Business

Amazon, Alibaba want a piece of Vietnam’s booming online economy

E-commerce giants like Amazon and Alibaba want a piece of Vietnam’s booming online market. Vietnam’s digital economy is forecast to grow to $52 billion by 2025, an annual 29% increase from 2020, according to a study by Alphabet Inc.’s Google, Temasek Holdings Pte and Bain & Co.

Startups backed by Warburg Pincus LLC, Goldman Sachs Group Inc. and JD.com Inc., regional players including Singapore’s Sea Ltd.’s Shopee and even Amazon.com Inc. are also targeting the country’s growing middle class.

Between 2016 and the first half of 2020, investors funneled $1.9 billion into Vietnam’s online sector, the study by Google, Temasek and Bain showed.

A consortium led by Alibaba Group Holding Ltd. and Baring Private Equity Asia is investing $400 million for a 5.5% stake in Vietnamese conglomerate Masan Group Corp.’s retail arm. As part of the deal announced May 18, Masan will team up with Lazada, Alibaba’s Southeast Asia e-commerce unit.

“The combination of Alibaba’s online retail expertise, Lazada’s e-commerce platform in Vietnam, and Masan’s leading offline network will be a strong catalyst to modernize Vietnam’s retail landscape,” Kenny Ho, Alibaba’s head of investment for Southeast Asia, said in a statement.

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