Shinhan Financial Group has acquired 10% of Vietnam’s largest homegrown e-commerce platform Tiki for an undisclosed amount in a fresh move by the Korean giant to expand outside financial services.
Shinhan Financial said its two units – Shinhan Bank and Shinhan Card – divided the purchased stake at roughly 7% and 3%, respectively. The deal makes the Korean group the third-largest shareholder in Ho Chi Minh City-based Tiki.
Shinhan Financial expects to leverage the reach of Tiki for its expansion desire in Vietnam, a tech-savvy market with a 100 million population. In addition, the Vietnamese e-commerce start-up plans to go public by 2025 for further growth.
For the 2020-2025 period, the Vietnamese e-commerce market is predicted to expand up to 34% annually to reach $29 billion, according to an industry report by Google, Singapore’s state investor Temasek Holdings, and Bain & Co.
At present, Shinhan Financial Group’s services available in Vietnam include Shinhan Bank, Shinhan Card, Shinhan Financial Investment, Shinhan Life (insurance), and Shinhan DS (information and communication technology).
Tiki stands for Vietnamese words that translate into “searching and economical”. At present, the all-in-one e-commerce platform has more than 20 million customers, over 3,000 employees and an avant-garde warehouse management system, altogether able to handle almost two million orders a month.
Though Tiki is Vietnam’s largest homegrown e-commerce site, it is the second most popular in terms of hits, behind rival Shopee of Singapore’s Sea Ltd. It also seeks to compete with Alibaba-backed Lazada.
Tiki was founded in 2010 by Tran Ngoc Thai Son with his own $5,000 or so. The software engineer, who holds a Master’s degree (University of New South Wales, Australia), wrote the code himself, purchased 100 English books from Amazon, then delivered them on his motorbike across HCMC, Vietnam’s economic hub.
Sumitomo Corp. in 2013 became a strategic partner, holding a 30% stake and making Tiki the first e-commerce firm in Vietnam to receive investment from the Japanese company.
Tiki last November secured $258 million in a series E fundraising led by AIA. The American insurance group invested $60 million to become Tiki’s exclusive insurance partner, which provides health and life insurance services for clients through the e-commerce site.
Other investors in this round include Taiwan’s second-largest telecom operator Taiwan Mobile, UBS AG, Korean investment fund Mirae Asset, AppWorks, and existing investor STIC Investments.