Vietnam's Masan to ramp up tech investments to expand e-commerce

Commuters in Ho Chi Minh City on Oct 1, 2021. Masan Group wants to be the go-to company for 80 per cent of a consumer's daily needs. PHOTO: AFP

HO CHI MINH CITY (BLOOMBERG) - Masan Group said it plans to ramp up technology acquisitions and partnerships as the conglomerate aligns operations to increasingly meet Vietnam's e-commerce demands.

The Ho Chi Minh City-based company - its services range from a retail network of supermarkets and mini marts, to food production and financial services - aims to serve as many as 50 million consumers over the next three to five years, chief executive Danny Le said on Bloomberg Television and in e-mail communications.

Masan wants to be the go-to company for 80 per cent of a consumer's daily needs, Mr Le said, an "end game" that requires it to gear up and leverage on its physical and online networks.

Masan is building a business model similar to that of India's Reliance Industries' Jio unit, which provides wireless telecommunication services, Mr Le said. A Masan unit in September acquired a 70 per cent stake in Mobicast JSC, known as Reddi, a start-up mobile virtual network operator.

"Our digital telecom platform will be the foundation of our loyalty ecosystem," Mr Le said in an e-mail.

Shares of Masan rose as much as 3.4 per cent to a record high on Monday (Dec 20). The stock has rallied 83 per cent so far this year, outpacing the benchmark VN Index's 34 per cent advance.

Vietnam's digital economy is forecast to grow to US$52 billion (S$71 billion) by 2025, an annual 29 per cent increase from 2020, according to a study by Alphabet's Google, Temasek and Bain & Co.

The government targets online shopping to account for 10 per cent of Vietnam's retail sales - and as much as 50 per cent in Hanoi and Ho Chi Minh City - by 2025.

The CrownX, which holds Masan's interests in Masan Consumer Holdings and VinCommerce, has garnered more than US$1.5 billion in investments from global investors since the first half of 2020, the company said.

Investors include Alibaba Group, which looks to expand its South-east Asian e-commerce unit Lazada in the country, Baring Private Equity Asia, TPG, Platinum Orchid and Sea Town Master Fund, a wholly-owned indirect subsidiary of Temasek.

E-commerce represents about 2 per cent of Vietnam's retail market, Mr Le said. To drive Masan's e-commerce growth, the company is looking at areas such as logistics, supply chains and fintech, he said.

"I do expect that to double, potentially triple over the next couple of years," Mr Le said in the TV interview. "Masan itself is trying to align its business to ensure that we can offer consumers both an off- and online experience and basically satisfy them in every channel."

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