Oct 25, 2012

Vietnam - Local digital communication firms succumb to competition

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HCMC – A report of IDC shows that Vietnamese enterprises in the digital communication industry are facing tough competition from foreign companies.

For social networking, domestic websites such as Yume, tamtay and Zingme hold a 30% market share. Meanwhile, five foreign social networks such as Facebook, Twitter, Linkedin, Flicks and Youtube hold a dominant market share of a staggering 70%.

Regarding online games for cell-phones, domestic revenue accounts for a mere 30%. Notably, the market share of locally-made computer games is only 6% while imported games account for up to 94%.

The television sector is also underdeveloped as both official and hired channels fail to give as diversified programs as those in regional nations.

Le Thanh Tam, general director of International Data Group (IDG) Vietnam, said that the digital communication industry is developing dramatically in the world market with connection devices turning smaller and smarter. However, the local industry is still young and its development is far behind potential.

IDC researches have suggested that the local digital communication has fetched around US$3.3 billion in revenue, mainly from Internet users and readers of e-newspapers and magazines, not from social networking, e-commerce or online game services.

Meanwhile, digital communication revenues of regional countries such as Thailand and Indonesia reach US$4.9 billion and US$5.4 billion respectively. The two countries have seen comprehensive developments in many fields such as electronic advertising, video game, digital music and movies and e-commerce following B2B (business to business) model.

The difficulties of local enterprises result from their haphazard development and the lack of orientation of managing agencies, Tam said.

Ha Van - The Saigon Times Daily

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