Muahz.Net Bridge – Groupon shopping model, which has been very successful in the US. However, despite the great advantages, analysts believe that the model is not likely to succeed in Vietnam.
VNG on February 7 officially announced the closing of zing.deal.vn, a Groupon service, after published the decision on the website last week. The announcement has caught the special attention from the public because it not only declares the end of a part of a company, but may be the end of a type of business.Doan Do Ngoc Thi, a senior executive, said on Saigon Tiep Thi that VNG has decided to stop providing the service, because it plans to focus on technology products.
“The lessons we draw from running Zing Deal could be applied for the new models of VNG, especially in e-commerce which has become a growing tendency,” she said.
“Having the community” doesn’t mean “having everything”
The ending of Zing Deal has raised a question about the future of the Groupon business model which has been developing rapidly in recent years. In the past, VNG once closed some services which even had larger communities, such as Zing Chat, Zing Search, Zing Movie. However, the decisions in the past could not catch such a special attention.
Why has Zing Deal become the hottest topic among the online community, then? The Groupon service has been expanding rapidly which has brought high turnovers. Zing Deal, right from the beginning, set up an ambitious goal that it needs to lead the market.
VNG planned to take full advantage of the large community it has at Zing portals, such as online music, social networks and game players to use the new type of business.
However, analysts have commented that “having a large community” does not mean “having everything|. It’s not easy to succeed in e-commerce, which requires many things more than a large community.
In recent years, VNG has been “tottery” on the Groupon market with the business results less satisfactory than other successful services, including games or information portals.
VNG has never announced the turnover from the Groupon service, but said the service only could bring a small turnover; therefore, the closing of the service would not affect the company’s operation.
Meanwhile, according to dealcuatui.com, an independent website on Groupon services, in 2011, zing.deal.vn got the revenue of 6.6 billion dong from 120 deals. It ranked the 9th, but just held 0.99 percent of the market share.
While VNG is running many different kinds of services, it is really a wise move to give up zing.deal to focus on the advantageous sectors which can bring higher profits.
What’s next?
Analysts say that not only zing.deal.vn, but hundreds of the websites which follow the same model, would also leave the market.
They said that the arrival or the leave of one or another company is quite a normal phenomenon in the market. In many cases, even big companies could not succeed with simple services. Meanwhile, the companies which are leading the market now, such as nhommua, hotdeal, cungmua have smaller communities, but as they have gathered strength on the services, they have made big leaps in their business.
Five reasons have been cited to explain why it’s difficult to succeed with Groupon Vietnam 1) the high payment service and inconvenient payment methods 2) the services are not as good as advertised, customers cannot be served well 3) the quality of products is not equal 4) Vietnamese Groupon service providers have to persuade distributors to supply goods, which means high sales cost and 5) the marketing costs in Vietnam are high.
Also according to dealcuatui.com, the total turnover of the Groupon service in 2011 reached 670 billion dong with 4.6 million vouchers and 7600 deals. The top five companies include nhommua.com, hotdeal.vn. muachung.vn, cungmua.com and runhau.vn which are holding 97 percent of the market share.
Source: SGTT
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