Masan Group announced its intention to ramp up technology acquisitions and partnerships in an effort to meet Vietnam’s evolving e-commerce demands.
CEO Danny Le told Bloomberg Television’s “Asean Ahead” segment that the company aims to serve 50 million customers in the next three to five years. Masan Group Corporation is one of the top three largest private sector companies in Vietnam, with services ranging from a retail network of supermarkets and mini-marts to food production and financial services.
Masan aspires to be the go-to company for 80% of consumers’ daily needs, which requires them to leverage their physical and online networks, according to Le. In September, a Masan unit acquired a majority stake of 70% in Reddi, a start-up operator of mobile virtual networks. The company is following a business model similar to that of the Jio unit of India’s Reliance Industries, which provides wireless telecommunication services.
E-commerce represents about 2% of Vietnam’s retail market, Le said. To drive Masan’s e-commerce growth, the company is looking at areas such as logistics, supply chains and fintech, he further added.
“I do expect that to double, potentially triple over the next couple of years,” Le 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.”
By 2025, the Vietnamese government hopes that online sales will account for 10% of Vietnam’s retail sales and as much as 50% in Hanoi and Ho Chi Minh City.
Vietnam is projected to be the fastest-growing internet economy in Southeast Asia in the next ten years, according to an analysis by Google, Temasek Holdings and Bain & Co. In fact, the country is expected to become a $52 billion digital economy by 2025.
The report also showed that Vietnam is the third-largest e-commerce market in Southeast Asia, just after Indonesia and Thailand. Its customer demand for online purchases has increased dramatically. Over 70% of Vietnamese have access to the internet, 50% use online shopping, and 53% use e-wallets or online payments.
Earlier this month, Masan Group Corporation announced the signing of a $30 million primary investment in The CrownX Corporation by a consortium of investors like Baring Private Equity Asia, TPG, Platinum Orchid and Sea Town Master Fund, a wholly-owned indirect subsidiary of Temasek.
The CrownX holds Masan’s interests in Masan Consumer Holdings and VinCommerce, which has attracted over $1.5 billion in investments from global investors including Alibaba Group, which looks to expand its Southeast Asian e-commerce unit Lazada in the country. On Monday, Masan stock reached a record high of 3.4%. The company’s stock has soared 83% so far this year, beating the benchmark VN Index by 34%.
The Masan Group Corporation was one of the first Vietnamese corporations to adopt a growth strategy that tapped foreign capital to expand based on acquisitions. In April 2011, Masan Consumer received the largest private equity investment in Vietnam when KKR, an American global investment company, paid $159 million for a 10% stake.