Everything you need to know about the mobile market in Vietnam in 2013

Everything you need to know about the mobile market in Vietnam in 2013

August 23, 2013

by Anh-Minh Do

Some of you may already know Appota, one of Vietnam’s rising startup stars from Hanoi. It’s a mobile content platform that helps distribute apps, games, and general content to users while also doing the good work of getting developers paid. Well, every few months Appota compiles all the data it has on mobile in Vietnam. This time it’s got a comprehensive report of the latest figures and a nice slideshare you can check out at the bottom. The report frames the landscapes in three ways: the good, the bad, and the ugly. But before we get into the mobile insights, it’s worth noting some key stats on Vietnam. The majority of the population, about 70 percent, are under 35. That makes for a very young population, 30 percent of which live in the cities. More than 17 million people live in Hanoi and Ho Chi Minh city, Vietnam’s two biggest cities and places where more than 70 percent of the population have access to the internet.

The good

Last year, we reported IDC data that Vietnam’s smartphone sales totaled around four million total units. This year, it’s projected to hit well over six million.

Now, let’s get into Appota’s insights:

In terms of smartphone growth, Vietnam is the second fastest growing in the world, right after China.

The total number of iOS devices is up to four million. iPhones accounted for three million of those devices.

As of late 2012, Appota estimates that there are about nine to ten million Android units in the country.

According to many of Vietnam’s leading sites, 70 to 80 percent of total visitors from Vietnam’s two major cities were on mobile.

Total smartphone sales grew 50 percent per year.

Approximately 60 percent of revenue in the online mobile gaming market (an estimated $50 million) comes from gambling games, most from Vietnamese companies.

40 percent of revenue from online games is accrued by China-made titles.

One of the most popular types of games is card gaming.

Currently, the product lifecycle of a mobile online game in Vietnam is three to six months, with a rapid decrease in activity and user acquisition afterwards.

In Appota’s assessment, the mobile payment and online payment landscape is maturing with prepaid cards, scratch cards, and e-wallets. On top of this has been a steady rise of third-party app stores likeAppstore.vn as well as forums and social networking sites that cater to the gaming market.

The bad

At the moment, the mobile gaming industry is in an odd limbo. Unlike the online media and chat app industries, which are now being given clearer regulation, it’s still unclear where the mobile gaming policies are headed. This may cause problems for businesses in the future, but the landscape is still in limited development.

The two dominant payment methods are SMS and scratch-cards. As I mentioned a few days ago, SMS is the primary method (up to 92 percent) by which DeltaViet, Vietnam’s rising online learning platform, gets payment. And VNG, one of Vietnam’s biggest technology companies, made its millions on top of scratch-cards. Although payment methods in Vietnam are on the up and up, there are still some barriers. This includes the high transaction fees incurred by telcos. For example:

40 to 65 percent of SMS transactions go to the telcos.

15 percent of scratch-card revenues go to the telcos.

On top of this, SMS and scratch-card payments are quite slow. On average, they take up to 60 to 90 days to transact after the customers make the payment.

Lastly, mobile marketing is the next frontier. This is also one of the hottest topics in recent months at events like Mobile Monday, where many leaders in the online marketing and mobile development space are looking for new ways to grow the mobile marketing pot. Everything from unique augmented reality to QR codes are seen as potential new modes for marketing. SMS marketing has long been at the forefront of Vietnam’s mobile marketing wave, but it’s been limited recently as users complain of spamming, and the telcos and managing agencies manage their usage. This area still has a ways to grow.

The ugly (or rather, the peculiar)

China has a particularly close hold on Vietnam’s gaming industries, no doubt due to the similarities in culture, geographical proximity, and parallel progress. China, as many in the tech industry believe, is anywhere from three to seven years ahead of Vietnam. Therefore, many look to China’s growth as a predictor for Vietnam’s. Consequently, many games do end up becoming successful in Vietnam. This includes the famed VLTK, and others like Mu OnlineGunbound, and TS Online. Thus, in a lot of ways, China has a corner (or one corner) of the Vietnamese gaming market where Japanese, South Korea, and American studios cannot make headway.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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