Masan’s products are displayed at a market in Hanoi
Masan products. Alibaba’s investment in the Vietnamese conglomerate’s retail arm comes as technology groups increasingly focus on south-east Asia’s nascent online grocery market © Reuters

Chinese tech group Alibaba is leading a $400m investment in the retail arm of Vietnamese conglomerate Masan, wagering on strong consumer spending growth in a country that has been a Covid-19 success story

Alibaba, founded by billionaire Jack Ma, is investing alongside Baring Private Equity Asia and others for a 5.5 per cent stake in The CrownX, in a deal that will value the Masan retail unit at $6.9bn. 

The investment is Alibaba’s first in Vietnam and comes as technology groups increasingly focus on south-east Asia’s nascent online grocery market. Alibaba contributed “substantially more” to the deal than Baring, two people familiar with the deal said. 

Masan, founded and chaired by billionaire Nguyen Dang Quang, also said it was in advanced discussions on a further strategic investment of $300m-$400m from other investors, which it said it expected to close later this year. 

The Vietnamese company, which operates the VinMart retail chain, said it planned to partner with Alibaba’s south-east Asian ecommerce unit Lazada to build its digital presence.

The deal will give Alibaba and Lazada access to a network of more than 2,000 stores, meaning the companies do not have to invest significantly to establish a distribution network in Vietnam. 

Masan and Vingroup, Vietnam’s largest conglomerate, merged their retail and agricultural subsidiaries in 2019. 

Vietnam’s economy was, alongside China’s, one of the few in Asia to grow in 2020 after its government took decisive steps to contain the pandemic. Vietnam’s recently agreed trans-Pacific and EU free trade agreements, as well as its location on China’s doorstep, have made it a magnet for foreign investment at a time of Sino-US trade tensions. 

“I think this is good news for Vietnam and reflects continuing foreign interest in the country, particularly in the consumer product and distribution spaces,” said Andy Ho, chief investment officer at VinaCapital, a Ho Chi Minh City-based investment manager. “Clearly, Vietnamese consumers are getting wealthier and wealthier as GDP continues to grow, even in 2020.”

The deal marks one of Alibaba’s biggest investments in south-east Asia since it acquired full control of Lazada in 2018 for a total of $4bn after several investment rounds. But Lazada has fallen behind regional rival Shopee, which is backed by Chinese internet group Tencent, in the past 18 months as it focuses on profitability and after several leadership changes. 

It also suggests that Alibaba will not completely dial back its international investments despite being in the crossfire of a Chinese regulatory crackdown on the tech sector.

The Vietnam deal is a “land grab” by Alibaba and Lazada, said Angus Mackintosh, founder of CrossASEAN Research. 

“Lazada has been flagging a little bit in a lot of markets such as Indonesia primarily to Shopee,” Mackintosh said. “But online groceries is an underexplored space and a very underdeveloped vertical in Vietnam. It is a good population story, with a lot of young, tech-savvy people.”

Credit Suisse and Deutsche Bank advised on the deal.

Follow on Twitter: @JohnReedwrites, @mjruehl


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