Preparing for the Next Dot-Com Boom

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By Patrick Burke

dot come boom Now may be the time to act on the next big thing, but you’ll need to rack up some frequent-flier miles in order to get to the action.

There has been plenty of buzz swirling around Vietnam recently, and the country is luring online entrepreneurs and investors looking to tap into a rapidly growing Internet user base.

In 2010, 27 percent of the Vietnamese population was online.

That number soared to 33 percent in 2011 -- that’s more than 29 million Vietnamese using the Internet for networking, learning, gaming and, perhaps most importantly, shopping.

E-commerce is booming in the capital city of Hanoi. A recent Bloomberg Businessweek article declared the country on the brink of an online revolution

that could create startup success stories like Baidu and Tencent, both in China.

Traffic

To avoid Hanoi’s oppressive traffic, many city dwellers are taking to shopping online for everything from clothing to pots and pans to facials, according to Businessweek. Numerous Websites have imitated Groupon’s business model in the U.S., where deep discounts are offered to brick-and-mortar stores.

But as the market continues to grow and demonstrates the potential to grow even more, the market has its share of obstacles, said Deepak Natarajan, the Singapore-based director of Intel Capital.

Infrastructure beyond the country’s metropolitan areas is limited, many Vietnamese do not have credit cards, making payment a challenge, and most Vietnamese don’t own printers. To solve the printer issue, one company, NhomMua, relies on motorbikes to deliver the company’s Groupon-like vouchers.

It is these gaps in the supply line, infrastructure and payment system where a savvy investor might find opportunity. The mobile app market is another.

The mobile app market in Vietnam is seeing strong demand from overseas markets. According to research firm MarketsandMarkets, the global mobile app market is expected to hit $25 billion by 2015, up from $6.8 billion in 2010. While North America has led the market since 2009 with 41.6 percent revenue share, Asia is the largest market in terms of downloads, with 36 percent.

Rebecca Fannin authored the book “Startup Asia.” In an interview with the Saigon Times, Fannin spoke directly about the startup climate in Vietnam. She found the successful CEO’s at startups there were visionary, extremely focused, were able to keep costs down and were able to bring in impactful partners and backers. She said startups in Vietnam have much to offer.

“Their CEOs are very lively, dynamic individuals," she said in the interview. "I think the energy level is interesting, it’s high energy level and it’s very entrepreneurial. It reminds me of where China was 8-10 years ago.”

Fannin sees plenty of room for growth in Vietnam’s startups.

“The Vietnamese market has a lot of mobile users and a lot of Internet users, so there is room to grow," she said. "As Vietnam develops, they will also develop. If they can pick the right sector, they can also develop.”