sum game. “It doesn’t mean Sendo is 100% competing with Alibaba or Tencent or JD.com, it’s more about the broader opportunity,” he says.

Frost & Sullivan projects that the country’s e-commerce market will be worth $3.7 billion by 2020, up from $1.7 billion in 2016. Sendo expects to share in this growth, with its gross merchandise volume (GMV) on track to surpass $1 billion by 2020, having reached an annualized level of $330 million. But the company’s route to the top over the last six years has not been through mainstream channels.

While Lazada adopted a retail model and concentrated on major urban centers, Sendo took its marketplace to lower-tier cities. “With the economic development, people in tier-two cities have higher incomes and better internet access – they want to buy thousands of goods,” says Nguyen Dac Viet Dung, the company’s chairman. “The barriers are credibility and high logistics costs. We are trying to build trust and optimize logistics costs to help these people buy quality products at reasonable prices.”

Jack Chen, CEO of SKS Ventures, believes Sendo has done the hard part, establishing its name among the 300,000 mom-and-pop operators that make up its C2C seller base largely through word-of-mouth marketing. SenMall is intended to facilitate a movement towards a more managed type of merchandizing, with participation from larger brands and Sendo playing more of a role in logistics and inventory management.

The final piece of the puzzle is SenPay, which might prove to be the most valuable as Sendo appears to have stolen a march on its rivals. All transactions on the platform are processed via the SenPay wallet and 30% of buyers also use the system for online payments. “Only a handful of payment providers are licensed by Vietnam’s central bank and Sendo is the only e-commerce player,” notes Beenext’s Ito.

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• Topics
• Southeast Asia
• Consumer
• Financials
• Early-stage
• Vietnam
• SBI Holdings
• SOFTBANK Ventures Korea
• e-commerce
• Financial Services
• TMT