Vingroup JSC, Vietnam’s largest property developer and mall operator, will set up an e-commerce website offering a range of products as it looks to win online customers.
Vingroup Vice Chairwoman Le Thi Thu Thuy left her position as chief executive officer to lead the new subsidiary, VinE-com, the Hanoi-based company said yesterday. The website will sell products ranging from food to furniture, Thuy said.
“After five years, we hope to be the biggest e-commerce player here,” Thuy, 39, said in a phone interview. Annual e-commerce transactions in Vietnam may increase to as much as $15 billion in six year from about $700 million now, she said.
Vingroup’s unit will compete with local ventures including those that are backed by EBay Inc. and China’s largest e-commerce company Alibaba Group Holding Ltd. The company will have to overcome the low adoption of payment systems needed for e-commerce and a virtually non-existent logistics network for product deliveries, said Lam Nguyen, a Ho Chi Minh City-based analyst at International Data Corp.
“Vietnam has a tech-savvy population, but it’s pretty much about communications and social activities,” said Nguyen. “Vingroup has sufficient financial backing, good resources. The challenge will be finding good management.”
Shares of Vingroup fell 0.7 percent as of 10 a.m. local time in Ho Chi Minh City today. Vingroup promoted Duong Thi Mai Hoa as the CEO, succeeding Thuy.
Vietnam’s young population is eager to embrace technology, Nguyen said. About half of its 90 million citizens are younger than 30, according to government data.
Vietnam has about 98 million mobile phone subscribers and more than 31 million Internet users as of December, according to the Ministry of Information and Communication.
Vingroup is looking to acquire local e-commerce companies, Thuy said, without giving details.