On Group, a social commerce business has acquired the shipping platform TopShip

DNHN - The merger and acquisition transform the ON ecosystem into a single social commerce platform for online retailers, with three pillars: sourcing, shipping, and finance.

TopShip, the ultimate end-to-end shipping distribution platform for Vietnam's top online seller, was successfully acquired by On Group Co., Ltd. The deal's value has not yet been announced.

Following the merger, TopShip will be renamed OnShip and will become part of the product ecosystem on the ON app. ON's sales partners may now use a single shipping gateway - OnShip - to compare rates and lead times of Vietnam's biggest shipping units. This can save shipping expenses by up to 50%.

TopShip is regarded as the greatest piece of equipment in Vietnam, with a network of roughly 15 of the country's most prominent delivery partners, offering delivery solutions for more than 50,000 online vendors nationally and fulfilling more than 25,000 orders daily. The ideal mix to round out the transportation segment, servicing business partners in the ON ecosystem across all three pillars of Sourcing, Shipping, and Finance.

Mr Giang Nguyen, Co-Founder and CEO of On Group, commented on the transaction, saying, "Before the M&A agreement, On Group, was a customer of Topship for a long time." As a result, we are familiar with TopShip's goods and business approach. With TopShip's product advantages and partner system, combined with ON's operational expertise and growth promotion, I believe that OnShip, in particular, and the On Group in general, will reach outstanding milestones in the future years."

According to On Group CEO, shipping is always a significant challenge in the e-commerce business in the Vietnam market. In truth, an order is worth 150,000 VND, but the shipping price might range between 30,000 and 40,000 VND, accounting for more than a quarter of the order value. As a result, cutting shipping costs, lowering wait times, and streamlining operations for sellers is always critical aspect in promoting the expansion of the e-commerce business in the next years.

"When compared to self-investing and building the internal team, the acquisition of TopShip saves On Group a significant amount of time and resources." The merging of two premier technological platforms in the domains of social commerce and shipping benefits sales partners on the ON platform the most, reducing time, optimizing costs, and improving revenues," Mr Giang stated.

Experts believe this M&A transaction to be one of the important milestones in On Group's development after successfully obtaining $1.1 million from Touchstone Partners venture fund and ThinkZone Ventures.

This assists the firm in increasing its value, increasing the number of users, dominating the social commerce segment, and perfecting the product ecosystem to maximize the advantages of customers and business partners on the platform. foundation.

"While TopShip provides services that are essential to the e-commerce sector, ON is the top social commerce platform that holistically links suppliers, individuals, and enterprises." The integration of TopShip into the ON application is a 1+1=10 resonance narrative, resulting in a broader ecosystem that is more valuable to the whole market," stated Mr Hoang Giang, Founder of TopShip.

This transaction occurs at a time when startup venture capital is returning to the Vietnamese market and the trend of technology M&A is stronger than ever. Furthermore, the Vietnamese startup ecosystem has seen a new generation of firms emerge in Vietnam's social commerce industry. In the first half of 2022, several of these firms raised approximately $14 million.

With 165 agreements in 2021, Vietnamese startups garnered more than $1.4 billion in financing. According to the Vietnam Innovation and Technology Investment Report, overall investment capital and the number of completed agreements increased by 57% and 219%, respectively, compared to 2020. E-commerce (E-Commerce) and Financial Technology (FinTech) remain the two most attractive businesses for capital flows. Investment capital in Vietnamese companies is expected to exceed USD 2 billion by 2022.

According to a recent Bain & Co analysis, social commerce in Vietnam accounted for 65% of the country's $22 billion online retail market last year, the biggest share in Southeast Asia. The social commerce business in Vietnam has grown rapidly in the last four quarters, owing to substantial development in e-commerce.

According to the Group CEO, social commerce will become the primary purchasing trend among Vietnamese customers during the next five years. According to a recent analysis by Facebook and Bain & Company, Vietnam will have the fastest expanding e-commerce market in Southeast Asia by 2026, with a total anticipated value of 56 items. billion USD, an increase of 11.8 billion USD over 2020.

ON soon drew a huge number of users, generating exceptional growth, with a development plan targeting small cities, urban centres of class 2, class 3, and rural areas. Currently, ON has a network of over 1.4 million interested consumers, over 52,000 sales partners, and a supply of over 20,000 real items. Each sales partner may make an extra 7 million VND per month on average by using the ON application.

On Group will continue to mobilize investment money in the next years to build technical capabilities, improve user experience, and expand the market to provinces in Vietnam, while also using its ecosystem to provide financial support services and solutions.

Tu Minh