Vietnamese Google Rival Challenging Global Giant

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Information technologies are creating new business opportunities across the global South. As more and more people gain access to the Internet in one form or another, opportunities to offer them services also increase.

A number of key trends show how the Internet’s profile is being reshaped by the growing number of users from the global South. One of those trends is language. English was the first language to dominate the Internet – but this is changing, according to the latest data.

China has the largest number of Internet users in the world (China Internet Network Information Center) and the Chinese language is the second-most often used online, behind English and before Spanish and Japanese (http://www.internetworldstats.com/stats7.htm).

While most English-language users turn to the giant Google search engine to look things up on the Internet, Google also has many rivals chasing its tail. In China, Baidu (baidu.com) offers searches in Mandarin using Chinese characters, making the Internet easier to navigate for Mandarin speakers. Elsewhere, Arabic language Internet users are being offered new services and urls using Arabic characters.

In short, the Internet is becoming multilingual, customized and local, and creating new opportunities with it.

One new business in Vietnam is challenging Google with its own locally tailored search engine. Called Coc Coc (http://coccoc.com/) – Knock Knock in English – it has already spent US $10 million to hire 300 staff at its Hanoi base, according to the Associated Press. Whether Coc Coc is successful or not in the long term, it is clear as a business it is already helping the local economy by hiring so many people and investing in Vietnam. Google currently does not have any staff in Vietnam because of its concerns about legal conflict with the government over censorship of content on the Internet, AP reports.

Coc Coc believes it has developed a system that better understands the grammar, syntax and nuances of the Vietnamese language. Another advantage it believes it has over Google is its large presence on the ground in Vietnam. With a headquarters in Hanoi, it can quickly make marketing deals and agreements with content providers. To further its local advantage, Coc Coc has dispatched camera crews and photographers to film and photograph streets and log the details of shops, cafes and businesses – all to make search results more accurate and richer in detail.

The headquarters is spread out over four floors of a downtown office block in Hanoi, and according to the Associated Press has a relaxed atmosphere similar to that found in many places in California’s technology start-up culture.

Coc Coc is a joint Russian-Vietnamese venture and is hoping to ride the fast-growing Asian Internet market by offering a search tool that understands the nuances of the Vietnamese language online. By using algorithms (https://en.wikipedia.org/wiki/Algorithm) it promises to give a faster and better search experience to Vietnamese-language users. It also uses its knowledge of the local scene to tailor results to users’ needs.

The plan is to spend US $100 million during the next five years to lure 97 per cent of Vietnamese Internet users to make the switch from Google.

“When I came here, I had some understanding why Vietnam was a good market to beat Google,” said Mikhail Kostin, the company’s chief search expert. “But after living here for one year, I understand the language and market much more deeply. I’m sure it’s right.”

Having a local search engine tool can be a successful approach. The Yandex (http://www.yandex.com/) search engine in Russia beats Google in the Russian-speaking market. In South Korea, there is the Naver (naver.com) search engine.

Google battled it out with the Chinese search engine Baidu in 2010 before leaving the country when Google refused to abide by government censorship guidelines. Baidu in the meantime has become the number one search engine in China and is planning to expand to other markets throughout Asia.

“Google is a foreign company, and they are not here,” said one of the three founders of Coc Coc, Nguyen Duc Ngoc. “We can serve the interests of the local market better.”

Vietnam has been experiencing rapid economic growth since the introduction of the Doi Moi (https://en.wikipedia.org/wiki/Doi_Moi) economic reforms two decades ago in 1986. Vietnam is fast becoming an Internet success story, with a third of its population of 88 million (World Bank) (http://www.worldbank.org/en/country/vietnam) now online. Many are accessing the Internet through their mobile phones and electronic devices.

Vietnam connected to the Internet in the 1990s and the infrastructure was built up in the mid-2000s. A national plan that kicked off in 2005 accelerated take-up of the Internet in the country as more and more people accessed the Internet through mobile phones, often at home, rather than just in public Internet centres. One study found 71 per cent of users in major cities were accessing the Internet at home (https://opennet.net/research/profiles/vietnam). One in three people in Vietnam now has access to the Internet. Significantly, the Internet has been an overwhelming success with youth in the main cities of Hanoi and Ho Chi Minh City, where 95 per cent of people in the 15-to-22 age group has Internet access.

Optimists point to Vietnam’s large youth population, fast-growing economy and its modern Internet infrastructure as advantages that will boost its Internet economy. This is attracting entrepreneurs and investors from across Asia and around the world working in the field of online content, e-payments systems and other online services.

With Vietnam’s Internet scene on fire, many people and companies are piling in to come up with the Next Big Thing online. Many have failed, but the same is true in every other country where new information technologies have been introduced. The nature of information technology innovation means ideas quickly rise or die depending on whether Internet users find the innovation useful or attractive. Despite great ideas, there are often far too many factors at play to guarantee any one person or company will have a success on their first try. As has happened elsewhere, ideas hatched by small start-ups, if good, are gobbled up by larger companies. Talented and skilled people usually find themselves being chased by other companies.

Resources

1) Techinasia: “Vietnam is Asia’s New Tech Manufacturing Hub”. Website: http://www.techinasia.com/vietnam-asias-tech-manufacturing-hub/

2) Allo’ Expat Vietnam: A list of Vietnam’s Internet Service Providers (ISPs). Website: http://www.vietnam.alloexpat.com/vietnam_information/internet_service_providers_vietnam.php

3) Telecommunications in Vietnam: A quick explanation from Wikipedia on the state of play in Vietnam. Website: http://en.wikipedia.org/wiki/Telecommunications_in_Vietnam

4) Vietnam Women’s Innovation Day 2013: Theme: “Women’s Economic Empowerment”. Website: http://www.worldbank.org/en/news/press-release/2013/03/13/vietnam-womens-innovation-day-2013-launched-themed-womens-economic-empowerment-8221