S2 Episode 9: SyPhong and My Linh of Telio: Becoming a Unicorn of Impact by Serving Mom and Pop Shops in Vietnam

This episode is co-hosted by my colleague Dimitra Taslim. Dimi is on the investment team at GGV Capital. 

Today on the show, we have SyPhong Bui and My Linh from Telio. Founded in 2018, Telio is already Vietnam’s largest b2b eCommerce platform. It connects small traditional retailers with brands and wholesalers on a centralized platform using technology and data. Telio is a GGV portfolio.

On the show, we discussed how SyPhong got his idea for Telio because of Jack Ma from Alibaba, the lessons he learned from 2 previous failed startup he founded, the challenges facing mom and pop shops in Vietnam and how the tech ecosystem in the market has evolved in the market.

SyPhong, the founder of Telio has 10 years of experience across telecoms and banks in both France and Vietnam. SyPhong drew inspiration for Telio after being selected for the Alibaba leadership program in 2018, learning a lot about the advanced b2b landscape in China and India. He founded two other companies in Vietnam before Telio. He has a bachelor’s degree in Computer Science from Pierre and Marie Curie University and a Master of Computer Science in Paris. My Linh, the head of strategy of Telio, has a bachelor’s degree in economics from the University of Birmingham in the UK. She spent four years working for different startups in Vietnam and has joined SyPhong in his previous company before Telio.

Hans: Tell us the story behind how you come up with the idea for Telio during the Alibaba Leadership Program.

SyPhong Bui:

Before running Telio, I built two other companies, one for online car rental and another one for cashless payment. During the previous company for cashless payment, I was selected as one of the eFounders for Alibaba’s eFounders program and we were in Hangzhou on Alibaba campus for 10 days. The objective of those 10 days is to understand e-commerce logistic, payment and then also travel industry and how the golden triangle of e-commerce, logistics and payment help Alibaba to grow. We learned from Alibaba the importance of being inclusive in your business. Inclusive meaning that everybody can use your product and your product can help other people’s businesses to grow.

It’s a very fundamental idea, and we heard that straight from Jack. It touched me very deeply. And I think about how we can help the household businesses in the country. And indeed, after our research again and again about the daily lives of small business owners, we found out that they have a lot of pain points. And from there, we decided to create Telio.

Hans: Yeah, Jack has always been about helping the little guys from day one. Alibaba is the ultimate SMB tech or b2b2c company.

SyPhong Bui:

During that period of time, we also learned how he sees small businesses as the backbone of the economy for every country. According to him, helping these businesses will have a big impact on society.


Right, and I think one reason why Alibaba grew so much over the last two decades was they empower the little guys to make money, to better themselves, to be more efficient.

SyPhong Bui:

Correct. So this is something different from the two businesses that I have built before Telio. The first idea came from us looking at the big sector of the economy (transportation), where we do online car rental from individual to individual. The second sector that we look at is cashless payment. And we wanted to build a big company and then after that layer other services on top of that, but we have been doing businesses from our perspective. After the trip to Hangzhou and meeting with Jack and seeing the ecosystem, it changed our mindset. I was back in Vietnam and tell my team, “Hey guys, we need to do the business that our customer wanted us to do.” So that is how we decided to work closely with the household businesses or small retailers across the country.

Dimi: Can you tell us what kind of problems do these small mom and pop shops in Vietnam face? How many are there , and why are they so important to the local communities in Vietnam?

My Linh:

For the previous payment startup, we have a lot of mom and pop stores as our acceptance points. We found out that cashless payment isn’t one of the main pain points of the mom and pop stores. However, we find out that fulfilling their stores is a pain point where we can help.  

Basically, a mom and pop store has an average size of 20 to 30 square meters and sells about 500 to 600 SKU. With that, they have to contact around 50 to 80 contact points to fulfill their store suppliers. The reason is a typical supplier in Vietnam doesn’t sell multiple brands or multiple verticals.

The second problem is that the pricing is not very transparent in the FMCG wholesale market. It’s often difficult for a store to find which is the best supplier in town for a particular type of goods, who have the best price as well as other supporting policies. These stores often only find out the price after they have received the goods. It’s very hard to ask for the price with typical suppliers. They tend to only give pricing for the first few items and get reluctant to give more.

The next pain point is delivery. Suppliers tend to have free delivery only if retailers meet a certain MOQ (minimum order quantity). Anything below that, they won’t give free delivery at all. It gets worse for smaller mom and pop stores. Sometimes they get delivery but it’s not on time, or it’s scheduled delivery within a certain day in a week. That means without predicting their stock really well, they will have some out of stock timeframe for their stores. That’s how we come up with Telio, where they can easily find sources for their goods all in one place with flexible delivery and transparent pricing. So instead of managing multiple contact points, multiple deliveries within a day, or different days in a week, they can now order from Telio and have delivery in one shot.

SyPhong Bui:

We started with a specific set of retailers who sell fast moving consumer goods, FMCG. There are more than 300,000 of them across the country, and then they are selling 85% of the whole country’s FMCG volume. This channel is responsible for about 17 billion USD FMCG sales every year. Our vision is to expand to retailers selling other types of goods as well. And there are more than two million small retailers across the country. This is a very big population that we would love to empower them to do better business every day.

Hans: Right. At GGV, we have spent a lot of time looking at this category. We invested in companies that are empowering and enabling mom and pop stores in Latin America, Indonesia, India and now Vietnam.

Dimi: SyPhong, you mentioned that 85% of all FMCG sales flow through these mom and pop shops, which is quite similar to India’s number. Udaan became the fastest unicorn ever in the history of India. Should we expect the same from Telio?

SyPhong Bui:

That a very good and tough question. We are working on a big and important category because it is all fast-moving consumer goods, the essential goods for people’s daily lives. If a company like ourselves capturing this opportunity as a whole, I definitely believe that we can become a unicorn in the country.

I recently always tell my team that the definition of a unicorn is valuation of more than 1 billion USD. We would love to become a unicorn of impact first, which means every single action we deliver can make our customers happy. We want to deliver billions of billions of impacts to our customer, a good delivery on time making our customers happy or a better pricing for them, creating jobs for unemployed people, especially for the middle class and lower-class people. Those are the impact that we really would love to create and being the impact lead that makers a unicorn of impact.


Right, those are good answers. And GGV will also don’t believe in a rush to grow your size. If you deliver value and you make a positive impact on society, good things will come over time.

Dimi: Could you tell the audience about the key drivers and metrics for a company like this operating in Vietnam?

My Linh:

As an early stage startup in Vietnam, we track a couple of metrics. The first one is the retention rate. Not only on the retention rate as the percentage of customers coming back over time but also their activities with us. Do they become more engaged, sourcing more percentage of their store through us?

The second metrics is the conversion rate. So how many retailers can we acquire per month, and to get that number of customers, how many have we approached? For those that we didn’t get, Why? We can then continuously improve our products so that it become fitter for the market and meet the expectations of our retailers. Those are the two metrics. GMV will come if we have more customers stay with us over time, more engaged with us over time.

Besides the growth metrics, we also care a lot about our financials metrics, the unit economics, average order size, the variable costs that we take up to generate those GMV, the percentage that go into costs and so on.

We also care a lot about our suppliers. We have a pool of suppliers that are divided into the brands, wholesalers the distributors. Our target is to connect with as many brands as possible, instead of retailers or distributors. We also track how many brands we can acquire over time, the GMV going through each of them, and the retention rate of the brands with us.

SyPhong Bui:

I would add a little bit more about how we track a retailer. We love to see the frequency of buying from our retailers keep increasing, also the amount of each transaction. The retailer wallet share. We track the number of SKUs that we can sell to our retailers. When we first started, we only sell 30 to 50 SKUs, but we keep increasing our SKUs. Besides sourcing, we also care about other aspects of store operations, like store management, working capital, etc. So we are always looking for opportunities to serve them better.

Hans: Could you talk a little bit about the tech ecosystem in Vietnam. How has that changed in the last few years?

SyPhong Bui:

Okay, so that is a big question. I’ll try to address that.

I have the luck to start my first company back in 2014, the early days of the startup in Vietnam. Five years back, we are at a very initial state.

I would say a good startup scene is made of good founders, good talent and good resources for building the company like IT talent and access to capital. You also need good mentors and support from the government. Back in 2014, we were at a very initial stage. Today we are in a more advanced state where the government is supportive and open for investments. I was lucky to be working on the cashless payments, so I have the opportunity to deal with regulators. I know that they are more open minded right now.

As for the talent, we not only have a lot of talent in the country but also oversea talent coming back to the country in this new era of development. We are in a good place on that. The world is also paying more attention to developing countries like ours. We are not a big country, but still have good traction with close to 100 million people population. Our GDP has been growing 6% to 7% year on year for more than 10 years. And then we are expecting to hit around 9% this year. We have an open economy with export and import, which creates a good landscape for investment to flow in. I would say that we are in a much better state right now. We still have a lot of things to do compared to a country like Indonesia or Singapore.

Another key factor for startup investors is the quality of the founding team. Everybody has the market data in order to know whether there are opportunities for investment. But the second question is whether the team is capable of doing so. This is another key thing that Vietnam needs to develop in the next few years in order to gain more traction for investment.

Dimi: What has been the most surprising thing about your entrepreneurial journey so far?

SyPhong Bui:

The most surprising thing is that I didn’t expect it to be this hard. I came from a corporate environment. I first started in Paris and worked to serve telecom companies in Europe and then worked in the financial sector for a long while before doing my own startup.

For us who had a good career path in corporate life, we didn’t know how hard startups can be. I keep calling “we” because it’s one of my friends from a reputable consulting firm. We co-founded the first company. We thought it would be easy and we’re going to build a very successful and big company. But things turned out very south for us. We failed and had to close the company after 8 months. Another very tough experience was that the second company that I grew from only myself to close to 160 people.  Then we cannot take it off and have to swallow the pain of letting people go. It’s very difficult. The lesson is to seriously consider the product market fit and putting customers instead of ourselves in the first place. This is a very surprising experience. But I think a good experience as it trains myself and then also the core team a lot on how to be, how to assess the business opportunity and how to run a business properly.


SyPhong and My Linh, as you know, Vietnam is growing very quickly and people are getting richer and richer every year, GDP per capita is growing very fast. For the convenience store segment, both the international and local competitors, big conglomerates like Vingroup, international players like Korea’s Lotte group is going into Vietnam and they’re setting up a lot of these convenience stores. They are air conditioned, a bit more comfortable than a mom and pop shop that you target. For both of you, how can you help your customer base to stay relevant for the Vietnamese consumers?

SyPhong :

Besides selling the daily essentials for people, mom and pop shops are also community points for people in the neighborhood. They are important for people and difficult to replace.

The trade-off with a new model is that you have to have prime locations and a large range of SKU covering from perishable, instant food like fried chicken, for example. The management become more complex, so is the cost of selling.

Based on our research right now, the pricing on the convenience store is often 10% more expensive than a mom and pop shop. Mom and pop shops remain convenient in a way that you can take a bike, drop by the shop and then take the good and go back. The pricing is much more affordable. A lot of these stores also offer credit for the end consumers. My father, for example, has some money in the pocket but very often he buys the good and pays at the end of the week or even at the end of the month.

This combination will give a lot of opportunities for mom and pop shop to sustain and grow, especially with the owners who know how to better manage the store with centralized procurement, store management and better financing of opportunity to grow. One of the key things we saw in China is that the digitalization of the mom and pop stores could be considered, especially in Vietnam, as a new retail opportunity for us. This is one of the key things that we think about and then that will bring a much more competitive force against chains and convenience stores.