VinShop is expected to soon become a successful store connection platform in Vietnam, with a business strategy similar to Tokopedia in Indonesia.
Tokopedia’s success lesson
Founded in 2009, Tokopedia is one of Indonesia’s tech unicorns. According to CB Insights (U.S.), Tokopedia’s value reached $7 billion as of June 2020, becoming the third largest unicorn in Southeast Asia, behind Grab (Singapore) and Gojek (Indonesia).
Tokopedia was developed as a shopping platform where any business could easily arrange and sell its products.
William Tanuwijaya, co-founder of Tokopedia, said that the company’s business model is similar to Alibaba’s as it combines Toko (shop) and encyclopedia.
In 2018, Tokopedia launched the Mitra Tokopedia app for warungs – small family-owned businesses that usually cater to a neighborhood.
Mitra Tokopedia has recorded one million downloads in the island nation that has two million warungs.
Mitra Tokopedia has gained popularity and is now present in more than 20 major cities, including Bandung, Yogyakarta, Banda Aceh, Medan, Palembang, and Pekanbaru. This is due to its capacity to connect grocery store owners directly with suppliers and ease retail operations.
Research from PT Visa Worldwide shows that more than 90 percent of Indonesia’s transactions are conducted in cash. Therefore, tech unicorns like Tokopedia are pioneers in promoting online shopping.
According to experts, grocery stores still have several advantages over supermarket systems and e-commerce, particularly in Asia. They are friendly, close to homes and convenient.
Tokopedia, Warung Pintar in Indonesia, StoreKing in India, and Alibaba with LST have all shaken hands with traditional retailers.
VinShop’s potential
Tokopedia’s success in Indonesia inspired One Mount Group to develop its VinShop platform.
One year after its launch, VinShop has connected more than 100,000 traditional grocery stores. However, this figure is still modest compared to the market potential.
According to Nielsen, Vietnam has 1.4 million grocery stores in operation. Kantar Worldpanel, the world’s leading consulting and market research company, said that traditional retail channels, including markets and grocery stores, still meet 85 percent of consumer demand. The advantage of the grocery store business model is convenience, right in the small alley, good service, easy to travel, and low cost.
VinShop has helped 10,000 Vietnamese grocers become real business people by using technology and financial solutions from this digital platform. Data from VinShop shows that the platform has covered up to 80 percent of the core market in Hanoi and Ho Chi Minh City.
Several small businesses said that they can earn a lot thanks to VinShop’s benefits, such as the abundance of products from suppliers themselves, transparent pricing, more than 100 promotions each month, and VinShop’s loyalty programs.