Founder of Tiki Resigns Amidst Intense Competition and Declining Market Share

In a surprising turn of events, Tran Ngoc Thai Son, the founder and CEO of Tiki, one of Vietnam’s leading e-commerce platforms, has submitted his resignation to the company’s board of directors. This news comes at a critical time for Tiki as it faces intense competition from rivals such as Shopee and Lazada, while its own market share continues to decline. Tiki’s struggles have been further highlighted by the phenomenal success of TikTok Shop, which has rapidly gained popularity in the Vietnamese market.

Tiki, considered a potential unicorn in Vietnam’s tech industry, raised an impressive $258 million in a Series E funding round in 2021, valuing the company at nearly $1 billion. However, the subsequent decline in valuations across the tech sector, driven by rising global interest rates and inflation concerns, has impacted Tiki’s growth prospects.

Since its establishment in 2010, Tiki has secured a total of $470.5 million in funding from prominent domestic and international investors, including VNG, CyberAgent Capital, Sumitomo, JD.com, Northstar Group, and Shinhan Financial Group. Despite these investments, Tiki has struggled to maintain its competitive edge in the face of stiff competition.

According to e-commerce data platform Metric, Tiki’s performance in the first quarter of 2023 paled in comparison to its rivals. With revenue of less than 850 billion dong, Tiki lagged far behind TikTok Shop, Lazada, and Shopee, which recorded revenues of 6,000 billion dong, 7,500 billion dong, and 24,700 billion dong, respectively. Tiki’s market share by revenue stood at a mere 2.2%, highlighting the challenges the company faces in retaining its position in the market.

Moreover, Tiki’s financials paint a bleak picture for the company. In the fiscal year ending in March , Tiki reported a revenue of less than $200 million and a staggering loss of $93 million. These continuous losses, coupled with declining market share due to fierce competition from foreign players, have left Tiki in need of new capital sources to sustain its operations. One potential avenue for securing funds is an initial public offering (IPO) in a foreign market.

However, Tiki’s founders and early investors have already experienced significant dilution of their ownership stakes following multiple funding rounds. For instance, VNG, an early investor in Tiki, held a 38% stake in the company in 2016. By the end of the first quarter of 2023, VNG’s ownership in Tiki Global, the parent company of Tiki Vietnam, had dwindled to 14.61%.

Tran Ngoc Thai Son’s resignation as CEO adds another layer of uncertainty to Tiki’s future. As the company seeks to navigate the increasingly competitive e-commerce landscape in Vietnam, it will require strong leadership and innovative strategies to regain its footing. Tiki will need to reassess its business model, enhance its product offerings, and find ways to differentiate itself from rivals to regain lost market share.

The resignation of Tiki’s founder, coupled with its recent financial performance and market challenges, serves as a wake-up call for the company. Tiki must act swiftly and decisively to address these concerns and regain investor confidence. The e-commerce giant will need to capitalize on emerging trends and adapt to changing consumer preferences to secure its position in Vietnam’s fast-growing e-commerce industry.

Only time will tell whether Tiki can rebound from its current setbacks and regain its status as one of Vietnam’s tech success stories. The company’s ability to attract new sources of capital, reinvigorate its business strategy, and deliver innovative solutions will be crucial in determining its future trajectory.