Group vouchers boom in Vietnam

Groupons or group vouchers have become popular among Vietnamese students and white-collar workers due to attractive discounts and a wide range of services and products.

Just with a mouse click, anyone can easily purchase vouchers offering 40-70 percent discount on services and products in their location.

Great discounts

At weekends, Chau, who works for an auditing company in Ho Chi Minh City, was invited by a friend to a hot pot restaurant in District 3’s Ky Dong Street.

After finishing the meals, her friend did not pay in cash but handed a staff two blue groupons she had previously bought online. Chau was surprised to see two VND30,000 vouchers could cover a meal that costs VND60,000 each.

They saved 50 percent for dinner that day.

Chau’s friend is just one among thousands of people who are fond of using groupons these days.

Introduced to Vietnam in mid-2010, groupons have quickly become popular among students and white-collar workers.

Ngoc Chau, a student from the University of Social Science and Humanities, said her friends often visit groupon sites to hunt for attractive vouchers, usually with 70-percent discount. There are many good offers on food and fashion products with an affordable price for students.

Nowadays, there are almost 20 groupon sites in Vietnam, according to Vu Hong Quang, representative of the Southern VC Corp which possesses the group-buying site muachung.com.

He said his site has 100,000 members after 7 months in operation. Their competitor nhommua.com also has the same number of registers. Even newbie like hotdeal.vn, a brother site of the online book store Vinabook.com, which belongs to MekongCom Corporation, also has 60,000 subscribers.

Win-win model

Buying in groups is a win-win situation for three parties: enterprises can sell their products, groupon companies profit from commission and customers can get good deals.

Minh Bui, an expert in online business said groupon is actually a kind of promotion and marketing. Businesses will know exactly the number of people using their service or products. Thus this kind of business model is more interactive than advertising.

Do Tuan Hung Manh, manager of Lazi resort in the coastal province of Binh Thuan who offered accommodation deals on cungmua.com, said within four days the site could sell 600 vouchers, which was a big surprise for him.

“This model can solve the drop in occupancy rate in hotel on mid-week. Meanwhile, buyers can be assured of the price. The valid time to use vouchers is long and there is no additional fee even though the price may rise in the future,” said Manh.

“In this race, there will be tycoons with strong financial power who can offer interesting discounts with conditions to gradually eliminate their competitors,” predicted business expert Minh Bui.

However, from the view of groupon sites, Hong Quang said majority of investors who opens groupon service often take advantage of previously successful project and apply on their group buying sites.

He took examples of his two competitors. Hotdeal.com depends on the same customers from Vinabook.com while nhommua.com is supported with US$1 million from the German Rebate Networks.

Another newbie Zing Deal counts on teenagers, most of whom are members on Zing.me, the biggest social network in Vietnam.

Pending problems

The biggest challenge for groupon sites are method of payment and privacy.

As many are not familiar with online transaction, majority of groupon vouchers are purchased by money transfer or cash on delivery method.

Many vouchers are delivered late or lost although cost for a delivery team is not small.

The three things that customers are most concerned about on buying a product are price, quality and time.

However, when purchasing online via groupon sites, customers cannot dictate the time to receive vouchers and therefore have to book in advance to use the service.

Besides, there are many partners who do not follow the contract, provide bad service or treat groupon customers differently.

After putting up deals on sale, resort director Manh said he received many calls confirming if the discount was true or not. Thus the key to success for this kind of business is to ensure service quality and price to keep customer trust.- Tuoi Tre

Tags: Group vouchers