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Vietnam: The delivery market recovered after the pandemic and is ready to escalate

According to the ranking of the Integrated Index of World Postal Development in 2021 (2IDP), Vietnam has increased 2 ranks compared to 2020 (ranked 47/168) and became one of the four ASEAN countries in the top 50. According to a report released by Allied Market Research in 2021, the Vietnamese express delivery service market has revenue of 632.6 million USD in 2019 and is estimated to reach 2.19 billion USD in 2027, at a CAGR of 22.4% in the period 2020 - 2027.

The Covid-19 epidemic in 2021 and the period of social distancing are both detrimental and supportive for express delivery businesses. The fact that consumers have to quarantine at home made the demand for online shopping and delivery increase sharply. However, express delivery businesses do not have enough human resources to meet the demand for delivery because the number of F0 and F1 employees who need to be quarantined had also increased; operation costs also increase due to frequent disinfection and Covid-19 testing of employees.

Thanks to the explosive development of the digital platform and the outstanding development of the e-commerce market, it has created a driving force to promote the express delivery market. The E-Conomy SEA 2021 report of Google, Temasek and Bain & Company assesses that Vietnam's Internet economy in 2021 will grow by 31% compared to 2020 and reach a scale of 21 billion USD, of which the online retail sector will grow up to 53% and reach a scale of 13 billion USD. Although e-commerce transactions are online, express delivery service is one of the indispensable links to complete orders. In terms of using purpose, the e-commerce segment accounted for the largest market share in 2019, contributing over 4/5 of Vietnam's delivery service market revenue and was forecasted to maintain its lead. (Vietnam E-commerce Association)

Some e-commerce businesses such as Shopee, Lazada, and Tiki have developed their delivery systems but still have to depend on delivery businesses to complete the delivery of goods to consumers.

It is estimated that in the next 5 years, the size of the e-commerce market will continue to grow at a CAGR of 20% to reach 30 billion USD in 2025. All the players in this market and supporting industries such as express delivery and payment will have the same rapid growth, leading to the birth of a smart order processing center system specializing in e-commerce.

Although the production and business activities of enterprises in the year 2021 were stagnant and suffered losses due to social distancing, the retail and express delivery industries still maintained their operations and growth. In general, express delivery businesses have increased revenue, and some businesses have skyrocketed in revenue (such as Swift 247, Shopee Express, J&T, and Ninja Van, ... )

Only a few express delivery businesses have made a profit in 2021, mainly large enterprises such as VNpost, Viettel Post, and Giao hang tiet kiem. Giao hang nhanh made a profit for the first time after many years of losses. Notably, Swift 247, although just established in 2019, has had revenue of over 1,000 billion dong by 2021, which many other businesses had not been able to do. In addition, foreign-invested companies such as J&T, Shopee Express, and Ninja Van continue to report strong losses in 2021.

The increasing demand for delivery services along with competition in the industry required businesses to develop their quality, and update, innovate technology to improve their position. Businesses in Vietnam have continuously improved and developed in 2021 despite facing many difficulties due to the Covid-19 epidemic. Vietdata will introduce you to some companies in the express delivery industry and their business results.

Vietnam Post

As Vietnam Post Corporation, under the management of the Ministry of Information and Communications. VNpost had the most stable position in Vietnam's delivery system. VNpost owns over 14,000 service points nationwide, the average service radius is 2.67km/point; 5 international post offices handle postage and international receipt, and 7 distribution centers divided into 3 regions of the North, Central, and South.

In 2019, VNpost launched, an e-commerce platform, to support the consumption of local specialties of regions and provinces in Vietnam, especially agricultural products. In 2021, Postmart has brought the products of over 2.5 million agricultural production households across the country to the digital environment, promoting the consumption of over 20,000 tons of agricultural products. VNpost post offices in all 63 provinces and cities were responsible for preserving and distributing to consumers locally and through e-commerce platforms. VNpost also supports the export of agricultural products to the world. Vietnam Post cooperated with ERG Group and Sun Hee DC Group, taking advantage of their ecosystem to support and promote the export of Vietnamese agricultural products to potential markets, like the United States.

VNpost also sets an orientation in the period of 2021-2030 to develop products and services into a business combining digital and physical, applying data and digital technology to serve the operating and decision-making processes. Become a leading enterprise in technology, research and development in the postal sector. Accompany and support Vietnamese businesses to bring products and services to the world and join the global supply chain. Operating a digital service ecosystem, contributing to and participating in the construction of a digital government, digital economy, and digital society. Development of a system of postal address codes.

VNpost's revenue in 2021 did not change too much compared to 2020, remaining at about 24 trillion VND, although the revenue of other businesses in the industry was heavily affected. Even VNpost's profit after tax has increased compared to 2020, from about 378 billion VND to over 513 billion VND. In 2021, VNpost sold over 18 million PTI shares and earned over 1,400 billion VND.

Viettel Post

Viettel Post is a member of Viettel Military Industry and Telecommunication Group, specializing in domestic and international express delivery services; logistics; Fulfillment services; Commercial services. After over 24 years of construction and development, Viettel Post's position is increasingly affirmed in the market with many prestigious titles and awards and the highest growth rate in the delivery industry. Viettel Post had the vision to become a high-tech Logistics Company, among the top 5 enterprises in Vietnam by 2025. Viettel Post is the enterprise with the highest growth rate in the postal industry, always a pioneer in using advanced and modern technology in the digital era 4.0.

On January 24, 2021, Viettel Post officially put into operation the Southern Logistic Center in Ho Chi Minh City. The Southern Logistics Center is applied many modern technologies in operation and monitoring with two main centers: the sorting center and the fulfillment center (Order fulfillment center).

At the sorting center, the automatic sorting conveyor system has a capacity of 42,000 parcels/hour. This is the only system in Vietnam that integrates and automatically divides goods weighing up to 50kg and small goods on the same split scenario, which is owned by Viettel Post with the initiative and technology. Goods after being divided and selected through this logistics center will be connected to customers completely automatically. Viettel Post's Southern logistics center helps to reduce the time of connecting parcels to 6 hours, the error rate in sorting is almost zero, while helping to save 91% of human resources and provide a complete solution. Complete orders automatically for customers.

In addition, the Voso e-commerce platform (Viettel Post) also tried to operate the logistics system to be able to bring Bac Giang lychee products to the final consumer between 6 and 48 hours after harvest through the network. Express delivery covers 63 provinces. The launch of the multimodal transport platform MyGo and the e-commerce platform Voso helps this business realize its goal of transforming from a postal and delivery company into a technology-based logistics company. Among the postal industry, Viettel Post has perfected a diverse ecosystem by itself, e-commerce, delivery and online car-hailing.

2021 is a quite successful business year for Viettel Post with the revenue increased by 24.5%, from 17 trillion VND to 21.5 trillion VND. However, because the investment in product and service development has not yet made a profit, Viettel Post decreased by 23.8%, from 383.3 billion VND to only 295.9 billion VND.

Giao hang tiet kiem

The system of Giao hang tiet kiem (GHTK) has now covered 63 provinces, 11,000 districts and communes across the country. With over 1,500 warehouses with a total area of over 600,000m 2 , over 2,500 trucks, connected with over 30,000 delivery personnel, this unit has built a nationwide delivery system. Ensure optimal delivery time: 6 hours in the province and up to 48 hours for inter-provincial orders nationwide.

Besides developing businesses towards digitization, GHTK also has the orientation to become a sustainable development enterprise with many environmental protection and volunteer activities to support the community. These activities show GHTK's responsibility for the environment and to society, helping to build a brand image in the eyes of customers.

In 2021, GHTK experienced a decline in both revenue and profit after tax, GHTK's revenue decreased slightly from 7.2 trillion VND to 7.15 trillion VND. GHTK's profit after tax dropped sharply by 42.2%, equivalent to 220 billion VND, to just over 300 billion VND.


J&T Express is a delivery brand established in Indonesia and have officially operated in Vietnam since 2018. Although it has only entered the market for 4 years, with a fast growth rate each year, J&T has marked its mark on the delivery market with many achievements, and reached a revenue of over 5,000 billion VND by 2021. In 2022, J&T planed to launch the 37th transit center, which is considered the most modern transit center in Vietnam. With an area of about 60,000m 2, it would increase the cargo handling efficiency to 3.6 million parcels/day. Along with expanding the network of transit centers, J&T Express launches J&T International - an international shipping route to over 200 countries and territories.

One of the strengths that J&T had was the update and application of information technology and modern equipment in the transportation process and expanding its association with big brands and e-commerce sites. During the Covid-19 pandemic, J&T quickly transformed to fit the market with the disinfection of freight centers, post offices, and badges that said vaccinated for shippers. Especially, launching the new service, J&T Fresh specializing in the delivery of food and agricultural products to support farmers and meet the food needs of consumers during quarantine.

At the end of December 2021, J&T Express became the only candidate from ASEAN to be in the top 15 most valuable unicorns in the world, valued at 20 billion USD.

Although J&T's revenue in 2021 was affected by the epidemic, it grew significantly by 73.3%, from nearly 3.2 trillion VND to over 5.5 trillion VND. However, because of continuous investment in expansion, J&T's profit after tax in 2021 lost nearly 600 billion VND.

Shopee Express

Shopee Express is a shipping unit under Shopee, providing instant delivery within 24 hours and only accepting orders in Hanoi and Ho Chi Minh City. Despite established after other delivery services, Shopee Express had favorable conditions for development and even had revenue in 2021 that surpasses Express Delivery. Shopee Express only focuses on processing orders of the Shopee e-commerce platform, and the delivery system is only concentrated in major provinces, cities and densely populated districts. But the explosive number of orders due to the development of e-commerce and the large volume of goods in Hanoi and Ho Chi Minh City is a driving force for the development of the Shopee Express system.

Demand for orders and expedited delivery of customers in Ho Chi Minh City and Hanoi is the reason leading to the birth of Shopee Express. Until now, Shopee Express is the only unit operating instant delivery services on Shopee and contributed to the Shopee ecosystem. However, to compete with other postal delivery units such as VNpost, Viettel Post, GHTK; or instant delivery units such as Grab, Gojek, Ahamove, Lalamove, etc. Shopee Express needs to promote infrastructure development, personnel structure, and upgrade digital services.

After its establishment in April 2020, Shopee Express immediately grew strongly and reached a revenue of over 3.5 trillion VND in 2021, becoming the 4th highest revenue enterprise in the market. However, because it is a newly established business, Shopee Express has to invest and expand a lot to gain market share, Shopee Express reported a loss of nearly 570 billion VND, the highest loss in the market in 2021.

Giao hang nhanh

Giao hang nhanh (GHN) is the first private delivery company in Vietnam established in 2012. GHN has 10 manual sorting Warehouses, and 2 auto sorting warehouses with the highest maximum capacity in Vietnam. Owning the first 100% automatic sorting conveyor system in Vietnam with a capacity of 30,000 orders/hour, with a smart online application system, easy and fast operation.

GHN is a pioneer in applying technology to operations and management to make delivery more efficient and faster, creating a close bond between sender and receiver.

In 2015, Giao hang nhanh established another subsidiary company in charge of instant delivery named Ahamove in Ho Chi Minh City and Hanoi, combining delivery, moving houses and goods by car, three-wheeler, and trucks.

GHN achieved a lot of success in 2021 with a 26% increase in revenue and an increase of 86.4% in profit. GHN's revenue increased from over 1.9 trillion VND to nearly 2.5 trillion VND and made a profit after nearly 9 years of operation with a profit of over 12 billion VND, although not much, but compared to the loss of -92.7 billion VND in 2020, the company had a successful start in business results.

The delivery market in 2021 also had many other new names with a low market share but has good development potential and reached a revenue of over 1,000 billion in 2021.

Swift 247 Co., Ltd. established in early 2019, is an enterprise providing goods delivery services on the technology platform, connecting multimodal transport modes and licensed to do business in freight transport by air, with strategic partners such as Vietjet, Vietjet Cargo. Swift 247 with the support from Vietjet Air has quickly grown and become profitable. Swift 247's revenue grows by 8113.7% in 2021 and reached a profit after tax of VND 6 billion from a loss of VND 7 billion in 2020

Ninja Van entered the market in 2018, from a big delivery brand in Singapore. Ninja Van is highly appreciated in Singapore and Southeast Asia, the company is present in 6 countries: Singapore, Malaysia, Indonesia, Philippines, Thailand and Vietnam. Ninja Van is still in the investment stage to expand the network, so it did not achieved positive business results, with a revenue of about 1.1 trillion VND in 2021 but negative profit after tax of 410.6 billion VND (compared to revenue and profit after tax in 2020 of 670 billion VND and -270.2 billion VND).

Despite facing many difficulties due to social distancing in 2021, thanks to the demand for shopping through online channels and the support of the Government, the delivery market still developes well and has strong growth potential. Only in the first 6 months of 2022, the total volume of goods transported domestically was estimated at 951.2 million tons, raised 8.6% over the same period in 2020.

Vietdata forecast that the fastest growing industry will be short-distance delivery, inner-city deliveries, especially for the e-commerce delivery segment because this industry is expected to grow strongly in Vietnam in the near future.

Besides logistics centers with large scale, integrating many functions; many micro-depots, following the postal franchise model specializing in e-commerce, will likely be the trend in 2022. Forming many points in the logistics network, bringing goods closer to customers, shortening the delivery time, facilitating the last-mile delivery process.

Source Vietdata financial flatform


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