The Institute for Vaccines and Medical Biologicals under the Health Ministry is stepping up preparations for production of a vaccine against H1N1 flu virus in late 2014 or early 2015.
|Digital contest on mobile phones was the star performer, raking in the biggest revenue (US$383.3 million) in 2009, or almost 56% of the total earnings|
Digital content is developing rapidly and steadily in Vietnam, posting growth of 55% per annum. According to the White Book on Vietnam’s Infotech and Media 2010, unveiled in June, the information technology (IT) industry has often clocked up growth of 20-25% per annum since 2000. The global slump in 2008-2009 pulled down growth to 18.14%. The total revenue during these two years hit US$6.17 billion.
In particular, digital content and online service providers have fared well and asserted their growing strength, with growth of over 55% per annum, even in 2008-2009, a period of economic turmoil.
As of late 2009, this sector had lured 500 enterprises, with some 41,000 employees, and posted revenue growth of almost 57% year-on-year. Revenue reached US$690 million, far higher than the target of US$400 million per annum.
However, development does not occur across the board. Digital content on mobile phones was the star performer, raking in the biggest revenue (US$383.3 million) in 2009, or almost 56% of the total earnings. In contrast, digital content on the Internet witnessed a mixed performance, especially when viewed in relation to market potential.
Internet digital content services have captured the interest and investment of such giant enterprises as VTC and VNG despite limited profit growth and the long time taken to recoup investment. IT experts contend that continued investment in social networking sites in Vietnam hinge on several factors.
First, the market for Internet services in Vietnam has developed by almost 11% per annum over the past decade. Vietnam has nearly 30 million Internet users at present, 20-25% of whom join social networking sites. Second, there is huge demand for increased connectivity for the sake of networking. The popularity of online entertainment avenues with young people is also rising at the expense of traditional media channels. Third, the global success of social networking sites has held sway over local providers.
In May this year, VTC launched www.goonline.vn, an interactive social networking site owned and developed entirely by Vietnamese. This site seeks to become Vietnam’s leading information network, account for 40-50% of traffic to social networking sites in 2015 and serve four million users simultaneously. Its competitive edge probably rests on goEdu, an online education gateway developed with support from the Ministry of Education and Training.
In August, VNG unveiled Zing Me, another social networking site located at http://me.zing.vn, after a one-year pilot run. VNG says that Zing Me has attracted 5.1 million members, most of whom are students, and boasts a page view of over 450 million per month. Vuong Quang Khai, deputy general director of VNG, says that social networking sites are proliferating, but only two to three can survive in the long run, thanks mainly to better interactive features and new applications.
Nguyen Huu Hanh, general director of Yahoo! Vietnam, says that social networking sites offer fertile ground for long-term business development. Yahoo!360 Plus, which replaces the now-defunct Yahoo!360, continues to draw numerous users, prompting Yahoo! to cooperate with Dell and Intel to develop this service further.
Statistics from Google Ad Planner (GAP), which measures traffic to websites, indicate that the number of Internet users in Vietnam reached 31 million in July 2010, up three million month-on-month. The total number of page views was 15 billion, up over one billion. About 80% of Vietnamese websites posted growth in both the number of users and page views, while the remaining 20% experienced slight decreases.
Zing Me was the leading social networking site, with 5.1 million members and 450 million page views. Facebook, which ranked second, and yume.vn, which ranked third, had the same number of users (2.6 million), but the former boasted more page views.
Tamtay.vn (1.3 million users) came in fourth. Zooz.vn and goonline.vn did not make this list, as well as that of Vietnam’s top 100 websites.
These figures attest to the astounding popularity of social networking sites and the fierce competition in the market for Internet content services.
Online music sites, which once flourished, are in decline, with only a few big and influential websites still in the game. Even Yahoo! Vietnam, a powerful player, shut down its online music website in January 2009 as part of its new strategy.
Currently, big names in this segment include nhaccuatui.com, yeuamnhac.com, nhacso.net and Zing MP3.
Nhan The Luan, general director of NCT Corporation, which develops nhaccuatui.com, says that online music sites mushroomed three years ago, when ADSL was on the rise and access to songs online was easy. Once, there were more than 200 music sites. However, as time goes by, low-quality websites with scant investment in infrastructure have vanished. “Apart from increasingly expensive servers and higher copyright fees, shrinking revenue from advertising also eliminates small websites,” Luan says.
Dinh Le Dat, director of nhacso.net, developed by FPT Online, shares Luan’s view, adding that Vietnam’s unique circumstances make online music sites, once perceived as profitable, incapable of robust development. Dat says the main reason is the dismal growth of Vietnam’s e-commerce, which has seen no significant improvement over the past five years, and the lack of a common payment method in the country. Meanwhile, popular foreign payment services have yet to gain ground in Vietnam. In addition, Vietnamese users usually deem Internet resources as free gifts and do not want to pay for online music.
Consequently, there has not been a real market for online music. As things currently stand, players in this field merely allow users to download music free-of-charge. Service providers have not been able to charge end-users and must rely instead on limited advertising revenue. To aggravate matters, copyright fees are exorbitant.
“As revenue trails behind costs, online music sites have plunged into trouble. Copyright music services on nhacso.net are about to undergo a transformation,” Dat says. He adds that nhacso.net has depended substantially on advertising revenue. In the future, probably by late 2010, it will turn into a social medium which combines online music and networking sites.
An expert ascribes the success of Zing MP3 and nhaccuatui.com, the most popular online music sites in Vietnam, to support from financially capable groups. As most popular songs are available free-of-charge on both sites for listening and downloading, newcomers have found it hard to penetrate this field. He says it is an uphill task to do business with digital music due to the enormous costs involved and bleak revenue prospects.
Luan agrees that establishing a system of servers and connections is costly and far exceeds revenue, which involves mainly advertising revenue. While the music available on nhaccuatui.com is uploaded by users and straddles across different genres, NCT Corporation has worked with related agencies such as the Recording Industry Association of Vietnam and the Vietnam Center for Protection of Music Copyright to deal with copyright issues, which this firm considers extremely important.
Luan says that apart from nhaccuatui.com, NCT will offer other entertainment services such as video clips, photos, news, e-commerce and so on, in line with successful global business models.