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Online


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Unformatted text preview: Vietnam
Online
 Adver/sing
Industry:
 A
Quick
Overview
 26‐Nov
2008
 Bryan
Pelz
 Vietnam
Online
 Troubled
*mes
 Vietnam:
Basic
Stats
 
Annual
data


 
2007(a)


 
Historical
averages
(%)


 
2003‐07

 
Population
(m)


 85.9
 
Population
growth


 1.3
 
GDP
(US$
bn;
market
exchange
rate)


 
70.7


 
Real
GDP
growth


 8.1
 
GDP
(US$
bn;
purchasing
power
parity)


 221.6
 
Real
domestic
demand
growth


 8.4
 
Inflation


 7.1
 
GDP
per
head
(US$;
market
exchange
rate)


 
GDP
per
head
(US$;
purchasing
power
parity)


 
Exchange
rate
(av)
D:US$


 Real
GDP
growth
 Industrial
production
growth
 Gross
agricultural
production
growth
 Consumer
price
inflation
(av)
 Consumer
price
inflation
(year‐end)
 Lending
rate
 Source: Economist Country Briefing Jun-2008 823
 2,579
 
16,179


 
Current‐account
balance
(%
of
GDP)


 ‐3.6
 
FDI
inflows
(%
of
GDP)


 4.9
 2006
 8.2
 17
 3.4
 7.4
 6.6
 11.2
 2007
 8.5
 17.3
 3.4
 8.3
 12.6
 11.4
 2008c
 6.9
 15.9
 3.5
 23.3
 21.9
 20.8
 2009c
 7.7
 16.5
 3
 12
 8.9
 17.3
 Recent
news
 •  AC
Nielsen:
Consumer
confidence
 down
in
Vietnam
 HANOI,
Nov.
10
—
An
AC
Nielsen
 survey
has
shown
that
Vietnamese
 consumer
confidence
con/nued
to
 drop
in
the
second
half
of
this
year
 due
to
high
infla/on
and
slower
 economic
growth,
Vietnam
 Investment
Review
reported
on
 Monday.
In
the
first
10
months
this
 year,
Vietnam's
infla/on
rose
23.15
 percent
over
the
same
period
last
 year.
The
economy
rose
by
6.52
 percent
in
the
first
nine
months
year‐ on‐year,
lower
than
the
7.4
percent
 growth
for
the
first
quarter,
official
 sta/s/cs
showed.

 Source: AC Nielsen, VietnamNet •  Vietnam
Net:
October
2008
vs
 October
2007
Consumer
Price
 Index
 Tech
company
layoffs
announced
in
the
last
5
weeks
 Company


 Sun
Microsystems

 Applied
Materials

 Wired.com

 Six
Apart

 Tucows

 Circuit
City

 BitTorrent

 Insight

 Honeywell

 Zappos

 LinkedIn

 AMD

 Nokia

 THQ

 Motorola

 Electronic
Arts

 Xerox

 Source: CNet Date


 11/14/08
 11/12/08
 11/11/08
 11/11/08
 11/11/08
 11/10/08
 11/10/08
 11/10/08
 11/7/08
 11/6/08
 11/5/08
 11/5/08
 11/4/08
 11/3/08
 10/30/08
 10/30/08
 10/23/08
 How
many


 6,000/15‐18%

 1,800/12%

 3
of
28

 8%
 15%
 20%
 50%
 240,
4%

 700
 8%
 36,
10%

 500,
3%

 600
 4‐5
studios

 3,000
 600
 3,000
 Company


 Xerox

 Avid
Technology

 Nokia

 Tektronix

 Spot
Runner

 Circuit
City

 THQ

 Break.com

 Eons

 Dell

 SanDisk

 ManiaTV

 iMeem

 HP

 Yahoo

 Sony
Ericsson

 eBay

 Date


 10/23/08
 10/23/08
 11/4/08
 11/3/08
 11/3/08
 11/3/08
 11/3/08
 10/23/08
 10/23/08
 10/22/08
 10/22/08
 10/22/08
 10/22/08
 10/22/08
 10/21/08
 10/17/08
 10/6/08
 How
many


 3,000
 500
 600
 150
 115,
<
30%

 17%
 4‐5
studios

 11
of
80

 8
of
about
33

 8,900
 TBA

 20
of
70

 25%
of
80

 24,600
over
three
years

 10%
of
~14,300

 2,000
globally

 1,000
 More
recent
doom
&
gloom
 •  VinaSME
Urges
a
Rescue
of
SMEs
 Vietnam
Net
–
Nov
14,
2008
 VinaSME
has
released
the
report
that
said
20%
of
SMEs
are
currently
on
the
verge
 of
bankruptcy.
These
enterprises
have
narrowed
or
stopped
produc/on,
while
the
 business
of
some
enterprises
has
come
to
a
stands/ll.
Vinasme’s
sta/s/cs
showed
 that
95%
of
200,000
businesses
that
pay
taxes
to
the
state
are
SMEs.
The
SMEs
 make
up
40%
of
GDP
and
put
out
30‐40%
of
export
and
consumer
products
for
the
 country.
Moreover,
SMEs
use
up
to
50%
of
the
total
laborers
used
by
enterprises
 throughout
the
country.
SMEs
contribute
17.6%
to
the
state
budget.
 Source: Vietnam Net 2009:
What
we
might
see
 •  •  •  •  •  •  As
global
situa/on
worsens,
local
economy
will
face
more
challenges
 Infla/on
will
subside
 Housing
prices
will
con/nue
decline;
construc/on
will
stall
 Foreign
investment
will
contract
 Exports
will
slow
 Businesses
and
consumers
will
become
more
conserva/ve
 Bryan’s guesses. Your results may vary. Time
to
get
innova/ve
 Source: VN Express Vietnam
Online
 Huge
poten*al,
 despite
the
environment
 South
 East

 Asia
 Vietnam
Internet
Growth
 100%
 100,000,000
 90%
 80%
 60%
 40%
 80,000,000
 >Mobile
 Internet
 70%
 50%
 90,000,000
 >Web
Content
 70,000,000
 60,000,000
 Online
Games
 50,000,000
 Broadband
 40,000,000
 30%
 30,000,000
 20%
 20,000,000
 10%
 10,000,000
 0%
 VinaGame projections ‐
 Population
 Internet
Users
 Growth
 Top
20
Internet
Countries
2007
 Japan
 Internet
Penetra/on
 Korea
 Vietnam
 China
 India
 50M GDP
/
Capita
 USA
 Vietnam
&
developing
countries
 Internet
Penetra/on
 Vietnam
2009?
 Vietnam
2007
 Vietnam
2005
 China
2007
 India
2007
 50M GDP
/
Capita
 Vietnam:
Home
Internet
access
is
growing
 Urban
v
Rural
–
2008
(%)
 Urban
Home
Internet
 Penetration
(%)
 40
 34
 35
 30
 54
 33
 Mobile
Phone
 Penetration
 25
 84
 21
 Rural
 20
 Home
Internet
 Penetration
 15
 8
 10
 5
 Surfed
Internet
in
 Past
Wk
 1
 Urban
 37
 9
 Home
PC
 Penetration
 3
 9
 51
 0
 1999
 2001
 2004
 Source: TNS Consumer Trends 2008 2006
 2008
 0
 20
 40
 60
 80
100
 Vietnam
Internet
Users
–
by
Age
 2006 
 2014 
 16m
 16
 14
 12
 47m
 16
 14
 12
 8
 8
 6
 6
 4
 4
 2
 2
 0
 0
 Internet
Users
 VinaGame projections Popula/on
 0‐4
 5‐9
 10‐14
 15‐17
 18‐19
 20‐24
 25‐29
 30‐34
 35‐39
 40‐44
 45‐49
 50‐54
 55‐59
 10
 0‐4
 5‐9
 10‐14
 15‐17
 18‐19
 20‐24
 25‐29
 30‐34
 35‐39
 40‐44
 45‐49
 50‐54
 55‐59
 10
 Internet
Users
 Popula/on
 Vietnam
Online
 The
good,
the
bad,
and
the
ugly
 Online
ad
growth
in
US
grinding
to
a
halt
(US$M)
 $9,000
 14.0%
 $8,000
 12.0%
 $7,000
 10.0%
 $6,000
 8.0%
 $5,000
 AOL
 Microsoft
 $4,000
 6.0%
 Yahoo
 Google
 Growth
(%)
 $3,000
 4.0%
 $2,000
 2.0%
 $1,000
 1%
 $0
 Q3‐2007
 Source: TechCrunch Q4‐2007
 Q1‐2008
 Q2‐2008
 Q3‐2008
 0.0%
 Vietnam
Online
Adver/sing
Market
($M)
 10%
 80
 9%
 70
 8%
 60
 7%
 6%
 50
 5%
 40
 4%
 30
 3%
 •  We
had
expect
the
online
 ad
market
to
reach
$75m
by
 2014
 •  We
had
expected
online
 would
exceed
9%
of
total
 ATL
adver/sing
(on+off)
 20
 2%
 Online
Advertising
 Internet
Users
 %
of
ATLAdvertising
 VinaGame projections 2014E
 2013E
 2012E
 2011E
 2010E
 0
 2009E
 0%
 2008E
 10
 2007E
 1%
 •  PROBLEM:
adver/sing
will
 ramp
at
a
slower
rate
due
to
 troubled
economy
 Evolu/on
of
VN
Ad
Market:
2009
vs
2014
 •  We
had
expected
increase
 in
paid
search
 80
 70
 –  Paid
search
would
reach
> $35m
 –  Paid
search
would
reach
 0.036%
of
GDP
in
2014,
 eventually
exceeding
0.10%
in
 long‐term
 60
 50
 40
 30
 20
 •  PROBLEM:
adver/sing
will
 ramp
at
a
slower
rate
than
 an/cipated
 10
 0
 2009E
 Display
 VinaGame projections 2014E
 Paid
Search
 Some
bright
news
from
China
 •  CCTV
prime
/me
auc/on
 –  strong
ad
spending
by
domes/c
Chinese
firms,
up
15%
YoY
 •  Online
ad
spending
may
s/ll
grow,
es/mates
are
~20%
 –  Online
media
demographics
are
complementary
to
TV’s,
as
most
youth
 spend
more
/me
on
online
media
than
TV
 –  Online
media
rate
card
will
be
raised
auer
the
raising
of
CCTVs
rate
 cards
 –  Due
to
economic
slowdown,
people
will
spend
more
/me
at
home
 and,
thus,
both
Internet
and
TV
will
benefit.
 •  THE
PROBLEM
IS:
China
is
a
more
mature
market
than
VN
 –  Twice
the
GDP/Capita
 –  Large
base
of
SMEs
adver/sing
already
 Vietnam
Online
 It’s
up
to
us
to
make
a
difference
 The
market
situa/on
here
 •  More
people
spend
*me
online
in
a
troubled
 economy
 –  Cost‐effec/ve
form
of
diversion
 •  Online
becomes
more
important
to
young
 people
 –  This
country
is
full
of
early
adopters
 –  Using
the
Internet
in
increasingly
diverse
ways
 Business
environment
 •  In
hard
*mes,
spending
should
shiH
from
 retro
media
to
online
;‐)
 –  The
ROI
for
online
is
quan/fiable
 –  Retro
media
is
only
indirectly
quan/fiable
 •  No
shiH
in
VN
(yet).
Why?
 –  Companies
don’t
pay
enough
aven/on
to
the
 numbers
 –  Our
ecosystem
is
incomplete
(does
anyone
verify
 our
numbers?)
 –  No
serious
effort
to
evangelize
SMEs
 What
we
should
do
 •  Shiu
spending
to
online
 •  Educate
the
market
 •  Cooperate
to
develop
the
ecosystem
 •  Invest
in
evangelizing
SMEs
 Q&A
 Contact info: email: bryan@vinagame.com.vn skype/twitter/yahoo/gtalk/yahoo/tumblr: bryanpelz ...
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This note was uploaded on 09/15/2010 for the course STAFF 00069 taught by Professor Thah during the Summer '10 term at Alfaisal University.

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