Retailers, advertisers vie for online bonanza in Vietnam

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An advertisement exhibition in Ho Chi Minh City. Photo courtesy of Thoi bao Kinh te Saigon Online

Vietnam's vibrant Internet community has prompted shopping websites to try various strategies to attain dominance and sent digital ad revenues skyrocketing.

Lazada, a luxury consumer goods retail website run by German-owned Rocket Internet, last month launched the "Online Revolution 2013" program to cut prices on a wide range of products like fashion, books, and electronics by 20-50 percent, Thoi bao Kinh te Saigon Online reported.

Christopher Beselin, general director and founder of Lazada Vietnam, said the website is set to increase product diversity and sell medium-priced products starting this year.

If possible the website would sell at 5-10 percent lower than average prices on other sites.

The company is also starting its street ambassadors program, first in the commercial hub Ho Chi Minh City, sending staff to meet customers and instruct them in buying and paying safely.

Vietnam is among five Southeast Asian countries in which Rocket Internet will invest US$250 million for its e-commerce sites in the near future.

It is also opening a C2C (customer to customer) site in Vietnam called Lamido.

Ho Anh Tung, a sales manager at e-commerce forum 5giay.vn, said two more websites -- 2banh.vn (two wheels) for motorbike lovers, and congnghe.5giay.vn for technophiles ("cong nghe" means technology) -- have been set up.

Connection with customers is crucial for C2C websites, and thus the more forums for them the better, he said.

Leading shopping site 123mua.vn, which has been around since 2004, merged with 123.vn, a B2C (business to customer) website set up last year .

Nguyen The Dong, managing director of 123mua, said it would focus on some strategic products and services.

Different as they will be in the long run, 123.vn is cooperating with Lazada group site Zalora for a promotion program involving thousands of products during the busy pre-Tet shopping season.

Vietnam's e-commerce is an attraction to foreign investors given the country has one of the biggest and fastest-growing Internet communities in the region.

Figures from the e-Commerce and Information Technology Department last October showed that more than 34 million out of 90 million Vietnamese use the Internet, and 18 million shopped online last year, spending an average of US$150, or $2.7 billion in total.

Adding up

A recent survey by Kantar Media, a global media monitoring and marketing company, found that Vietnam's large online population has caused income from online advertisements to shoot up, especially on mobile Internet.

It found that 21 million people accessed the Internet on smart phones, mostly for entertainment and search, making Facebook and Google among the most viewed.

They were the top sites viewed in Vietnam on Opera, the Norway-based browser said in a report it sent to the newspaper. Vietnamese ranked among the top 10 of Opera's 262 million users as of last November.

A source from Google said it is doing well in Vietnam, without providing further details.

Goldsun Focus Media, an advertisement joint venture between Goldsun of Vietnam and Shanghai's Focus media Holdings, held a mobile marketing forum in October as co-founder of the Vietnam Mobile Marketing Association.

Tran Thi Thanh Mai, general director of Kantar Media Vietnam, said advertisements in the print media, including around 800 newspapers and magazines, have slipped and would continue to do so.

Mai said the dynamic market requires advertisers to change their content and formats instead of sticking to the same templates of the past three to four years.

The Kantar survey showed that the advertisement pie is still dominated by television with 92 percent or some VND10.94 trillion (US$519.57 million) in the first half of 2013.

The rates for TV commercials surged to a record high, with a 30-second spot during The Voice Kids singing contest on VTV3 costing VND280 million ($13,300).

Vietnam has 198 TV channels and their advertisements affect the shopping decisions of 45 percent of people polled in Kantar's survey.

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