Tiki Global no longer an affiliate of Vietnam unicorn VNG

VNG Corporation, Vietnam’s first tech unicorn, has ended its affiliate relationship with Tiki Global after entirely suffering losses from its VND510 billion ($20 million) investment in the Singapore-based company, which owns more than a 90% stake in e-commerce giant Tiki

VNG (UpCoM: VNZ) recalled its two representatives from Tiki Global’s board last October, ending the latter’s status as an affiliate.

The tech firm still holds a 14.61% stake in Tiki Global as a long-term investment but has entirely incurred losses from this deal since 2019.

Founded in 2010, Tiki started as an online bookstore before expanding into e-commerce. Six years later, the company was valued at $45 million, following VNG’s $17 million investment for a 38% stake, which was then the largest shareholder in Tiki.

However, as of June 30, 2019, VNG’s stake in Tiki had declined after Chinese e-commerce giant JD.com made a series of undisclosed investments to raise its ownership to 25.65%.

Tiki has struggled to keep its share in Vietnam’s highly competitive e-commerce market.

Before 2016, Tiki’s main rival was Lazada. However, Shopee's entry significantly reshaped Vietnam’s e-commerce landscape. With an aggressive cash-burning strategy, Shopee overtook Lazada to dominate the local market, capturing a 35% share in 2018, while Lazada’s share dropped to 20% and Tiki’s to 17%.

Since then, the gap between Tiki and Shopee has widened, weakening Tiki’s position in the Vietnamese market.

A report seen last August from YouNet ECI, an e-commerce channel development consulting and analysis company, shows that the Gross Merchandise Volume (GMV) on the four largest platforms, Shopee, TikTok Shop, Lazada and Tiki, reached VND87.37 trillion ($3.45 billion) in the second quarter of 2024, up 10.4% from the previous quarter.

In particular, Shopee continued to maintain its leading position with a huge revenue of VND62.38 trillion, accounting for 71.4% of the GMV market share. TikTok Shop ranked second with VND19.24 trillion, or 22%.

Lazada and Tiki witnessed a decline, with only 5.9% and 0.7% market shares, respectively. This development shows that the online retail market is now a 'two-horse race' between Shopee and TikTok Shop.

Vietnam’s retail e-commerce market was estimated to top $25 billion in 2024, up 20% year-on-year, the Ministry of Industry and Trade reported.

Top e-commerce sites in Vietnam, namely Shopee, TikTok Shop, Lazada, Tiki, and Sendo, earned a total revenue of VND318.9 trillion ($12.62 billion) in 2024, up 37.4% year-on-year, according to local e-commerce analyzer Metric.