(International Business) Nhóm Cuối - Chopp

FOREIGN TRADE UNIVERSITY
CAMPUS II, HO CHI MINH CITY
INTERNATIONAL BUSINESS ASSIGNMENT
BUSINESS ANALYSIS OF CHOPP COMPANY
Instructor: Nguyễn Thị Trung
GROUP: Nhóm cuối – K55CLC4
HOÀNG THY TRÚC NHI 1601015317
NGUYỄN VŨ HOÀNG TẤN 1601015426
NGUYỄN NGỌC ANH THƯ 1601015489
TRỊNH THỊ THẠCH THẢO 1601015469
HUỲNH PHẠM THỦY TIÊN 1601015508

OVERVIEW
Company name: Chopp Single-member Limited Liability Company
Key activities: On-demand online grocery shopping and delivery services in 1 hour
I. MACROECONOMIC ENVIRONMENT ANALYSIS
1. POLITICAL AND LEGAL
1.1. Government’s support for start-ups
To encourage entrepreneurship, the Vietnamese government has established a number of
funds at state and provincial/city level to support startups. Some of the programs are as
follows:
- SpeedUP is a VND 11.75 billion (US$ 520,520) fund, which has been started by Ho Chi
Minh City’s Department of Science and Technology. The fund invests in 14 startups, with
investments ranging from VND 350 million (US$ 15,500) to VND 1,282 billion (US$
56,792).
- Saigon Silicon City Center is a 52-hectare complex, which is being built to support tech-
focused startups and international firms.
- National Technology Innovation Fund (NATIF) is a government agency and financial
institution under Vietnam’s Ministry of Science and Technology that provides grants and
preferential loans for R&D, innovation, and technology transfer.
- National Agency for Technology, Entrepreneurship, and Commercialization
Development (NATECD) is a national platform under Vietnam’s Ministry of Science and
Technology that provides training, mentorship, and financial aid to startups.
1.2. Tax incentives for technology enterprises
Decree 13/2019 / ND-CP on science and technology enterprises have just been issued by the
Government stated an 4-year tax exemption and 50% reduction of payable tax for the next 9
years of corporate income tax, as long as revenue of products formed from science and
technology results reaches a minimum rate of 30% of the total revenue of the enterprise.
2. ECONOMICAL
GDP growth rate of Vietnam increases by 7.1%, sales of goods and services increases by
12.4% and inflation rate is at 3.5%, lower than GDP growth rate. As a result, it is a positive
sign for start-ups to boost their revenue.
3. SOCIAL AND TECHNOLOGY
With over 95 million residents, Vietnam ranks as the 15th largest population in the world. By
2030, the population will grow to 105 million, as forecasted by Worldometers. Together with
a growing population, the middle class of Vietnam is increasing faster than of any other
Southeast Asian nation. Steadily increasing economy means bigger income which, in turn,
will result in the growing middle class. A market research firm Nielsen estimates the middle
class in Vietnam to grow to 44 million residents by 2020 and to 95 million by 2030. This will
support consumerism making Vietnam a profitable target for foreign investors.
Vietnam has a high rate of smart phone penetration. According to Nielsen Vietnam
Smartphone Insight Report 2017, the number of people using smartphones, among mobile
phone users, accounts for 84 per cent in 2017 while mobile phone users accounts up to 95%
of total population.
4. ENVIRONMENTAL
The biggest environmental issue of online grocery service is plastics waste. According to the
World Bank, Vietnam is one of the biggest consumers of plastic in the world, standing at the
17th out of 109 countries. Vietnamese consumers often use plastic grocery bags provided by
sellers for free. In Vietnam, plastic consumption will reach 55 kilograms per capita per year
in 2020, according to Vietnam Plastics Association (Yaniar, 2018). Every day, in Ho Chi
Minh City, Vietnam’s largest city, approximately 120 tons of packaging of all types is used,
in which 60 per cent comes out in plastic, and the figures keep increasing year by year
(Vietnam News, 2013). According to the Ministry of Natural Resources and Environment of
Vietnam, solid waste, including plastic waste, thrown out in urban areas alone will reach 22
million tons per year by 2020 (VN Express, 2017). Most disposed waste ends in landfill or in
the environment.
II. MARKET OVERVIEW
1. Market size and market share
According to Marketoi, Vietnam’s online grocery market is estimated at 300 million USD
with annual growth rate of 10%.
Chopp's revenue in 2016 is 11,825 USD. By the end of November 2017, its revenue increased
to 33,884 USD. Chopp’s market share in the year 2017 was approximately 0.011%.
2. Competitors
Flexibility (real-time chat
& multi-shop
Restaurant Grocery
In online delivery market, there is two main segments: ready-made F&B delivery service and
grocery delivery service. In ready-made F&B delivery service segment, main competitors are
Now.vn, Grab Food and Go-Food. Chopp is positioning in grocery delivery service, which
means Chopp sells food as ingredients for cooking and FMCG products. On the other hand,
there is another competitor: Marketoi, which connects small shops/e-commerce shops with
customers and has the same product portfolio as Chopp.
Competitive Benchmarking
Now.vn Grab Food Go-Food Chopp
Pricing Commercial center: 15,000 VNĐ/first 10,000 VNĐ/ 20.000
7,000-8,400 VNĐ 2km first 2km VNĐ/store
/km (minimum: 5,000 3,000
30,000 VNĐ) VNĐ/additional VNĐ/additional
Urban: km km
7,000 VNĐ/km Changed route
(minimum: 20,000 – surcharges: 5,000
25,000 VNĐ) VNĐ/km
Suburban:
6,000 VNĐ/km
(minimum: 15,000 –
20,000 VNĐ)
III. INDUSTRY PORTER’S FIVE FORCES ANALYSIS
Bargaining
Legend power of
buyers
0 No threat to Chopp 5
4
1 Insignificant threat to Chopp 3 Bargaining
Threat of 2
2 Low threat to Chopp power of
substitution 1
0
suppliers
3 Moderate threat to Chopp
4 Significant threat to Chopp
Rivalry
Threat of
5 High threat to Chopp between
new entrant
competitors
Bargaining power of buyers: High Threat

In this market, the power of customer is very high. Customer can easily switch to offline retail
channel if the service fee charged is too high.
Bargaining power of suppliers: Significant Threat
The prices displayed on Chopp app is the current price in stores. As a result, Chopp is
dependent on suppliers in terms of price. Partnering with Chopp will benefit stores and
supermarkets as it increases their sales and for small stores their brand will be promoted to
customers. However, for large supermarkets, revenue increase for partnership with Chopp
accounts for a small amount of their total revenue so that the bargaining power of suppliers is
quite high.
Rivalry between competitors: Moderate Threat
Chopp is positioning in online grocery delivery services segment and their competitors
(Grabfood, Gofood, Now.vn) are only focusing on ready-made food delivery services
segment. In the future, with the learning experience from ready-made food delivery services
segment, their competitor may target at online grocery delivery services segment.
Threat of new entrant: Insignificant Threat
There is no advantage on economies of scale and low capital investment to enter this market.
However, the threat of new entrant is quite low as it requires technology (mobile app),
network of suppliers (stores, supermarkets) and human resources to compete in this market.
Threat of substitution: Significant Threat
The only substitution is offline store with their delivery system. Customer can easily change
to offline store so there is no switching cost and brand loyalty. However, main differentiation
between Chopp and offline store with their delivery system is convenience - customers can
order from multiple stores/supermarkets in just 1 app while for offline stores customers can
only order at 1 store per time.
IV. COMPANY’S TOWS ANALYSIS AND RECOMMENDATION
Strength Weakness
1. First mover advantage in 1. Dependence on human factors in
online grocery delivery executing orders (people picking at
service stores and deliverer)
2. CEO’s professional 2. Limited orders (maximum order is
expertise in developing 5/hour)
software from Silicon 3. Average service charge is about 20-
Valley 25.000 VNĐ for an order with value
3. Unique mobile app of 200.000 VNĐ, accounting for 10%
4. Have a variety of of order value and still high for daily
partnership with grocery shopping of Vietnamese
stores/supermarkets women
4. Dependence on partner stores to
generate revenue
5. Payment method: only by COD
Opportunities S-O Strategy W-O Strategy
1. Rising middle class 1. Extend partnership with 1. Develop their own brand name for
population more organic food (W4-O1O4)
2. Strong economic stores/supermarkets to 2. Allow customer to pay by credit card,
growth rate provide customers with e-wallet (W5-O5)
3. Customer insight is more choices (S4 - 3. Offer discount for large number per
inclined towards more O1O2) month for customers (W3-O4)
convenient way of 2. Focus on organic food in
shopping product catalogue (S1-
4. The need for grocery O1O4
shopping is high for
Vietnamese since they
are fond of cooking
fresh dishes everyday
Threats S-T Strategy W-T Strategy
1. The main competitors 1. Work closely with 1. Outsourcing people for picking
are local markets, suppliers to ensure logistics for delivery can be used. It
vendors along the road higher quality goods will ensure fulfilment of peak time
and covered the country than local markets, (W1W2-T2)
with density vendors (S4-T1)
2. If customer orders are 2. Introduce new feature
at peak time, there is that allows customers
lack of human to chat online with
resources to fulfil order picking staff to suit
3. Picking the right food customer tastes (S2-
to suit customers’ tastes T3)
(choose different
mangoes for customers
who like ripe mango or
those who like medium
mango fruit)
REFERENCES
1. Koushan Das (2018), Startup Ecosystem in Vietnam [available at:
https://www.vietnam-briefing.com/news/startup-ecosystem-vietnam.html/]
2. Kantar Worldpanel (2019), Kantar Worldpanel Vietnam Insight Handbook,
[available at: https://www.kantarworldpanel.com/vn/news/Insight-Handbook-2019]
3. IDJ Group (2018), 9 reasons why to invest in Vietnam, [available at:
http://idj.com.vn/en/9-reasons-why-to-invest-in-vietnam/]
4. Germain Blanchet (2017), Marketoi business proposal, [available at:
https://www.slideshare.net/VIISAVN/6market-oi-slide-deck]

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FOREIGN TRADE UNIVERSITY

CAMPUS II, HO CHI MINH CITY

INTERNATIONAL BUSINESS ASSIGNMENT

BUSINESS ANALYSIS OF CHOPP COMPANY

Instructor: Nguyễn Thị Trung

GROUP: Nhóm cuối – K55CLC4

HOÀNG THY TRÚC NHI 1601015317

NGUYỄN VŨ HOÀNG TẤN 1601015426

NGUYỄN NGỌC ANH THƯ 1601015489

TRỊNH THỊ THẠCH THẢO 1601015469

HUỲNH PHẠM THỦY TIÊN 1601015508

Bargaining power of buyers: High Threat

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