The logo of Alibaba Group outside its headquarters in Zhangzhou, China.
An investor group of Chinese technology group Alibaba has just signed an investment of $400 million in the retail branch of Masan Group in Vietnam, which has a thriving consumer market despite the COVID-19 pandemic.
According to local media, Alibaba’s investor group, which also includes Baring Private Equity Asia, will own a 5.5% stake in The CrownX, Masan’s consolidated retail consumer platform. Industry and Trade newspaper reported that, through this transaction, Masan’s subsidiary is valued at $6.9 billion. Launched last year, The CrownX unites two industry leaders to establish a leading retail-consumer platform in Vietnam.
This is Alibaba’s first investment, which was founded by billionaire Jack Ma, in Vietnam in the context of technology corporations increasingly focusing on the fledgling online grocery retail market in Vietnam.
Masan, founded and chaired by billionaire Nguyen Dang Quang – who is valued by Forbes with a fortune of $1.4 billion – funded and chaired by the local media, said the company is in the process of negotiating new strategic investment deals with other investors worth $300-400 million in The CrownX. The transaction is expected to be completed by the end of this year.
Masan, which runs the VinMart retail chain, said it plans to work with Lazada, Alibaba’s Southeast Asian e-commerce platform, to accelerate digital transformation and accelerate integrated retail market development in Vietnam in the near future, according to Tuoi Tre.
The deal will give Alibaba and Lazada access to Masan’s network of more than 2,000 stores, meaning they don’t have to make significant investments to set up a distribution network in Vietnam, according to the Financial Times about the brand service.
Masan and Vingroup, Vietnam’s largest conglomerate, consolidated their retail subsidiaries in 2019.
Vietnam’s economy, along with China, was one of the few in Asia that posted positive growth last year thanks to the government’s decisions to contain the pandemic while the rest of the world fell into crisis. Vietnam’s recently signed trans-Pacific and European Union free trade agreements, as well as its proximity to China, have made the Southeast Asian country a magnet for foreign investment at a tense time of the US-China trade war.
“This strategic partnership will help us accelerate The CrownX’s transformation into an ‘all-in-one’ platform that serves the everyday needs of consumers across offline and online shopping channels. online,” CEO of Masan Group, Danny Le, was quoted as saying by Saigon Economics Online.
Masan’s statistics, quoted by domestic media, said that necessities currently account for 50% of Vietnam’s retail market and 25% of Vietnamese consumer spending. Masan aims to increase the total value of goods from The CrownX’s online sales channel, accounting for at least 5% of the company’s total sales in the near future.
The deal marks one of Alibaba’s largest investments in Southeast Asia since it acquired full control of Lazada in 2018 for a total of $4 billion after multiple rounds of investment, according to the Financial Times. Credit Suisse (Singapore) Limited and Deutsche Bank are advisors in Alibaba’s investment in Vietnam.