Recess Company Limited (Vietnam)

Recess Company Limited focuses on managing and operating an e-commerce platform, namely LAZADA. Besides, it also trades kinds of products on this platform. In April 2016, Alibaba Group announced that it had reached an agreement to acquire the control of Lazada e-commerce platform in Southeast Asia. At that time, Lazada e-commerce site operated in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Vietnam's e-commerce market has grown tremendously and recorded impressive numbers in 2021. In which, consumers' new shopping habits have made an important contribution to promoting the growth of e-commerce, and are a premise to create a driving force for development in the coming years when online shopping is gradually becoming a part of Vietnamese people's lives. The trend of sellers converting business on e-commerce platforms is increasing, even stronger under the impact of Covid-19. In the Vietnamese market, Lazada is a pioneer in investing in building a methodical logistics infrastructure system, providing two modes of transport in parallel: delivery with an internal shipping unit or taking advantage of the service network of reputable delivery partners in the market. Lazada is among the top 5 largest e-commerce platforms in Vietnam along with Shopee, Tiktok Shop, Tiki, and Sendo. According to a report by Metric e-commerce data platform, in quarter 1 of 2023, the revenue of the 5 largest e-commerce platforms in Vietnam (Shopee, Lazada, TikTok Shop, Tiki, and Sendo) reached VND 39,000 billion, increased by 21.8% over the same period in 2022. In which, Shopee continued to be a leader when reached VND 24,700 billion, making up 63.1% of total revenue of the top 5 largest e-commerce platforms. Next was Lazada with VND 7,500 billion and Tiktok Shop with VND 6,000 billion, which surpassed the other 2 competitors (Tiki and Sendo) with a long distance. In the most recent update in the third quarter of 2023, Metric said sales revenue on TikTok Shop had reached VND 10,122 billion, 15.4% higher than Lazada. Meanwhile, YouNet ECI's statistics in November 2023 (the month of the November 11 sale) also show that the total transaction value on the 4 largest e-commerce platforms in Vietnam today including Shopee and Lazada, Tiki and TikTok Shop has reached VND 31,195 billion. In particular, Shopee continued to monopolize the top revenue market share with 72.7%, equivalent to VND 22,674 billion. Followed by TikTok Shop with a 17.2% market share and Lazada with a 9% market share, equivalent to the transaction value of VND 5,375 billion and VND 2,802 billion respectively.With fierce competition in the industry, the above competitors recorded heavy losses. As for Lazada, the accumulated loss as of March 31, 2023, was VND 8.75 trillion. Even PwC, the subject's audit unit, still doubted the company's ability to continue operating. However, PwC also added that as the ultimate owner of Recess, Alibaba Group has committed to providing financial support to the company to pay off obligations and continue business operations.Recently, according to a source, Lazada, a prominent e-commerce platform in Singapore, is reportedly undergoing significant layoffs, impacting top executives and employees across various regions. The e-commerce firm has reportedly terminated all its chief marketing officers in different countries and laid off a significant portion of its staff in Malaysia, including the CEO and chief logistics officer. Tech In Asia reports that Lazada plans to cut about 30 percent of its workforce region-wide. This comes after a period of expansion where the company employed up to 10,000 staff across six countries. Additionally, Lazada has closed LazMall in Vietnam, a platform for international brands launched in 2018. Via interview, the subject refused to comment on this matter.