For the second consecutive year, Vietnam’s MoMo e-wallet was named among the “Leading 50” in the Top 100 Fintech Companies in 2019 report released on November 4 by Australian fintech venture capital investment firm H2 Ventures and KPMG.
“This rating has great meaning for the MoMo team,” said Mr. Nguyen Ba Diep, Vice President and Co-founder of MoMo. “We are proud to have shown the world that Vietnamese people can create products that resonate globally and are proud to show the world how Vietnamese fintech can compete internationally.”
Many other Vietnamese tech platforms and startups have also posted impressive results and most have their sights set on taking on their competitors in other countries.
With the explosion of technology in the digital era, developing technology platforms has become the most common choice for many Vietnamese companies and startups.
Looking back on MoMo’s story, Mr. Diep said it plans to become a super app and new technologies such as AI and big data are therefore being deployed to build a Recommendation and Personalization that helps users access services that are right for them.
For example, MoMo can recommend new movies for users to watch over the weekend and suggest activities in line with their habits and interests. Modern technologies are also being applied in the field of security, ensuring safety and maximum benefit for customers.
After a period of struggle, MoMo identified the key factor to success as being an understanding of users. In addition to cooperating with major banks in Vietnam, it also works with partners such as cinemas, restaurants, coffee shops, and State agencies.
“We expect MoMo to provide Vietnamese people with equal access to financial services, starting with basic needs such as education, health, electricity, and water, not just in games, apps, or movie tickets,” Mr. Diep told VET.
“We are significantly changing payment habits in Vietnam through building a diverse ecosystem. 2019 and 2020 are considered a key period, marking a new step for MoMo from a payment app to a super app in technology - finance - entertainment, providing intelligent Vietnamese products to Vietnamese people.”
Among major names, the ride-hailing app “be”, developed by the BE Group JSC, also has major ambitions. CEO Tran Thanh Hai told VET that the previous generation of large tech corporations in Vietnam chose processing industries for their development, while BE focuses on life. “I want to more towards applying more technology in everyday life,” he said.
To fulfill its ambition, BE will continue to invest in improving the tech platform and provide better services. In addition to improving technology, retaining customers is also a key factor, so BE strives to improve its service quality and business transparency. It will still hold attractive promotions for regular customers, as part of sustainable development efforts.
BE also introduced beFinancial in May, through a strategic cooperation agreement with VPBank, to enhance the digital financial ecosystem and help optimize demand for payment and consumption among individual consumers and drivers, as well as to support the business activities of large businesses and small and medium-sized enterprises (SMEs).
It has also launched the beCare program, as a step in its long-term business strategy of “getting drivers to be key” to “be” and at the same time realizing the BE Group’s commitment to creating benefits for its driver community.
“It is time for Vietnamese tech companies to build products that Vietnamese people can use,” Mr. Hai said. “We believe that local companies can compete with their foreign counterparts.”
Meanwhile, e-commerce platform Tiki expects to see its scale grow from tens of millions of products to hundreds of millions. Its effectiveness as an e-commerce channel, however, is not just about website traffic.
“The most important thing for Tiki is not about having the most advanced technology but bringing the best customer experience,” Mr. Ngo Hoang Gia Khanh, Vice President of Corporate Development at Tiki, told VET.
It has been investing significantly in product and service development in order to enhance the shopping experience. Mr. Khanh said the past five years has seen the emergence of many Vietnamese enterprises in all industries, even in fields usually thought to be dominated by foreign businesses, such as technology.
Vietnam already has many tech platforms and startups, such as home-sharing platform Luxstay and e-commerce platform Sendo.
The draft National Strategy on Industry 4.0 to 2030, prepared by the Ministry of Planning and Investment (MPI), notes that Vietnam is expected to have at least five tech companies valued more than $1 billion (known as unicorn companies) by 2025, and that figure will double by 2030.
Companies and startups have posted significant results. Launched in 2018, the “be” ride-hailing app has been downloaded to 4.5 million mobile devices and more than 35 million beBike and beCar rides have been completed, with about 350,000 ride requests each day and 50,000 driver partners. The app is available in nine of Vietnam’s cities and provinces.
Tiki’s monthly website traffic in the third quarter of 2019 was 27.1 million visits (both desktop and mobile); down slightly compared to previous quarters, according to iPrice Insight’s Map of E-commerce in Vietnam for the third quarter of 2019 released in October and based on data from SimilarWeb, a data analysis tool for websites.
Throughout its nine-year development journey, Tiki has attracted minority investors such as VNG (Vietnam), CyberAgent Ventures (Japan), STIC (South Korea), and JD.com (China).
After more than 12 years in business, MoMo wallet had reached more than 13 million users as at November, with 12,000 payment partners and 100,000 payment points nationwide. It is directly linked with 23 major banks in Vietnam and 43 domestic banks via the Napas portal.
Momo allows customers to not only buy telco credits, send money, or pay their bills, but also buy movie tickets, book airline tickets, take out insurance policies, and pay for goods and services at the 100,000 payment points, many of which are found in chains such as Circle K, Ministop, and FPT Shop.
According to Mr. Diep, founders with experience and user insight have the conditions to succeed, and there are other advantages to develop in Vietnam. Research from Google, Temasek, and Bain released in October noted that Vietnam’s internet economy is booming, as it heads towards $12 billion in 2019, for 38 per cent annualized growth rate since 2015, and a projected increase to $43 billion by 2025. A number of foreign investors have poured large sums into MoMo and Sendo over the last few months, contributing to growth.
There are also many challenges facing tech companies and startups. Competition is inevitable, from both local and foreign rivals. “Many giants in the region are willing to ‘burn’ millions of dollars on capturing the Vietnamese market,” said Mr. Diep. “They are not startups like us, but giants.”
Similarly, Mr. Hai said BE has used quality and social responsibility in developing operations and attracting customer, rather than simply offering low prices. “If foreign rivals are willing to ‘burn money’ to offer cheap rides and attract users, BE will initially be at a disadvantage because consumers are very much interested in price first,” he added.
“be” has also faced difficulties in legal matters. It registered as a transportation company applying technology, so taxes and duties on drivers and users are higher than at its competitors. Mr. Hai believes that in the context of complex changes in the field, the looseness of the legal framework will see foreign competitors taking advantage of loopholes and will result in a business environment lacking fairness and transparency.
Companies established by Vietnamese founders like MoMo should build products that appeal to Vietnamese customers. Mr. Diep said that Vietnamese people often prefer to use foreign products, so it is necessary to change this preference and turn them towards local products.
“With Vietnam’s economy still dominated by cash, companies like MoMo are working hard to create a cashless economy,” he said.
Though there are challenges, it can’t be denied that advantages exist for tech companies and startups to compete against the world. As Mr. Diep said, when building products, the ambition of Vietnamese company founders is not only to serve the domestic market but also regional markets, and there are indeed Vietnamese names competing with foreign rivals.