Vietnam’s e-commerce competition heats up

Analysts said competing by cutting prices by up to 50% is an old story, and with customers’ demand for good service increasing, delivery times have become a key factor.

Alexandre Dardy, CEO of the country’s largest online shopping platform, Lazada, said besides increasing the number of merchants and products, his company would soon reduce delivery times.

The competition between shopping websites has now switched focus from prices to rapid delivery.

Currently the average delivery time that Lazada offers customers is more than two days, with urban areas served faster than rural for obvious reasons.

At the end of last year the company tied up with AhaMove, a motorbike-based delivery service, and began a new delivery schedule that enables customers to get their product within just 60 minutes in certain cases.

Another online shopping website, tiki.vn, is also taking measures to improve its delivery process. Currently its average delivery time is two to three days.

Tran Ngoc Thai Son, director of tiki.vn, said product quality and delivery time are the most important factors for customers.

His company has begun to deliver within 24 hours, he said.

In case of late delivery, customers will receive a Tiki coin worth VND30,000 (US$1.3) for use next time while shopping.

The speedier delivery does cost more, the company said.

Express delivery costs two or three times higher than standard delivery.

For instance, while standard delivery costs only around VND15,000 for a package weighing less than three kilogrammes, express delivery costs VND30,000.

However, 50-75% of this is covered by the online shopping companies.

Dardy said Ahamove gets VND30,000 for express delivery, with Lazada covering VND20,000 of it and only passing on VND10,000 to the customer.

But despite this, companies have no hesitation in offering express delivery, realising this will encourage customers to return in future.