Chinese discount retailer Vip.com sets up shop in Southeast Asia with Singapore website, regional app
- NYSE-listed company has launched a website in Singapore and released its app in countries including Singapore, Indonesia and Malaysia
- Southeast Asia could be a ‘pivotal point’ for the company, analyst says
The New York Stock Exchange-listed company, which sells mid to high-end fashion items at deep discounts, has launched a website in Singapore, VIPShop.sg, and released its app in countries including Singapore, Indonesia and Malaysia.
The discount retailer’s Singapore entity, VIPShop Singapore Pet currently has 49 employees, with Bernard Tay – an Amazon.com veteran in Singapore – as regional head of its Southeast Asia operations, according to LinkedIn. Neither the company nor Tay responded immediately to requests for comment.
Southeast Asia is a hot market for cross-border e-commerce services and is among the top destinations for Chinese companies looking for overseas expansion, thanks to the region's huge population and growth in online retail adoption, said Zhang Zhouping, director of cross-border e-commerce research at Hangzhou-based consultancy 100ec.cn.
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The competition between Alibaba Group Holding-backed Lazada and Tencent Holdings-backed Shopee has, however, turned the market into a hard nut to crack for any new entrants, and logistics remains a challenge for all e-commerce players in the region, according to Zhang.
“The logistics infrastructure varies across Southeast Asian countries,” he said, “Companies will have to have bespoke solutions in different countries.
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Vip.com’s drive into markets abroad comes amid a slide in revenue on home turf, as the Chinese e-commerce market starts to cool off. The company recorded revenue of 21.6 billion yuan (US$3 billion) in the third quarter last year, a more than 13 per cent drop from the 24.9 billion yuan it posted in the same period in 2021.
The company ascribed this slump to “soft consumer needs for discretionary categories”, resulting from a challenging macroeconomic environment in China after a year of Covid-19 outbreaks.
As Vip.com’s flash-sales model loses its edge in its home market, expansion in Southeast Asia or other markets could give it a boost, said Zhang Yi, founder and chief analyst at market research firm iiMedia. “The Southeast Asia market could be a pivotal point for the company.”
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E-commerce is expected to drive the growth of Southeast Asia’s digital economy, according to a joint report released by Google, Singaporean sovereign fund Temasek and management consultancy Bain & Company in October last year. The report estimates that the region’s e-commerce market will grow at a compound annual growth rate of 17 per cent to reach US$211 billion by 2025, a more than 60 per cent jump over last year’s US$131 billion.
Vip.com, headquartered in China’s southern Guangdong province, was launched in 2008 by serial entrepreneur Shen Ya, its co-founder and CEO. It started off as a copycat of Vente-Privee, a French online retailer that sells fashion items and designer brands at deep discounts through the flash-sales model.
The platform has been able to grow in the world’s second-largest consumer market by tapping the rise of Chinese consumerism since the late 2000s, as local consumers with their growing wealth started to develop distinct spending tastes but still wanted to keep costs down.
