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Viet Dot-Com

E-business in Vietnam: all marketing, zero commerce.

This holiday season, I decided to really get away. It wasn’t until after I got back I learned just how far, ideologically, I’d traveled. Reporters Without Borders (RWB) named Vietnam, where I spent the holidays, one of 20 countries that are “Enemies of the Internet.”

You’d think that label, not to mention drastic shortcomings in infrastructure, technology, penetration, and money and sanctions by legal systems and the state, would put the kibosh on e-business in Vietnam. Turns out the obstacles aren’t insurmountable. The Vietnamese look to the U.S. and Europe for online models. We might do well looking to them for lessons on coping and even flourishing in tough times.

Vietnam earned RWB’s dubious distinction because anyone wanting an online account must apply for a permit from the Ministry of Interior and access the Net via a state-owned provider. If the application is approved, a $30 user fee is levied. That’s not an insignificant sum in a country with an average per-capita annual income of $300.

Dissidents who have criticized the government online are in prison. Police have cancelled journalists’ accounts. Sites outside the country are filtered and firewalled. Access to Vietnamese organizations’ sites abroad, human rights organizations, and AOL is blocked. A lone international gateway connects Vietnam to the Internet outside its borders. Bandwidth limitations and filtering mean it can literally take 20 minutes to access an outside domain — if it’s not firewalled.

You get the picture. The Internet has hardly taken Vietnam by storm. But it’s very much there. Even small cities are studded with Internet cafés. Despite very real obstacles, entrepreneurial businesses are working to leverage the Web as a marketing vehicle. Infrastructure issues, particularly the fact there’s no online payment system, make e-commerce impossible. Marketing is the engine of Vietnam’s Web. From what I saw, they’re doing a bang-up job.

A few weeks before my trip, ClickZ received an email from reader Ta Minh Cuong, a Ho Chi Minh City marcomm executive. Cuong was seeking information and resources on e-marketing and e-commerce just as this editor was researching her vacation (the Web can be so cool!). Naturally, we hooked up.

Cuong took me on a tour of his workplace, Cao Thang Eye Hospital, a private clinic in a beautifully restored villa. It caters to affluent, private patients (and does charitable work). Over dinner, Cuong picked my brains for online marketing ideas while I gamely tried to live up to the “American expert” role he’d cast me in, countering with my own questions about online marketing in his country.

Cuong complained a dearth of local IT talent hinders site development. I think his site looks great (“mat” means “eye” — good domain name). Every component of a marketing program I came up with, he’d already implemented: user registration, email updates, education outreach to increase the comfort and knowledge levels of prospective patients. A PR campaign encourages newspapers and magazines to write about eye health, with links to the hospital’s site. Cuong recently launched a print campaign. Over 5 percent of the hospital’s marketing budget is dedicated to online, tipping the upper reaches of a comparable budget here.

With only about 1 million Web users in a country of 80 million, I questioned his level of commitment to online marketing. Cuong explained patients with the means to afford a private clinic tend to be employed in offices with Web connections. He’d done the segmenting and demographic homework. Future plans include a campaign to introduce LASIK surgery locally and eventually to attract patients from Western countries seeking eye care at more affordable prices than at home.

Cuong was looking for a Western guru. Surely a marketer from the U.S., familiar with e-commerce, would have knowledge to share. What I saw in Cuong was a fellow online marketer who had leapfrogged past the commerce mindset: the Internet as a transactional medium. The sophistication with which he’s marketing services, educating, and branding is impressive. He feels bereft without an IT staff and is plagued by the nagging sense he’s missing something we’re doing over here.

Granted, excruciatingly slow dial-up access limits the sites he can surf for inspiration. Despite Cuong’s insecurities, I was chastened to see how much real innovation has emerged in this truly nascent industry — Vietnam wasn’t online at all until 1997. Cuong’s efforts are good because they’re built on solid ideas and strategy, whatever the resources. Haven’t we all lacked budget, time, and staff recently?

Cao Thang Hospital isn’t an isolated case. Companies such as Hanoi-based Thanh Ha Silk, though unable to conduct online transactions with customers, use the Web to promote merchandise, make contacts, take orders, and provide information. Bilingual Vietnam eBusiness is a well-conceived business-to-business (B2B) directory and portal. These Vietnamese businesses understand the Internet is a tool that can be employed to serve their own unique needs (a concept too frequently ignored in the copycat West). It’s a tiny industry, but a model of innovation. Businesses are working with whatever resources are available, not fretting about limitations.

I visited more than a few of Vietnam’s estimated 4,000 Internet cafés (no license is required to go online that way — the country has far more Internet users than registered Internet accounts). Cafés are packed with young people averaging in age between 14 and 24. Phan An Sa, deputy chief inspector at the Ministry of Culture and Information, told the BBC 70 percent of Vietnam’s Internet users log on to chat, 10 percent to game, and 10 percent to send and receive email. Only the remaining 10 percent surf, estimates the ministry.

If Vietnam’s government can overcome the schizophrenia of wanting to foster economic growth on one hand and control and monitor information on the other, a lot more of those kids will surf. A government blueprint for laying the foundations of an e-commerce infrastructure has been drafted.

Meanwhile, Vietnam’s educated, literate students and entrepreneurial businesses are embracing online, even if schools, institutions, and the government aren’t. They’re using what they have and making it work for their needs.

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