If you know Vietnam well, you’d know it has three key areas of growth for startups these days. And it’s in this order: gaming, ecommerce, and mobile.
Gaming is felt most profoundly with two companies: VNG and dotGEARS. VNG is Vietnam’s premier startup with a revenue of US$100 million last year. It has built an empire from distributing games. DotGEARS is the company behind Flappy Bird, one of the most viral mobile games of 2014.
Meanwhile, investors have been focusing on ecommerce in the last few years as they see it as the next wave of Vietnam’s retail industry. Massive companies like Vingroup even promised to dump over US$30 million into an ecommerce division that seeks to replicate Alibaba in Vietnam. Finally, with the country’s explosive smartphone growth, it is likely that it will hit 30 million smartphone users early next year. This means mobile is a key area that is fresh and desperately in need of startups. It’s no wonder Appota recently got Series B funding to tackle mobile.
Gaming, ecommerce, and mobile are where everyone in the ecosystem is watching, but I think the fourth wave is booking. Here’s why.
Why are booking startups next?
Basically, booking is a natural extension of ecommerce. It solves all the same problems that ecommerce does: curation, trust, payment, and inventory. But it sells services instead of products. And although most of the services cater towards Vietnam’s growing middle class, a handful of the startups in the booking category are growing or financially stable.
With ecommerce, the startups are different based on their industries like groceries or fashion, but their key differentiation is in their model, such as B2C or C2C or even businesses that do both online and offline retail simultaneously. On the other hand, booking startups differentiate on industry, like travel or transportation. Generally, booking is a B2B2C business, which relies heavily on sales and customer service. Each booking startup must develop strong relationships with service providers in order to function.
For example, Ticketbox must have good business relationships with event organizers. The key here is service providers do not have strong distribution channels nor are they equipped to harness the power of the internet as they have to focus on the brick-and-mortar of their businesses. Booking startups give them a way to expand online.
What are booking startups, and who are they?
Essentially, to book is to reserve something online. This reservation could apply to tickets, events, travel, transport, and more. In the past year, this category has exploded with new startups and tech businesses.
In the transport category, we have startups include Vexere.com, Baolau.vn, GrabTaxi, Uber, and EasyTaxi. In a country where logistics is a major issue, transportation is a key category that needs disruption. Booking cars, taxis, buses, airplane flights, and trains is cumbersome and fragmented. Most of the time, customers book transportation over the phone.
In the events category, there are now multiple startups ferociously competing like Ticketbox.vn, VNTIC.vn, Sukien.io, Citynetevents.com, and Sukiennet.vn. Some may say this is such a small market but there are potential avenues for growth in the entertainment, listings, and education areas. Some of these startups have reached revenues up to five or six figures in US dollars per month.
Although these guys represent the vanguard, there’s also other unexplored spaces like restaurant booking, which Foody.vn may be entering into.
Clearly, Vietnam has plenty of unexplored frontiers for startups. And although bookings is not particularly sexy compared to chat apps or wearable technology, it shows that there is still considerable space for new tech innovation in Vietnam.Editing by Steven Millward