ChoDienTu Vietnam beats Lazada in funding race

Vietnam’s first eCommerce marketplace, ChoDienTu.vn, ranked second in sales revenue last year to Lazada in the local market – yet its total funding is 50 times smaller.

“ChoDienTu.vn has chosen an in-depth strategy of silently investing into infrastructure services to create long-term values and improve service quality to buyers and sellers,” says chairman Nguyen Hoa Binh of the PeaceSoft-group, which owns ChoDienTu. Its second-place ranking was announced in the latest eCommerce report of the Vietnam eCommerce and Information Technology Agency (Vecita).

“In the face of eCommerce fever in the past few years, many deep-pocketed players have been giving big discounts and promotions to buy growth, then shutting down after losing millions of dollars because of an inefficient burn rate,” says Binh.

Over the past six years, PeaceSoft-group has grown into a multi-services ecosystem encompassing NganLuong.vn online payment platform, eBay.vn cross-border buying platform and ShipChung.vn shipping and cash-on-delivery platform. It has also formed a strategic partnership with the country’s first warehousing and fulfilment platform BoxMe.vn.

Addressing the potential threat posed by Alibaba’s acquisition of Lazada in Southeast Asia, Binh’s reaction was: “With our so-called ‘people’s fight’ strategy, if Alibaba is the crocodile in the Yangtze River, then we will be a school of piranhas to fairly compete as they come to Vietnam.”

PeaceTech, a subsidiary of PeaceSoft-group, is a joint venture with eBay with majority control in the hands of veteran Vietnamese technopreneurs.

“Over the past 11 years, total funding into ChoDienTu has been estimated as much as 50 times less than that spent by our number-one competitor, Lazada.vn, over a far shorter period,” says Binh.

“This means eCommerce does not necessarily need as much money as people may think, but the most critical thing is to have a team of people with a really in-depth local understanding.”