PeaceSoft targets to be e-commerce hub for Vietnam
By Karamjit Singh May 2, 2013
- Aims to get rich by helping others get rich especially SMEs
- Sees MOL deal as starting point for locals to get familiar with crossborder e-commerce
NGUYEN Hoa Binh, the chief executive officer of the PeaceSoft group, believes in the unifying power of a motto. For many years, his motto was “Everything is Everywhere for Everybody Every Time.”
It’s a literal translation from Vietnamese and was clearly inspired by the Internet, nascent though it was in the country in 2001 when Binh came up with it.
Fast forward to 2013 and the motto has changed, along with the way in which Binh wants to make money. While for a long time doing business was just a means for him to get rich, today his dream and motto is to “Build the Next Generation Ecosystem in Vietnam.”
“Specifically, I want to help small and medium enterprises (SMEs) in Vietnam with all their needs to run an online business,” he tells Digital News Asia (DNA).
His thinking is that by helping Vietnamese SMEs tap into the potential of the Internet, he will help them tap a new revenue stream and as they get more successful, they will need more services from their suppliers and thus everyone will benefit from the increased economic activity.
“I will get rich by helping others get rich,” is how he sums it up.
Strategically, he wants to be the hub for all things to do with e-commerce in Vietnam.
He is on the way there. Still only 32 years old, Binh (pic) already runs Vietnam’s leading e-commerce group with investments received from IDG Ventures, eBay and Softbank. His group has a payment gateway, a logistics provider, an affiliate advertisement network and various e-commerce verticals such as a fashion site.
And now, he has Malaysia’s MOL Access Portal as his latest investor through a 50% stake in his online payments business, NganLuong (pic above).
It’s a deal Binh is excited about as he sees it helping the Vietnamese Internet community to buy and sell overseas, tapping into MOL’s merchants.
“We will start with digital goods and content, which is easier than physical goods. Once they are used to such cross-border transactions and it becomes a habit, I think moving on to physical goods will be much easier,” he says.
There is already e-commerce activity in Vietnam, especially through Binh’s http://www.ebay.vn/ which he describes as a portal where PeaceSoft has “Vietnamized everything” in the sense that the goods are actually from overseas, but everything has been translated and converted into the local language, with buyers paying locally and picking up the goods from a local location.
Binh says that typical with e-commerce shopper everywhere, even the wealthy in Vietnam buy online because it is cheaper – sometimes up to 50% cheaper than the price of the same goods are in Vietnam.
The potential for e-commerce is huge in the country, with MOL Global chief executive officer Ganesh Kumar Bangah saying that Vietnam is not only one of the fastest growing but also one of the largest Internet markets in South-East Asia.
It has more than 31 million Internet users, for one. “The opportunities for e-commerce and e-payments growth in Vietnam are great,” says Ganesh.
Which is probably why in February 2012, Germany’s Rocket Internet came into the market with its e-commerce offering, Zalora.vn.
Binh however claims he is unfazed by the competition, despite the typically aggressive manner in which Rocket Internet has come in. “A huge investment,” is how he describes it.
“Competing in e-commerce is a long-term game and not a situation where you can claim you have won after one year. Our strategy in competing with Zalora is to focus on luxury products and to offer better customer service. You will see the outcome of this in a few years, but so far so good,” he says.
An interesting aspect of how Rocket Internet is competing in Vietnam against PeaceSoft is its choice of city to set up operations. While PeaceSoft is in Hanoi, Rocket has set up office in Ho Chi Minh City.
Another interesting aspect is that while they are competing at the front end, there is cooperation too, with Binh saying that they are cross-selling certain items for each other and Rocket Internet has chosen to use PeaceSoft’s payment system, NganLuong.
Meanwhile it does come as a surprise that PeaceSoft is not listed. Binh says it may actually end up listing in a foreign market or sell a stake to a strategic international investor.
“We can also approach a listing by opting to list the entire group or spinning off each product we have with a strategic investor; just like what I did for NganLuong with MOL,” says Binh.
Previous Instalment: How Vietnam’s e-commerce leader built his company
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