My Trip to Vietnam ‘17 (part 1)
On 27th October 2017, at 11am I was boarding the Vietnam Airlines plane back to the country of my origin, Vietnam. I was so thrilled to see how Vietnam has developed and what new things I was going see, whether it’s a plus or minus. My last trip to Vietnam in May 2016, which was about exploring the country as a tourist, this time, I was going back to understand whether I can imagine myself living in VN in the future and have a taster of the developing startup ecosystem in Vietnam.
A quick intro about myself, I am Vietnamese born and lived in the Czech Republic until the age of 16, did my A-Levels and university degree in the UK, and currently work at a startup in London. As a Vietnamese diaspora, or otherwise known as “Viet Kieu”, I see Vietnam as a great adventure with a huge potential. Why? Because every time, I visit Vietnam, there is something new. This time, I landed in the new Hanoi airport terminal, drove around with Uber and Grab, saw the panorama of Hanoi from the Lotte tower, worked in newly established startup co-working space and the list goes on and on. I compare this to Europe, and life in Europe seems pretty static. I am also buoyed by the economic indicators from the World Bank:, e.g. GDP growth averaging 6.4 percent a year in the 2000s or GDP per capita rising from $433 in 2000 to $2,185 in 2016 (link).
Now, all of this is just my observation and macro-level data that explains my hope and excitement for Vietnam. But let’s have a look at the highlights of my trip:
- Case Study — Grab Taxi Driver
- HANOI — VP Bank & Up Co-Working Space (Part 1)
- HCMC — 500 Startups & Vietcetera office (Part 2 - to come)
Case Study — Grab Taxi Driver
Everyone knows the “sharing-economy” companies popping up around the world, especially the likes of Uber. For every “sharing-economy” startup beginning their journey, many use the word “Uber of…”. Based in the West, I’ve only heard of Grab and Uber entering the Vietnamese market. I didn’t really realise how integrated Grab & Uber have become in the two largest cities in Vietnam, Hanoi and Saigon. On the streets of Hanoi, there were Grab drivers everywhere in green. Even at home, my grandmother or auntie told me to use Grab anywhere I go. So, to understand a little about the Grab and Uber story in Vietnam, I took a Grab Taxi and had a conversation with the driver.
When Grab entered Vietnam, they had a “typical” sales approach. The Grab driver, I spoke to already worked for a traditional taxi company. One day, whilst looking for a customer, he was approached by a Grab sales representative on the street who informed him about the Grab service and the potential to earn more income. At first, the taxi drivers or car owners were very skeptical and scared that it could be a scam. However, after a while, his friends, who were happy with Grab, recommended him to jump in too. The driver was happy with the service and as a result he told his other friends. This was the power of “word-of-mouth” marketing in action.
However, to get their first initial customers before going viral, Grab took the best care of their initial customers. When the driver signed up, he was invited to the Grab office for a training / onboarding session lasting ~1 hour. Grab used these sessions to educate the drivers about Grab and the phone application. Additionally, Grab gave the drivers a lot of useful merchandise that the drivers could use. E.g. Grab pillow to support the driver’s neck. And if I remember correctly, drivers with kids even received free packs of milk when they joined. In his own word, the taxi driver said “Grab took really good care of us when we joined”.
“So how did Grab help you concretely?”, I asked.
- Extra income
- Ability to fill up spare capacity
- Ease of finding customers
In the past, to find customers taxi drivers had to wait at a spot until a customer calls them. And unless you are a taxi company with means, you are ushered away from “reserved” taxi spots. Or else, you drive slowly on the street to find waving customers. With Grab, customers are brought to them and they have the power to choose.
“May I ask how financially this has helped you?”
On an average month, he made ~30m VNDrevenue. His expenses were ~7m VNDfor Grab fees and ~14m VND for Petrol + maintenance fees. So he could take home ~9m VND profits.
And on a good month, the driver could take up to 20m VND profit. This is not bad. This would buy you a London — Hanoi return flight ticket.
Nevertheless, the taxi driver has acknowledged that the “honeymoon” period is coming to an end: drivers face difficulties. The ride-sharing market in Hanoi has become saturated due to so many drivers joining the platform, creating intensified competition. Furthermore, there is a shift in balance from customers having more power as they have the power to choose their driver or the ability to review drivers.
VPBank in Lang Ha
I was meeting up with an old friend for lunch and ended up visiting the head office of VP Bank in Lang Ha street. I didn’t know much about VPBank and during my visit there, there were a couple of things that positively surprised me.
VPBank is the most profitable retail bank that has recently IPO-ed in August 2017, and is one of the 4 non-government owned enterprises listed on the Ho Chi Minh Stock Exchange (VNINDX Index). VPBank is also investing into its digital capabilities. Recently, VPBank opened a joint co-working space with Up situated in their HQ building, called Up @ VPBank Co-Working Space. This is a collaboration that aims at spurring innovation, with the ambition to create new fintech companies.
The view from the co-working space on Hanoi is meaningful as it portrays the point in time where Vietnam is on the cross-roads between the old and new (see the picture below).
I was fortunate to visit their “Digital Lab” office, where their digital products and solutions are being produced. The Digital Lab had product teams applying the agile methodology to their software development. They even had huge Kanban boards in the middle of the room to help them prioritize, focus and track the progress of their work. In other words, it’s like our VietStartup Trello board, but projected physically onto meeting room walls (see picture below).
Interesting fact: VPBank is an example of the Vietnamese diaspora coming back to work in Vietnam. E.g. the chairman of VPBank, Ngo Chi Dung, who is a Vietnamese diaspora from Russia. Or during the lunch, I’ve met two Russian Viet Kieus who were colleagues of my friend that currently live in Hanoi.
Up Co-Working Space in Luong Yen
My next destination was to visit Cam Van, who is the COO at Up Co-Working Space in Lương Yên but also a friend from my undergraduate study. I’ve been following Up very closely via social media from London and have followed their rapid expansion journey with now three spaces in Hanoi and one in HCMC so I was excited to see the main space for myself.
When I first got to the 8th floor, it was completely dark and I was “WTF? Am I on the right floor”, then a 3D cube with the Up logo lit up giving me a bit of a breather. It was so dark and I still couldn’t find the main door (see pic below). It was like a maze until I saw someone open the main door to the co-working space so I rushed right straight in. Wow, that was an interesting introduction. Finally, I was able to meet Cam Van.
I was curious about her transition from London back to Vietnam to understand how I myself will have to adjust when coming back in the future. After finishing her undergraduate degree, she started out in Deloitte in London before joining a consulting firm in HCMC and then ultimately coming back to Hanoi to take on the Head of Ops role. So how is her life back in Vietnam? Cam Van needed time to adapt and reintegrate back to the Vietnamese way of life (read this article by Vietcetera that describes the experience well).
However, her experience in consulting was very helpful as she brought a lot of transferable skills to her current role for skills. Coming back to Vietnam was about taking an opportunity and accelerating her career. Within less than 2 years, Cam Van was promoted to COO taking on a senior responsibility at an early stage of her career. Compared to if she decided to stay in the UK, she would still be climbing the corporate ladder, perhaps being an associate or a consultant at this stage. Her future goal is to start a business of her own and her current positions is a fast-track towards that goal helping her to build skills that will help her in the future.
On top of her busy schedule, she co-founded the Lean In movement in Vietnam. Lean In Vietnam’s goal is to encourage women to pursue their ambitions and change their community for better. This was inspired by the COO of Facebook, Sheryl Sandberg who is the author of the best-seller Lean In. I was completely blown away when Cam Van informed me that her team was able to invite Sheryl Sandberg to speak at their co-working space on the 12th November 2017.
Overall, I had a great impression of the Hanoi emerging startup ecosystem. Saigon, here I come…
