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Jun, 2020     

Tiki Sendo Merger – Implications for VN eCommerce

Tiki has a high share of captive logistics concentrated in HCM and Hanoi while Sendo fulfils supply though 3PL and has a wider geographic reach – Integrating these logistics capabilities to cross leverage efficiencies could prove challenging.


1. Tiki & Sendo merger looks compelling considering the complimentary nature of their offerings

Vietnam’s two local eCommerce horizontals, Tiki and Sendo have agreed for a merger as per reports on 22nd May, 2020. Further details around the merger are still awaited.

Interestingly, the two companies have very different business models and focus areas, bringing in scope for significant synergies in the short and medium term.

Key Takeaways

  • Wide target segment reach – merged entity will have a wider target group ranging from low to medium income people with preference ranging from low value accessories to high value electronics.
  • Profitability + GMV focus – merged entity would represent a complimentary mix of the two business models where focus on profitability and scale could go hand in hand.
  • Wider geographic presence – merged entity will have a wider reach across the country.
  • Balanced category mix – merged entity will have a diversified portfolio of offerings across categories.

2. However efficient integration of operations and aligning strategic goals would be key to achieve synergies

However, as is the case with any merger, integration of operations, roles and responsibilities, policies and strategic inclination could prove to be time taking, and challenging in parts.

In this backdrop, it will be key to understand more details around the nature of the merger to take a view on extent of realization of synergies and any challenges associated with it.


3. In the long term, we expect the merger to help drive better operational efficiency, enabling players to focus on serving customers better, and scaling faster

The merger however, augurs well for sector growth and profitability in the long term.

Profitability which has taken a slight hit in wake of COVID, will not see a marked recovery in a 12 month Horizon owing to the high one time integration costs. However post that, we see a marked recovery with all 3 firms being able to drive in significant operational efficiencies along with reduction in discounting in more mature markets.