Taiwan’s second largest telecom operator Taiwan Mobile has made its first foray into Vietnam by investing US$20 million into the country’s largest homegrown e-commerce site Tiki, paving the way for its expansion into Southeast Asia.

In an announcement on Tuesday (August 10), Taiwan Mobile president Jamie Lin said: “The strategic cooperation with Tiki is the company’s first investment in Vietnam. It also marks the company’s first strategic and meaningful step to make inroads into the country and greater Southeast Asian markets.”

Taiwan Mobile said the cooperation would also help its e-commerce subsidiary, Momo.com, to explore potential partners and new growth opportunities beyond Taiwan.

The company considers Southeast Asia as one of its 5G development targets and would continue to seek strategic partnerships in the region, including e-commerce, logistics, broadband and 5G-related applications.

As for its online retail firm, Taiwan Mobile expects Momo.com to tap into the rapidly growing e-commerce market in Vietnam and allow it to leverage Tiki’s local strength in terms of market position, warehouses, and logistics systems.

Between 2020 and 2025, the Vietnamese e-commerce market is forecast to expand up to 34% annually to reach US$29 billion, Taiwan Mobile said, citing a joint report by Google, Temasek Holdings and Bain & Co.

Tiki has so far raised a total US$300 million in funding since its 2010 establishment by Vietnamese software engineer Tran Ngoc Thai Son. Its foreign investors include Chinese online retailer JD.com and Singapore’s Ubiquitous Traders. Though Tiki is Vietnam’s largest homegrown e-commerce site, it is only the second most popular in terms of hits – behind rival Shopee, owned by Singapore’s Sea.

Tiki is in the process of transferring a 90.5% stake to Singapore-based company Tiki Global Pte Ltd in a move expected to call for more offshore capital via special purpose acquisition companies (SPACs), which are targeting Southeast Asia. In Vietnam, Tiki competes with Alibaba-backed Lazada and Sea’s Shopee.

The largest economies in the region, home to about 400 million internet users, are Singapore, Indonesia, Malaysia, Thailand, Vietnam, and the Philippines. According to the E-commerce White Book 2021, released by the Vietnam E-Commerce and Digital Economy Agency this July, Vietnam has the highest number of people shopping on e-commerce platforms in the region, with some 49.3 million people.

In 2020 Vietnam’s e-commerce market was estimated at US$11.8 billion, up 18% from the previous year.  This growth was lower than the average 20% annual increase between 2015 and 2019, but was still a striking number given the enormous challenges caused by the Covid-19 pandemic, according to the report.