Vietnam's online landscape has experienced drastic changes in 2009 and is expected to grow and change even more in 2010 and beyond. Where was the country before, and how has it changed? Here is a quick look at what the Vietnamese population has been doing online and some predictions about where it is headed in 2010 and beyond.
The first key to understanding Vietnam is by looking at its relatively young population and their adoption of the internet. With more than 70 percent of the population under 35 years old it is easy to understand why growth online has skyrocketed from less than 10 percent in 2003 to nearly 21 percent of the country in 2009. There is a male skew in this population which can be attributed to the successful introduction of MMORPGs from VinaGame, the country's top online game provider, tapping into the demand for low-cost entertainment from the country's youth population. The largest percentage of online users is in the 15-35 range, with the largest number in the teens and early twenties.
The young people in Vietnam (teens) spend the same or more time online then reading newspapers and magazines, which follows the global trend of young people moving online for their news and entertainment. Television still dominates but the shift is evident as more people move from rural Vietnam to the urban centers. However, Vietnam's population is still primarily rural which prohibits the spread of online activity.
Internet access was brought to the general public in the late nineties, with companies and government organizations experiencing the snail's pace of dial-up and 40-minute email sessions, fighting disruptions and cuts in service just to read CNN.com or check their Yahoo! email. Jump ahead 10 years and we see the country accessing primarily by dial-up, but with the line stability and speed you expect from the days of Netzero free dial-up internet. Across the country there are more than a few ISPs offering broadband services by both ADSL and cable, some parties offering TV and internet cable combinations with an eye on IPTV in 2010. Actual access was dominated by internet cafes until last year when the number of home access equaled internet cafes, and then surpassed it.
Aside from office access, anyone who has visited Hanoi or Ho Chi Minh City can tell you that these cities are covered head to toe with free Wi-Fi hotspots. Not limited to coffee shops, Wi-Fi is offered at KFCs, beer halls, flower shops, frozen yoghurt joints, supermarkets, hotels and more. You can turn on your Wi-Fi and find a signal nearly anywhere in District 1 of Ho Chi Minh City, the main business district, although there has been a slight decline in the past year as the churn of coffee shops increased due to the current economic instability that started late last year.
Mobile internet is not yet a popular access point due to the difficulty of setting up GPRS on phones. GPRS access is available across the country. However, mobile operators require manual setup for specific handsets, creating an unnecessary barrier to entry. Many mobile value-added service companies offer a paid automatic installation but the US$1 fee is daunting, plus many people do not trust the VAS companies for fear of stealing money and spam issues. Four operators will launch 3G by the end of Q1 2010 but the lack of high-end handsets available in the market, high cost of such handsets, and lack of localized content for 3G will most likely delay the adoption of the mobile internet until at least the end of 2010 to mid-2011.
Publishers & destinations
What have the Vietnamese been doing online? There has been a clear direction in where the population is spending their time, that generally follows the trends of the world. Enter the scene in the late nineties and you find most people getting their first email address on Yahoo, checking up on the latest news on a few key websites like Vietnam Net and VN Express. These two sites were launched by VASC and FPT respectively. VASC, a value added services company, was at the time a subsidiary of the government-owned Vietnam Datacommunications Corporation, which is the government entity managing the country's internet access. FPT, which stands for Food Processing Technologies, prior to iterations of changes in the acronym, started as and has continued to grow into the behemoth semi-private technology mega-company of Vietnam.
Yahoo was adopted first as the email standard, then as the chat standard with online messenger. While forums emerged as the primary social interaction online, Yahoo's blog platform, Yahoo 360, was adopted as the primary blogging site and grew to have 15 million members, with over 2 million actively contributing on a daily basis. Yahoo made a fairly large play around 2004-2005, opening a local office in Ho Chi Minh City, investing in branded internet cafes, and launching their local language homepage. Vinagame dominated the online gaming space with their Swordsman game (Vo Lam Truyen Ky) which is still the number one game.
Local and international social networks began to emerge, with Friendster getting an initial jump on the scene, but then quickly being surpassed by Yahoo 360 as the main destination for social interaction. Many small content-specific sites emerged using the free forum platform Vbulletin, which still stands as the main social platform in the country.
In 2008, Yahoo closed down their Yahoo 360 platform globally except for Vietnam, then after severe pressure from the government to include local moderation on the site, shut down their Yahoo 360 platform and replaced it with 360+. This also followed their global restructure towards a modularized platform, which unfortunately was not widely accepted by the Vietnamese.
While the rise of Facebook from 72,000 in May 2009 when Yahoo shut down Yahoo 360, to over one million in November is significant, bloggers still are looking for a destination that meets their needs. Vinagame launched an entertainment portal called Zing to fill many demands in 2005-2006, the most popular section being its MP3 site, where users can upload and download any songs they like. It was recently replaced by Zing Me, a Facebook clone that is built by and for young Vietnamese with copycat games (like Farmville) and original games built especially for the Vietnamese (such as a parking lot game). Zing's advantage is its existing massive entertainment portal and link to 16 million gamers.
Many other copycat sites have appeared and disappeared along with localized versions of international sites like Cyworld (Korea) and Friendster (US). It will be interesting to see what comes up in 2010 and how much Google Wave, Twitter, and other social network platforms make an impact on Vietnam.
Last but not least is the online advertising industry. Banners have been the predominant means of online advertising since the emergence of the internet in Vietnam. Like the rest of the world, animated gifs dominated the scene, followed by flash banners emerging around 2004. Rich media interactivity in banners emerged in 2009, including expanding banners, in-banner videos, and recently in-banner forms as seen in recent campaign run by Mindshare and Unilever for the new men's Rexona V8 variant. Web-to-mobile has been in play since 2007 but restrictions on mobile and internet spam have limited the use of this potentially powerful digital marketing tool.
One key area is the types and number of banners on typical Vietnamese sites. Due to the lack of third-party ad serving and tracking, the majority of sites charge on a cost-per-duration (CPD) model, charging for a week or a month at a time. While impressions and clicks are reported, the actual number of impressions is far away from the real number due to banner rotating ads and counting each rotation as an impression, instead of the impression being counted once per page view.
GroupM and Mindshare have worked with the publishers to accept Eyeblaster for third-party ad serving and tracking, creating an 'apples-to-apples' comparison for their clients, but the market has yet to accept and adopt such standardized measurement practices. A Vietnam IAB has recently formed and is working to improve the situation, from both the perspective of banner standards in sizes (currently over 400 unique banner sizes available in Vietnam) and the measurement side via proper tracking and reporting. Google Analytics is used widely, but the reports from publishers are often modified, to the degree of Photoshopped Google Analytics screenshots.
To date, Alexa is the primary tool used to measure a site's position in Vietnam, and ComScore will launch in Vietnam by the end of this year. International and regional research agencies like Nielson, TNS, and Cimigo are carrying out ongoing studies of the market, but no definitive resource is available as of yet.
One important point to consider is the shift of who is online and where they are accessing the internet. Because of the proliferation of internet cafes, IP tracking and CPM-based charging are not yet applicable in Vietnam. With the recent growth of home-based use, the potential of behavioral targeting and other targeting become more of a reality. From a CRM perspective, brands are becoming more sophisticated in their online marketing activities, collecting databases and building on them as they run more campaigns for individual brands and in the case of larger companies like Unilever, across brands. This will be fundamental as the economy continues to improve and the current generation of internet savvy first jobbers get married and begin spending more.
Mobile marketing and other digital technologies have also made their way to Vietnam. GroupM has successfully implemented a number of mobile marketing campaigns, also we have seen interactive wall campaigns and an augmented reality campaign in 2009. The extreme competition among mobile operators (seven currently in the market) are growing the mobile industry quickly, and with lower cost high-function handsets soon to be released (Google Android, Nokia, and Samsung will have smart phones under US$100 in 2010) we can expect third-screen internet use to grow rapidly.
Aryeh Sternberg is interaction director at GroupM Vietnam.