E-commerce platform Tiki’s losses have wiped out a total of VND506 billion ($22 million) gaming firm VNG had invested in it. As of June 2019, VNG had suffered a cumulative loss of $22 million of its 24.6 percent shareholding in Tiki, according to the gaming firm’s recently released audited semi-annual financial statement.
In accordance with current accounting practices, the value of VNG’s investment in Tiki is now effectively zero.
Tiki JSC started off as an online bookstore in 2010 before venturing into e-commerce. Just six years later, the firm was valued at $45 million, following domestic tech firm VNG injecting some $17 million in a 38 percent stake acquisition deal, which was then the largest shareholding in Tiki.
However, by June 30 this year, VNG’s stake in Tiki had fallen to 24.4 percent after JD.com, China’s second-biggest e-commerce firm behind Alibaba, made a series of investments for undisclosed sums to raise its ownership to 25.65 percent.
Tiki, like other e-commerce giants in the Vietnamese market, has been struggling to make profit for years due to high operational costs in a competitive market.
Tiki has reported losses totaling VND380 billion ($16.4 million) in 2016 and 2017. Tiki made a record loss of VND757 billion ($32.75 million) last year, of which VND254 billion ($11 million) was attributed to VNG.
Founded in 2004, VNG provides online games, music streaming and messaging applications.