VietNamNet Bridge – Vietnam is now witnessing the boom of Internet-based digital services, since investors can see the big potentials of the market. However, experts say the market is still like a bear garden due to the lack of a perfect legal framework.

The business fields that can bring fat money…

Vietnam now has 31 million Internet users and six million computers with Internet connection. The annual report “State of the News media” presented at the international workshop on digital technology and content some days ago showed that Vietnam ranks the 18th in the world in the number of Internet users.

This explains why digital technology services, including e-books, digital marketing, e-commerce, games, have become a lucrative business

Vietnam is the country with the fastest growth rate in the number of mobile phones. It now has 130 million mobile subscribers, or 145 mobile phones per 100 people. Of this, 19 million subscribers use Internet Mobile services, and 16 percent use smart phones.

88 percent of Internet users access to Internet from their home, 28 percent from their offices, 26 percent from public Internet access points, and 30 percent from smart phones or tablets.

It is estimated that by the end of 2012, Vietnam would have 10 million mobile phone subscribers using 3G services.

According to the Ministry of Information and Communication, Vietnam now has 62 online newspapers and journals, over 300 news websites run by agencies or organizations, 1024 general news websites. Social networks have also been developing rapidly with 227 social networks registered.

Vietnamese people now consider e-commerce as a part of their shopping lives. Up to 80 percent of consumers seek the information about products, especially electronics and high technology ones, on Internet before they place orders.

In such conditions, the digital media marketing market has become a promising land for investors. Meanwhile, in the eyes of businessmen, this is a low cost ad channel which can bring high efficiency.

At present, the ads on TV still accounted for 75 percent of the enterprises’ total expenses on marketing and ads (nearly 10 trillion dong), the ads on newsprint 20 percent and ads on Internet just 0.5 percent. However, experts still have high hope on the market segment development.

Online game services have also been developing rapidly. There have been 18 million accounts registered to use games, social network, music and news at VNG Company, which accounts for 60 percent of Internet users in Vietnam.

… and high risks

Le Doan Hop, Chair of the Vietnam Digital Media Association, former Minister of Information and Communication, has pointed out that a lot of problems still exist.

First, state management agencies remain puzzled in managing content on Internet.

Second, the unfair playing field for telecommunication network operators and content service providers. The latter keeps complaining that an unreasonable share profit mechanism has been existing, under which, they can get a small part of the cake. Meanwhile, network operators, who only provide infrastructure items, can obtain the bigger part.

Le Hong Minh, General Director of VNG said the biggest rival to domestic service providers are not the other domestic e-commerce firms, but Google.

Minh said most consumers, who want to seek information about goods, now have the habit of searching on Google. In some other countries in the world, big e-commerce firms prohibit Google to search information on their websites, but the websites in Vietnam cannot do that.

Minh went on to say that while the Internet is a very open environment, in Vietnam, the market still has not been protected by the laws.

DNSG