As Sean mentioned in a previous blog, here in Hanoi we have noticed an interesting pattern of shops lining the streets of the city. Whether we are on “fan street,” “sink street” or “shoe street,” seemingly every store on a given street looks exactly the same and sells the exact same products as the one next to it. There is simply no differentiation among any of them, and the same types of stores are always clustered right next door to each other. As business school students, we have been scratching our heads at this strategy.
As we have gained more and more knowledge about our client in Vietnam, a mobile telecom content provider, we have noticed a similar pattern. Everything we have learned about the industry and the company in the past two and a half weeks points to the same conclusion…our client is living on “mobile content street.”
The mobile content industry in Vietnam has become overly saturated in the past several years, and despite the fact that our client was one of the first players in this industry, they are now competing with literally hundreds of competitors. Add to that the “copycat” culture in Vietnam and the lack of IP protection, it doesn’t matter how creative any company is in producing new content; competitors instantaneously rip it off and reproduce the same thing. Differentiation and competitive advantage are nearly impossible to achieve in the current state of this industry. Oh, and one more thing: as technology has advanced, various apps have made it downright easy for individual consumers to create on their own much of what our client produces. Such content includes ringtones and wallpapers for phones. In fact, a focus group we held with a number of employees revealed the fact that most of them do not actually purchase any of the content their company creates. They either download it illegally for free, as does most of the population here, or they create it through free apps.
Last week we traveled to Ho Chi Minh City in south Vietnam to continue this research and look for any bright spots on the horizon for the industry. We packed in meetings with executives at five different companies all over the city on Friday, aiming to gain more knowledge about not only mobile content, but also what types of trends are taking place or are anticipated for other digital technology. These meetings were incredibly helpful and we were so lucky to have had so many contacts in the area. We were exceptionally well-received at a number of companies where Thunderbird had visited before and found everyone to be extremely open and honest in sharing information with us. We left HCMC with some great ideas about new opportunities we could research for our client, but also numerous assurances that new opportunities are not just an option, but an immediate necessity. Our meetings confirmed for us that mobile content street is, in fact, a dead end.
So now that we know we are living on “mobile content street,” all we have to do is figure out how to get our client to move to a new neighborhood. Easy, right?! Well, we are beginning to learn just exactly what that move entails. Besides learning the intricacies of what we have discovered to be a very complex industry that involves complex relationships with telecom operators, researching the economic state of the country in order to predict when and if new technology will hit here, figuring out a way to reinvent the company to prepare them for this advancing technology, while also making recommendations on how to adjust the company’s current strategies in order to begin generating more revenue in the short-term, we have our hands full. But the challenge has been exciting for us, and we are enjoying the opportunity to really put all of our classes and experiences to use here in Vietnam. We will keep you posted on any new real estate we find.