Indonesia and the Philippines possess enormous development potentialfor Vietnamese start-ups, said guest speakers at the recent Start-ups2015 conference held in Hanoi.
Do Tuan Anh, founder and CEO ofmobile content platform distributor Appota, said Indonesia hascharacteristics similar to Vietnam's from a few years ago, but itsmarket had seen strong growth in recent years.
"Internetinfrastructure there is less developed. Two years ago, its internetspeeds were as slow as those provided by a dial-up connection. Digitalcontent providers have to depend on infrastructure, so they cannotimprove the quality of content," he stated.
Appota received aseries B funding from Singapore-based and Japanese investors last yearto expand its operations in the region. It currently has branches inSingapore and Indonesia, with about two million users in Indonesia.
Anhsaid the company is yet to turn a profit from the Indonesian market,and its biggest difficulty has been its inability to allow its initialinvestment to reap returns of millions of dollars.
He also listedthree important factors that start-up firms should consider whileentering the international market, which are its language and culture,laws, and finding local partners.
"Start-up businesses shouldmarket their products outside Vietnam. Who knows, maybe your businessmodel is not appropriate for the local market, but is suitable for othercountries", Anh noted.
Nguyen Khanh Trinh, founder and CEO ofCleverAds, said domestic firms should gather data from foreign marketsbefore they take the decision to invest in them. He added that whenentering Indonesia and the Philippines, online advertising providerCleverAds used Google's data to gather more knowledge about thesemarkets.
"Like Vietnamese, Indonesians and Filipinos are alsoxenophiles. Therefore, when a good business model appears in theircountry, and is deemed appropriate by their national yardsticks,customers will be willing to pay for the product," Trinh said.
Theyear 2014 saw big foreign companies foraying into Vietnam, such asGrabTaxi and Uber. Nguyen Tuan Anh, General Manager of GrabTaxi Vietnam,said there was fierce competition among taxi-booking applications(apps) last year, but in 2015, some new service apps will emerge.
"Recentlywe have seen the launch of household service apps, including Taske andviecnha.vn... There are a lot of niche markets," he said, suggestingthat start-ups also follow the trend.
Anh also emphasised on theimportance of doing market research. "In order to dominate the market,conducting research is very important. However, Vietnam is not good inthis field.
Failures are sometimes opportunities because if we do not try, we will not know if it is right or not," he said.
Theguest speakers also agreed that big international companies, such asUber, GrabTaxi and Lazada invest a lot in Vietnam to dominate themarket. However, not all investments are effective.
According toTran Hai Linh, CEO of e-commerce firm Sendo, a strong point of biginternational companies is that they have lots of money. He pointed outthat Lazada's budget for one month equalled Sendo's budget for a fewyears.
"Companies often achieve success abroad. While enteringVietnam, they know how to invest and they undertake a lot of tests,which Sendo has not done before," he said.
"However, it is easyfor them to use money without worrying too much about the returns.Besides, foreign companies are subject to the management of its leadersbased abroad, so the decision-making process takes time."
PhamAnh Duc, former country head of marketing at Lazada, suggested thatlocal firms and big enterprises need to cooperate with each other formutual development. He said the market is large enough, and thesecompanies need to satisfy their customers, not their enemies.
"Abig company cannot do everything, so there is a need for an ecosystem.This means that all sorts of enterprises have the opportunity to earnmoney," he said.-VNA
Do Tuan Anh, founder and CEO ofmobile content platform distributor Appota, said Indonesia hascharacteristics similar to Vietnam's from a few years ago, but itsmarket had seen strong growth in recent years.
"Internetinfrastructure there is less developed. Two years ago, its internetspeeds were as slow as those provided by a dial-up connection. Digitalcontent providers have to depend on infrastructure, so they cannotimprove the quality of content," he stated.
Appota received aseries B funding from Singapore-based and Japanese investors last yearto expand its operations in the region. It currently has branches inSingapore and Indonesia, with about two million users in Indonesia.
Anhsaid the company is yet to turn a profit from the Indonesian market,and its biggest difficulty has been its inability to allow its initialinvestment to reap returns of millions of dollars.
He also listedthree important factors that start-up firms should consider whileentering the international market, which are its language and culture,laws, and finding local partners.
"Start-up businesses shouldmarket their products outside Vietnam. Who knows, maybe your businessmodel is not appropriate for the local market, but is suitable for othercountries", Anh noted.
Nguyen Khanh Trinh, founder and CEO ofCleverAds, said domestic firms should gather data from foreign marketsbefore they take the decision to invest in them. He added that whenentering Indonesia and the Philippines, online advertising providerCleverAds used Google's data to gather more knowledge about thesemarkets.
"Like Vietnamese, Indonesians and Filipinos are alsoxenophiles. Therefore, when a good business model appears in theircountry, and is deemed appropriate by their national yardsticks,customers will be willing to pay for the product," Trinh said.
Theyear 2014 saw big foreign companies foraying into Vietnam, such asGrabTaxi and Uber. Nguyen Tuan Anh, General Manager of GrabTaxi Vietnam,said there was fierce competition among taxi-booking applications(apps) last year, but in 2015, some new service apps will emerge.
"Recentlywe have seen the launch of household service apps, including Taske andviecnha.vn... There are a lot of niche markets," he said, suggestingthat start-ups also follow the trend.
Anh also emphasised on theimportance of doing market research. "In order to dominate the market,conducting research is very important. However, Vietnam is not good inthis field.
Failures are sometimes opportunities because if we do not try, we will not know if it is right or not," he said.
Theguest speakers also agreed that big international companies, such asUber, GrabTaxi and Lazada invest a lot in Vietnam to dominate themarket. However, not all investments are effective.
According toTran Hai Linh, CEO of e-commerce firm Sendo, a strong point of biginternational companies is that they have lots of money. He pointed outthat Lazada's budget for one month equalled Sendo's budget for a fewyears.
"Companies often achieve success abroad. While enteringVietnam, they know how to invest and they undertake a lot of tests,which Sendo has not done before," he said.
"However, it is easyfor them to use money without worrying too much about the returns.Besides, foreign companies are subject to the management of its leadersbased abroad, so the decision-making process takes time."
PhamAnh Duc, former country head of marketing at Lazada, suggested thatlocal firms and big enterprises need to cooperate with each other formutual development. He said the market is large enough, and thesecompanies need to satisfy their customers, not their enemies.
"Abig company cannot do everything, so there is a need for an ecosystem.This means that all sorts of enterprises have the opportunity to earnmoney," he said.-VNA
