Hanoi
resident Nguyen Thi Lan Phuong is an e-merchant’s dream. She likes to go
shopping but has little time to fight the Vietnamese capital’s crowds and
traffic, so the mother of two frequents NhomMua and Muachung, two of Vietnam’s
many Groupon (GRPN) clones.
Since discovering the sites in July, she’s
bought clothes for her kids, pots and pans for her home, and facials for
herself. “I sometimes buy things I don’t need, but it’s too good a deal to pass
up,” she says.
Consumers like Phuong are attracting online
entrepreneurs to a market they believe is on the cusp of an online revolution,
one that could soon create Internet success stories on par with China’s Baidu
(BIDU) and Tencent. “There’s a lot of interest in Vietnam’s information
technology space right now,” says Deepak Natarajan, the Singapore-based
director of Intel Capital, the chipmaker’s venture capital arm. “There’s huge
growth potential there.”
Of Vietnam’s 88 million people, about
one-third are online—and most of those are young urban dwellers ready to shop.
They’re “getting to the age where they are going to start consuming services
online,” says Jonah Levey, chairman of Navigos Group, which owns VietnamWorks,
a jobs website modeled on Monster.com (MWW). “It’s perfect for e-commerce.”
Vietnam already has more than two dozen sites
mimicking Groupon, the Chicago company that offers steep discounts to spas,
restaurants, and other merchants. The leaders include NhomMua, with 1 million
registered members, along with Muachung and Cung Mua. “The market still has a
lot of room to grow,” says Nguyen The Than, deputy general manager of Vietnam
Communications, which owns Muachung.
The companies have to make some big
adjustments to adapt the U.S.-spawned group-buying model to a country that
lacks a lot of infrastructure. Since most Vietnamese don’t have printers,
NhomMua employs a team of over 100 couriers who scoot around Hanoi and Ho Chi
Minh City on sky-blue Honda motorbikes delivering vouchers to customers. The
messengers also collect payment in cash, since few Vietnamese have credit cards
or use PayPal-like e-wallet services.
Such problems have kept NhomMua confined to major
metropolitan areas. “The growth rate is a lot slower than other countries
because we have to handle the logistics,” says Tom Tran, chief executive of MJ
Group, which owns NhomMua.
Solving the online payment problem is the
biggest challenge for Vietnam’s e-commerce players, says Ha Hong Hao, the CEO
of Tretho Information Service, which owns a parenting website with 700,000
members. “For payment, you have to work individually with each bank and
cooperate with many middle guys,” she says. “It’s still a big barrier for this
business.”
The bottom line: One-third of Vietnam’s 88
million people are online, and some entrepreneurs talk of an Internet boom.
The authors of this article: Einhorn is Asia
regional editor in Bloomberg Businessweek's Hong Kong bureau. Ha is Vietnam
bureau chief for Bloomberg News. Pham is a reporter for Bloomberg News.
Bloomberg
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