OVERCOMING human resource problems, understanding local cultures and finding reliable partners are needed for Vietnamese startups to “go global”.
Speaking at a recent training programme organised by VnExpress.net, Grab Financial Group Vietnam chief executive officer Nguyen Tuan Anh said reaching out to the world was not optional but imperative for a startup to succeed.
“You may not go global right away, but you must have a vision to do it in the next five to 10 years. Vietnamese startups must conquer the global playground to increase their value, revenue and profit.”
Anh was one of the first employees of the giant ride-hailing service when it entered the Vietnamese market in 2014 on the heels of its success in four other South-East Asian countries, namely, Malaysia, Singapore, the Philippines and Thailand.
Startups could first start their business in a market with which they were familiar to master customers’ habits and behaviours, but to succeed, they will need to expand into other countries.
Going global also helps improve the company’s capacity and increase salaries for existing personnel.
Setting a goal to go global also demonstrates the potential of the startup to attract more investment.
The biggest challenge for such an ambition is, perhaps, finding a right partner. Startups that want to be successful in a new country will need to find a reliable partner.
When a problem arises in a new market, it is an opportunity for the startup to really understand what is going on in that market. For instance, when Grab entered Vietnam, it had accepted cash payment for taxi services, and car and motorbike services while its main competitor had only been available to users paying by credit or debit card.
Accepting cash payments was a necessary local adjustment in emerging markets. Making the decision to accept cash payments had been “one of the important realisations that Grab came to in South-East Asia.”
Grab’s success in the Vietnamese market was owed to three factors.
First, when it entered Ho Chi Minh City and Hanoi, it already had experience in four markets.
Second, the company was willing to deploy new services to meet customers’ needs. For example, it had taken only a month to launch GrabBike, an app-based motorbike taxi service, due to the high demand at the time.
“We did not think too much. We just saw the potential for investment and we did it. The market responded very well, ” said Anh.
Third, Grab had entered Vietnam at the right time when its technology infrastructure had begun to boom.
“The increase in the number of startups has been made possible with a good telecommunications system, the Internet, 4G, and improvement in technology and education, among others.”
Besides, there was a growing habit of using smart devices and a rise in enthusiasm for new technologies among Vietnamese, which also contributed to the success of Grab.
Grab, which has an estimated valuation of US$14bil (RM57.9bil), has become a one-stop app providing services and solutions for daily needs from transportation and food to entertainment and seamless cashless payment.
It has also partnered with fintech firm Moca to provide cashless payment via e-wallet. Users in Vietnam can now pay bills, book hotels, order food and send parcels from the Grab app.
Experts said Vietnamese startups are struggling with internationalisation in their local ecosystem. In Vietnam, entrepreneurs work in a very tough regulatory environment, with few international mentors to support them.
But despite the challenges, it is possible to build a successful global startup in Vietnam, they said.
The ecosystem in Vietnam is still young but the sector has entered the globalisation stage. The country has more than 3,000 startups with a third based on technology and the rest on consumers.
Though tech companies sprouted in Vietnam in 2000, it was not until 2016 that the country’s startup ecosystem became complete.
In 2017 around 92 startups received investments worth US$291mil. The most attractive industries for investment have been e-commerce followed by food technology and fintech.
“In the next 10 years, Grab’s vision will be the same, focusing on finding the most effective solutions to improve the quality of life of people through technology, ” Anh said. — Viet Nam News/ANN
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