Sobanhang Secures $1.5M to Empower Vietnamese Small Businesses Online

SoBanHang Secures $1.5 Million Seed Funding to Empower Vietnamese Retailers

Brothers Hai Nam Bui and Hai Long Bui initially set out to create a bookkeeping application tailored for small retailers operating within Vietnam. This application, known as SoBanHang – translating to “sales book” – aimed to facilitate the digitization of business operations for companies traditionally reliant on manual paper ledgers. Similar solutions exist in other Southeast Asian markets, such as Khatabook in India, and BukuKas and BukuWarung in Indonesia.

However, a subsequent outbreak of COVID-19 in Vietnam dramatically altered the company’s focus. The small, often family-run businesses, typically employing fewer than five individuals, encountered significant challenges.

From Bookkeeping to E-commerce

Responding to the urgent needs of their target users, the SoBanHang team organized a hackathon. The outcome of this event was a novel product designed to enable retailers to establish online storefronts and efficiently manage incoming orders.

Within the last three months since its launch, SoBanHang’s “hyperlocal e-commerce enabler” has successfully onboarded nearly 20,000 merchants, with a substantial number initiating online sales for the very first time.

Investment Details and Founding Team

The company recently announced the completion of a $1.5 million seed funding round. This investment included participation from prominent investors, including FEBE Ventures, Class 5, and Kevin P. Ryan – the founder of well-known businesses like Gilt Groupe, Business Insider, and MongoDB.

Prior to the creation of SoBanHang, Hai Nam Bui established Datamart Solutions, a platform specializing in data analytics and automation. He also held key leadership positions at Lazada.

Hai Long Bui similarly accumulated several years of management experience at Lazada, before assuming the roles of Chief Analytics Officer and Chief Technology Officer at Landers Superstore, a supermarket chain based in the Philippines.

The Genesis of SoBanHang

The initial concept for SoBanHang emerged during a visit by Hai Nam Bui to a local grocery store while wearing a Lazada branded T-shirt. The store owners inquired about how they could begin selling their products online.

He assisted them in creating an account on Shoppe and uploading their product listings. Following the setup, they received their first order and immediately raised concerns about shipping logistics.

Addressing Key Pain Points

Hai explained that a third-party logistics provider would handle the pickup and delivery. Further questions arose regarding payment procedures, as the store owners lacked familiarity with the process and expressed reluctance to entrust goods to a third-party logistics company.

The majority of e-commerce transactions in Vietnam utilize cash on delivery, prompting further inquiries from the store owners about payment handling. Hai detailed how the customer would pay the delivery rider, who would then remit the funds to Shoppe, ultimately depositing them into the store owner’s digital wallet.

“They then asked about accessing their wallet and withdrawing funds to a bank account, even without having one,” Hai shared with TechCrunch. “This realization highlighted that many existing e-commerce platforms remain inaccessible to approximately 90% of retailers in Vietnam, due to their inherent complexity.”

Focus on Hyperlocal Commerce

Initially, Hai and his brothers focused on developing a digital bookkeeping application to aid businesses in digitizing their operations. However, the onset of the outbreak and subsequent lockdowns necessitated a more immediate solution – enabling them to begin selling online without delay.

SoBanHang’s research indicates the presence of roughly 16 million “nano” and micro-sized businesses throughout Vietnam. These businesses often serve a highly localized customer base, typically within a radius of just a few kilometers.

In many instances, businesses utilizing SoBanHang handle deliveries themselves, often on foot.

A Second Key Insight

“This led to our second key insight: retailers are primarily serving customers in their immediate neighborhoods. Buyers and sellers are often within walking distance,” Hai explained. “By connecting them directly, transactions can be completed, with retailers delivering goods and collecting payment at the customer’s doorstep.”

This approach eliminates the need for complex logistics or payment systems, and allows merchants to avoid the substantial commission fees associated with third-party delivery applications.

Adapting to Existing Infrastructure

Many of SoBanHang’s clients previously managed transactions manually, lacking a point-of-sale system or even a laptop. Consequently, the application represents their first foray into digital operations.

While SoBanHang is versatile and applicable to various retail sectors, it has experienced particularly strong adoption among food and convenience stores during the COVID-19 pandemic.

These smaller retailers often rely on direct messaging for order intake, but SoBanHang streamlines the process and expands their sales potential. Establishing an online presence also prepares them for future disruptions and strengthens customer relationships.

Strategic Partnerships and Future Growth

SoBanHang has established a strategic partnership with Viettel, Vietnam’s largest telecommunications provider. This collaboration allows them to offer discounted SMS messaging to businesses, enabling them to reach customers with special offers even without the SoBanHang application installed.

For example, a grocery store can quickly notify shoppers about surplus fresh fish via a text message blast.

Hai anticipates that, once lockdown restrictions are lifted, SoBanHang will empower small retailers to effectively compete with larger chains like supermarkets and convenience stores. Their key advantage lies in their established, personal relationships with their customers.

“We aim to transform these relationships into a new and effective sales strategy,” Hai stated.

Looking ahead, SoBanHang intends to resume development of its original bookkeeping application. Plans include the integration of financial services, such as working capital loans that can be disbursed without requiring a digital wallet or bank account. However, in the immediate future, the startup will remain focused on enabling small retailers to engage in online sales for the first time.