Or how to chase Vietnam mobile user

Hanoi, August 2013

Pocket guide for Vietnam mobile market researched by APPOTA

o Information in this report is quoted and complied from various sources.

o Comments are from editors’ assessment.

o We are welcome feedbacks and comments from you.

Contact us: biz@appota.com

Many thanks and Best Regards!

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Pocket guide for Vietnam mobile market

2

Mobile is a booming industry in Vietnam

State of this second highest growth rate in

smartphone market

8 things you need to know to enter

Vietnamese market

Finding your Vietnam partners

HIGHLIGHT

3

How do you think about Vietnam

?

4

Yes! But also The second place in the top increasing rate

smartphone market in the world

5

WELCOME TO VIETNAM

The most potential mobile market in SEA

6

MARKET OVERVIEW

7

Netizen: 31,000,000 Mobile netizen: 34,000,000

Mobile phones subscribers : 146,000,000 Internet phone: 18,000,000

3G subscribers : 19,300,000 iOS & Android phones: 13,000,000

Telecom (mobilephone)

service ARPU: $ 4.1

89,000,000 Population 29,000,0000 Urban

31,000,000 from 15 - 35 years old $1,300 GDP per capita 51% male, 49% female

GENERAL INFO

8

Hight-competitive telecom market

41%

31%

18%

10%

Vietttel

Vina

Mobi

Others

4/5 networks belong to Government. 96% market share is taken by the big 3: Viettel, Mobifone,

Vinaphone. Both Mobifone & Vinaphone belong to VNPT Corporation. Viettel is the number 1 for users quantity but Mobifone has the highest ARPU and large

proportion of users in big urban. 2 telcos had been disappeared, 3 telcos had been suspended the permission from 2010.

As the result of the war of telcos, the mobile price is very cheap & the revenue traditional service who takes at least 50 %. 84% users with pre-paid plan.

So, Operators have to maintain or increase ARPU by introducing more new value-added services & take more from carrier billing fee

= $ 2.4

For unlimited 3G service

= $ 0.1

For 1 minutes calling service

= $ 0.01

1 message

MOBILE LANDSCAPE

9

0

5

10

15

20

25

30

35

40

45

SMS Scratch

card

Internet

banking

Virtual

cash

Fee

%

Online payment wait for booming

When e-commerce is booming in Vietnam (from $300 million in 2011 to an estimated $2.5 billion by the end of 2015), the online

payments market has been slow due to the popularity of COD (cash-on-delivery). While young people are more willing to spend money online, they do not have much purchasing power yet and the older

generation is not willing to do so.

Despite these barriers, there are more and more service providers emerging in Vietnam

which may slowly change the trend by giving consumers a good reason to pay online. More convenient, co-existent with cash & good discount are 3 big points that online

payment attracts more users.

57M ATM cards

64% penetration

3.6M credit cards

4% penetration

8M virtual cash accounts

9% penetration Transaction fee of online payment

MOBILE LANDSCAPE

10

The rising of Android phone

iPhone is the symbol for smartphones in Vietnam during 2009-2011 and remain the 1st position on market. Apple products are always honor and a symbol of luxury, stylish. Only when the low-end Android line configuration was good and cheap alternative series phone java phones Until now, the iPhone is still the leading smartphone brands with approximately 40% market share, Android with 30 brands go second for 60% is led by Samsung, LG, Q-Mobile, HKphone.

The level of pay is higher than iPhone users who use Android but the situation is improving a lot, some multi-platform product sales Android recently overtook iOS users. It is expected that Android has a very high growth rate in the third division being: high, intermediate, low, and will account for about 80% market share in 2 years

MOBILE LANDSCAPE

11

Mobile advertising - the rising star

Digital advertising (including mobile advertising)

reached only 5% of advertising budget in Vietnam in

2012 (1 Billion USD) but mobile advertising is growing

fast in 2013.

On average, mobile web users in Vietnam consume

4.5 hours of media daily, of which 35% represent

mobile devices, mobile advertising is now a trending

for mobile service also FMCG.

SMS is the first type of mobile advertising & now the

most popular with million messages delivered to

customers each & every day.

Ads CTR rate is very high, appropriate 0,1% -0,5%.

Price of CPC 2,000 – 4,000 VND , price of CPM

from 8,000 – 40,000 VND. Advertising Rates are

generally higher compared to the world in the

traditional form.

The discount rate is about 30% if you buy a large

quantity from Vietnamese partners

MOBILE LANDSCAPE

Type Average Price

CPC 800 – 4,000 VND = 0.04 - 0.2 USD

CPM 8,000 - 45,000 VND = 0.4 - 2.1 USD

CPI 10,000 – 20,000 VND = 0.5 - 1 USD

ECPI 15,000 – 30,000 VND = 0.7 – 1.4 USD

CPA From 40,000 VND = From 1.9 USD

CTR 0.02-0.05%

Conversion

rate

~ 3%

Site Cate

24h.com.vn Press

AppStore.Vn Marketplace

Baomoi.com Press

Dantri.com.vn Press

Soha.vn Portal

VnExpress.net Press

Vietnamnet.vn Press

Zing.vn Portal

Top site by traffic (alphabetical order) Average Price for Mobile ads 12

Fast growing market

The smartphone increased 50% last year while the revenue from online mobile game had an explosive growth. Now, we have 15.000+ apps for smartphone, 100+ online mobile games in the market. The revenue is about 70 million USD for the both online & offline mobile game.

The falling of high-class smartphone price will propel the growth in near future. The eco-system for business has established many years ago could help foreign developers to entering this market.

Telecom

revenue

VAS

revenue

Online

game

revenue

MOBILE LANDSCAPE

Online game mobile

Next year

13

High consumer level

Vietnamese users have a higher app consumption than US users. Games are the most favorite mobile content. The pornography content is very hot with java phone but not with smartphones

10%

7%

9%

10%

16%

35%

14%

App consumer

Over 30

21-30

16-20

10-15

6-10

1-5

None

10%

7%

30%

10%

16%

14%

13%

App consumer

Over 30

21-30

16-20

10-15

6-10

1-5

None

US Vietnam

How many apps you downloaded the last 30 days

APP BEHAVIOR

14

User is really active

Browsing the app store is the most common method for users to find out new apps. 42% of users use the recommendations from friends and families to find new apps. Android users are more likely to look up reviews for apps on mobile websites.

0 5 10 15 20 25 30 35 40 45 50

Appstores

Search engine

Social network

Friend recommend

PC ads

Mobile ads

Others

Android

iOS

%

How Vietnamese users discover the new app?

APP BEHAVIOR

15

War of OTTs app

The first & No.1 chat app in market. More than 3.5M users

Favorite by Korean-biz fans & young smartphone users with many casual games

Favorite by young smartphone users with cool

sticker & good brand awareness

Vietnamese chat app by giant internet company VNG. Promoting by a lot of

Vietnamese celebrities

The war off OTTs began in late of 2012 with the media covering of Line, Kakao talk & Zalo. These 3

apps have paid million $ to become the No.1 in the market. Line & Kakao & Zalo has lauched their own GMO as Line Pop, Kakao Tiny Pang. In near future, these app will become the important channel to promote a GMO.

APP BEHAVIOR

16

GMO – the new ocean

Since the slowdown of the PC gaming market,

along with the development of smartphone

market, GMO does a boom quickly. With over

100 products in Vietnam market and will be

around 150 products in the end of 2013.

Not only publisher specializing in mobile game

as MeCorp or TeaMobi, all the giants were

involved in the market. Currently, the top

game sales are still gamble game but in near

future, the rate will be changed rapidly.

The competition is becoming more intense, but

GMO is still a new market and with many

potential users. The fee for releashing a GMO is

much smaller than a PC game, so many

publishers could join the market.

Users also prefer the popular game on the PC

platform, especially classic games such as MU

Online, JX Online, Gunbound, TS Online,

WarFlow… The average ARPU ~ $ 2 / month.

Most of the game has a life cycle ~ 6 months

Fun facts about Vietnamese gamer

Hard trainer: GMO & PC games gamer is

similar, the ability to draft a world champion

(lots of world game servers was occupied

between the top position by Vietnamese).

Girl posing: Gamers like posing as a girl in

game, so they could receive many helps from

other players.

PK ( player kill) the weakers: Gamers often like

PK the weaker to show their strengths.

Complains: Gamers always complain about

the game, the publisher & they threat to leave

but no, they still playing game & joining in all

events.

APP BEHAVIOR

17

HOW TO WIN IN VIETNAM MOBILE MARKET

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In other markets, iTunes and Google Play usually takes majority market share and bringing

products to market first is fairly simple.

However, in Vietnam market it is more complicated, depending on the period time by 60-90% iOS users jailbreak their devices and use regularly supply application resource other than iTunes. For Android users, although Google Play is still the main channel to search for and download

applications, the users also have many different options with the dozens of downloading stores and the internet communities provide file setting in free way.

The complexity and fragmentation of the smartphone market in Vietnam bring many difficulties but also create opportunities for developers. When downloading stores has cooperation policies which are flexible, they are ready to deliver your product to each user by different ways of

advertising that can not be done with iTunes and Google Play.

Introduction VIETNAM MARKET ENTRY

19

Challenges in publishing app in Vietnam

Store

Publisher

VIETNAM MARKET ENTRY

Payment provider

Advertiser Community

20

Freemium is a hot trending

iAP app gain 10X more than PPD app, especially on Android. Paid app are easily pirated.

Like many other markets, Vietnam application market for smartphone is not favored for paying to download the application.

According to statistics published in 06/2012 of Appota, only 3-5% of the revenue from our applications by distributing the application from PPD and this ratio tends to decrease.

We strongly recommend you freemium model also a small game.

FOR DEVELOPER

21

Integrate full payment tool

Beside the international payment card, the other payment forms are very popular in Vietnam: SMS, scratch card, e-wallet, internet banking, multi card. As the most common form but SMS has the highest fee level (50-70% value), other forms have fee level ranges from 5-15% of the value. Currently, many products tend to collect money in the other form than SMS to ensure the

profitability of the developers but SMS still is your form of payment which you should be had due to the flexibility and popularity of its.

We strongly recommend you to use SMS for small transaction, scratch card for big transaction. Use at least 2 gateways to ensure that your products run probably.

FOR DEVELOPER

22

Social network integration is important

Facebook is still the largest social network and most frequently used, although other social networks have many users, but the cohesion between members sporadic. So your application when released in Vietnam just add Facebook API is enough.

Building community for players (fanpage, forums) need to do immediately in the process of

preparing the eye. Chat to exchange information about game is a popular habit, it's best to create a user community to exchange, which will help you to easily control the information later.

We strongly recommend you to integrate Facebook to app & ennable open ID.

FOR DEVELOPER

23

Need for localization

Localization is the most essential with games have a lot of scripts. Although the majority of gamers can use English in basic way, playing games with this language or even Vietnamese button caused great sympathy. It does not take too much time and cost is cheap.

We strongly recommend you to re-script your game & add some specific contents for

Vietnamese users.

Ordinary Emoticon Hot girl Vietnam Emoticon

FOR DEVELOPER

24

Right distribution channel

The distribution channel fragmentation makes the delivery one applications/ games in Vietnam market is more complex, but also create opportunities for developers when they have chance to promote to users from the download stores that you can not accomplish on iTunes or Google Play. AppStore.Vn is now the largest community, with over 8.4 million users in which is more than 3.5 million active users every month, which was considered the largest

download app store for iOS and the second largest for Android in Vietnam.

We strongly recommend you to focus on 3rd marketplaces like AppStoreVn, Vimarket…

FOR PUBLISHER

25

Vietnam is not China

Influenced by Chinese culture, because of many historical reasons, however, the modern culture of Vietnam suffers from many other streams, especially the United States. Unable to apply the rules, content from China to Vietnam users.

Plese remind that, the “taste” of Vietnamese users are not similar to Chinese players or American players

We strongly recommend you ask an expert about the differences between Vietnamese culture & Chinese culture, make market research as deep as you can.

FOR PUBLISHER

26

Corporate with wap network

The small wap-site system is an important advertising channel for low-level machines which run Android, these are users who still keep habit from using java in previous time.

There are thousand wap-sites with simple content who attract milion users every day.You could contact with some wapmaster networks to push your promotion to all of their users.

We strongly recommend you to try corporate with many wap-networks if your products can run

on low-end device.

FOR PUBLISHER

27

Try CPA advertising

Ads via SMS is very popular with the game of gambling form, online games. However, this method

likely causes the feeling from customers and suffered the restriction from the government.

CPM remains the second preferred form with domestic enterprises while foreign companies prefer eCPI and CPA. However, forms of CPA is relatively new and the local partners almost have not supported yet. Some partners support the CPA : Golden Sun, Appota…

We strongly recommend you to try CPA model for easier tracking & measuring the result.

CPC CPM CPI CPA

FOR ADVERTISER

28

FINDING PARTNER

29

Joining the start-up community is an easy way to finding market info & getting new partners. Some common communities are: Mobile Day, Mobile Monday, bar camp, start-up weekend.

Check carefully with the payment gateway about the time you could receive all the money.

The co-publishing & re-publishing are very popular, so you should help your partner to make multiple version of your product.

Partner Guide VIETNAM PARTNER

30

Publisher Partner

Appota – The first smartphone content delivery, the exclusive partner of AppStoreVn. Appota in charged of full pack service for games/apps publish in Vietnam.

Kichhoat & Mwork are 2 companies who have wap-network with million java low-end users.

VTC Online: One of the top game publisher on PC, VTC started their mobile game business from 2009.

Soha game: From VCCorp - a very big internet company in Vietnam. Sohagme has a big community from VCC’s e-commerce & entertainment site.

VIETNAM PARTNER

31

Advertising Partner

Dentsu – Worldwide advertising agency, one of the first international company who tries mobile marketing in Vietnam.

Goldsun Focus Media: a member of Goldsun Group who dominates the out-door ads. This company has a big inventory of smartphone users from prestige online press like Tuoitre, Thanhnien.

VseV: International company who has a lot of inventory from free Android app in Vietnam.

InMobi : Top mobile advertiser in the world.

VIETNAM PARTNER

32

Media Partner

Action.vn – Exclusive ICT news from Vietnam. Action is also a consultant for whom want to join the market

Topica education: The company who brings the “founder institute” programme in Vietnam

IDG venture: Biggest venture-funds in Vietnam who has a large porfolio from hundred company in tech-industry

AiTi Aptech : One of the best education centre for mobile industry, also an professional organizer for severals events as Mobile Monday, Mobile day…

VIETNAM PARTNER

33

Please email us at: biz@appota.com to get full version

Feel free to leave your comments and feedbacks in this post

Deliver Mobile Content

Fastest & Most effective

34

THANK YOU

International research group

Hanoi, Aug 2013