Nguyễn Tuấn Anh, CEO of Grab Financial Group Việt Nam, talks about strategies to help start-ups expand their markets at a recent event in HCM City. Photo Thành Nguyễn.
HCM CITY — Overcoming human resources problems, understanding local cultures and finding reliable partners are needed for Vietnamese start-ups to “go global,” the CEO of Grab Financial Group Việt Nam has said.
Speaking at a recent boot camp, a start-up training programme organised by VnExpress.net, Nguyễn Tuấn Anh said reaching out to the world was not optional but imperative for a start-up to succeed.
“You may not go global right away, but you must have a vision to do it in the next five to 10 years.
“Vietnamese start-ups must conquer the global playground to increase the value, revenue and profit.”
Anh was one of the first employees of the giant ride-hailing service when it entered the Vietnamese market in 2014 on the heels of its success in four other Southeast Asian countries, Malaysia, Singapore, the Philippines, and Thailand.
To succeed start-ups could first start their business in a market with which they were familiar to master customers’ habits and behaviours, but later needed to expand markets to other countries.
Going global also helped improve the company’s capacity and increase salaries for existing personnel.
Setting a goal to go global also demonstrated the potential of the start-up to attract more investment.
The biggest challenge was finding a right partner. Start-ups that wanted to be successful in a new country needed to find a reliable partner.
When a problem arose, a start-up needed to know what was going on and see if they really understood the local market.
For instance, when Grab entered Việt Nam, it had accepted cash payment for taxi services, and car and motorbike services while its main competitor had only been available to users paying by credit or debit card.
Accepting cash payments was a necessary local adjustment in emerging markets. Making the decision to accept cash payments had been “one of the important realisations that Grab came to in Southeast Asia.”
Grab’s success in the Vietnamese market was owed to three factors.
First, when entering HCM City and Hà Nội, it had already had experience in four markets.
Second, it had been willing to deploy new services to meet customers’ needs. For example, it had taken only a month to launch GrabBike, an app-based motorbike taxi service, due to the high demand at the time.
“We did not think too much. We just saw the potential for investment and we did it. The market responded very well.”
Third, Grab had entered Việt Nam at the right time when its technology infrastructure had begun to boom.
“The increase in the number of start-ups has been made possible with a good telecommunications system, the Internet, 4G, and improvement in technology and education, among others.”
Besides, the habit of using smart devices was increasing and there was enthusiasm for new technologies among Vietnamese, which too contributed to the success of Grab.
Grab, which has an estimated valuation of US$14 billion, has become a one-stop app providing services and solutions for daily needs from transportation and food to entertainment and seamless cashless payment.
It has also partnered with fintech firm Moca to provide cashless payment via e-wallet. Users in Việt Nam can now pay bills, book hotels, order food, and send parcels from the Grab app.
Experts said Vietnamese start-ups are struggling with internationalisation in their local eco-system. In Việt Nam, entrepreneurs work in a very tough regulatory environment, with few international mentors to support them, they lamented.
But despite the challenges, it is totally possible to build a successful global start-up in Việt Nam, they said.
The eco-system in Việt Nam is still young but has entered the globalisation stage. The country has more than 3,000 start-ups with a third being based on technology and the rest on consumers.
Though tech companies sprouted in Việt Nam in 2000, it was not until 2016 that the country’s start-up eco-system became complete.
In 2017 around 92 start-ups received investments worth $291 million. The most attractive industries for investment have been e-commerce followed by food technology and fintech.
“In the next 10 years Grab’s vision will be the same, focusing on finding the most effective solutions to improve the quality of life of people through technology,” Anh said. — VNS