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The article doesn't say what its operating model is. But connecting possibly thousands of products from 700 suppliers to 7,000 customers, over the expanse of Vietnam, is a big task which probably requires a number of large warehouse, and a large fleet of trucks.
And if they own the inventory from suppliers, they will require large sums of money.
Their model is probably similar to Amazon's, where they own and operate the online platform and logistics, but not the inventory. But it is not yet known if they are more efficient -- and hence can offer customers more value -- compared to present distributors.
To do so they will probably have to slash prices for customers, and in so doing sustain losses while they build their purchasing (volume) power over suppliers. For the present distributors, they probably have time to formulate a strategy and respond. But if this start-up gain traction, the present distributors will have their margins squeezed.
As Bezos once said, "Your margin is my opportunity."
And if they own the inventory from suppliers, they will require large sums of money.
Their model is probably similar to Amazon's, where they own and operate the online platform and logistics, but not the inventory. But it is not yet known if they are more efficient -- and hence can offer customers more value -- compared to present distributors.
To do so they will probably have to slash prices for customers, and in so doing sustain losses while they build their purchasing (volume) power over suppliers. For the present distributors, they probably have time to formulate a strategy and respond. But if this start-up gain traction, the present distributors will have their margins squeezed.
As Bezos once said, "Your margin is my opportunity."