A new bilingual discount website is reinventing the Groupon business model….
In Vietnam’s thriving e-commerce market, it seems unfair for the expat community, which stands at more than 700,000 in Saigon, to have to sit on the sidelines and watch without participating.
In August that will change as a new player WeSave (www.wesave.vn), a bilingual Vietnamese-English daily deal site, enters the field.
In its 2013 annual statement, the Vietnam E-Commerce and Information Technology Agency reported 38 daily deal websites operating in Vietnam, a total of 6.3 million voucher transactions worth VND774 billion in revenue, and yearly double digit growth. Without a doubt, Vietnamese-language daily deal sites are going strong in Vietnam.
Despite the size of the industry, WeSave has identified a business model which sets it apart – and, being run by expats – is committed to enabling foreigners to enjoy the benefits along with locals.
“There is never a perfect time to enter an industry,” shares Lance F. Huff, co-founder of WeSave. “To be competitive in any business field you have to offer something different and better to the market and let the customers decide which they prefer.” WeSave boasts a new and different model from existing Vietnamese daily deal sites and aims to set itself apart by offering bilingual options, easier methods of payment, digital delivery voucher codes, and an overall better consumer experience.
“We are very clear on the fact that we do not sell services or products. What we sell are exclusive promotions and our model reflects this,” explains Petr Jumar, WeSave’s co-founder. “The voucher code is not exchangeable for products or services. It is pure promotion. The buyer then pays the money directly to the service provider when he or she uses the services.”
Vouchers on their website are sold for VND10,000 to VND60,000 depending on the value of the deal being offered. The deal code is delivered instantaneously via SMS and entitles its owner to an exclusive promotion at the service supplier.
According to Petr, this model has two game-changing benefits. First, it eliminates the time, labor and logistical difficulty in delivering physical vouchers. “It doesn’t make economical sense to me. It is a costly and inconvenient way that doesn’t belong in this industry. We are not selling tangible products, we are selling promotions.” On Vietnamese sites, it takes anywhere from three to five days and numerous phone calls to deliver a single voucher to the customer. Sometimes it is difficult for the Vietnamese delivery man to communicate with non-Vietnamese customers to rendezvous a delivery time. WeSave’s digital delivery option means that they can easily bypass this hurdle.
Second, since the customers pay the supplier directly, this eliminates the money transferring process between the deal website and the suppliers. “Other sites hold the money for up to three months,” says Petr. “It is terrible for business cash flow. And on top of that, they charge a heavy commission. There are also cases where the suppliers don’t get their money back from the daily deal sites.”
Merchant Feedback
To date, WeSave has amassed more than 60 merchants for their launch and they all look forward to a long and fruitful partnership.
“I am most concerned about branding,” says Valencia Tran, the woman behind Vincom Clair Center, a high-tech beauty clinic, and one of WeSave’s merchants. “What we do here all hinges on top quality, top services, top safety. Our branding must reflect who we are. Vietnamese deal sites, because they must target the largest and least demanding market, do not have much in terms of branding or merchant quality control. I have high hopes to establish the Clair brand as a reputable, prestigious name alongside other similar merchants under WeSave.”
Valencia Tran, Vincom Clair Center James Heng, owner of JJ’s Brazilian Restaurant and Bar
Like Valencia, James Heng, owner of JJ’s Brazilian Restaurant and Bar on Pham Ngu Lao in District 1, is a businessman with less than perfect past experiences with Vietnamese deal websites. “It is always so difficult to get the money from them. I run a food business. Cost is incurred on the day, but I had to wait for at least a month, sometimes more for the money I made to get to the bank.” James has cycled through various Vietnamese deal sites before. “Hotdeal, Nhommua, Cungmua, I’ve tried them all.”
On his partnership with WeSave, a new brand in a notoriously ruthlessly competitive market, James is not at all concerned. “I run no risk,” he says simply. “The customers come to me and pay me. I get the money the moment I incur cost. They make money from selling our promotions. It’s win-win-win, for us, for WeSave, and for the buyers.”
“In Europe, the economy is down, so the national trend is for everyone to save as much as possible. Of course in this environment, the Groupon industry and services thrive,” adds Giacomo Erre, the managing director of Villa Aesthetica Cosmedi Spa who has also partnered with WeSave. “I have seen their model. It’s good. So I have high hopes for them.”
Giacomo Erre, the managing director of Villa Aesthetica Cosmedi Spa
Images by Ngoc Tran
