ISYS2110 Internet for Business

CASE 1: MOX DEALS VIETNAM: THE FIGHT OF

DAILY DEALS SITES

Lecture: Kevin Kuruvilla Group 2

Team name: ACE Team
Bui Huu Thien
Pham Thu Trang
Tran Minh Anh

I.

- s3516393
- s3467623
- s3515351

E-STRATEGY: MICRO AND MACRO ENVIRONMENT

1. SLEPT analysis (Macro Environment)

Mox Deals Vietnam

Social: When the political and economic reform or Doi Moi occurred in 1986, Vietnam becomes the
country has the strong consumer culture as the usage of internet and the development of smart
phone increased. Johnny Tri Dung claimed that by January 2014, 34% of the population in Vietnam
has access to Internet on their mobile devices. Especially, nearly 95% of smartphone users
research products by their phones and 60% of them have made purchase via their phones.
However, there is no clear market leader because the e-commerce market is still developing.
Furthermore, there are still many Vietnamese are unfamiliar with the concept of online shopping as
they concerned in the quality of the products which can be measured by visiting the store and look
through the physical products. It is thus incumbent upon e-commerce companies to battle against
this skepticism and create trust between the customers and the online shopping sites (Lacey &
Zaca, 2014).
Legality: According to the worldwide professionals, the E-commerce economy is still developing.
Furthermore, safe and secure infrastructures for e-commerce are well developed with the
establishment of management and monitoring systems, rating of e-commerce websites and the
mechanism to solve disputes and violations in e-commerce trading (Viet Nam News 2015).
According to Rouse, The government issued the recently enacted Decree 124/2015/ND-CP on 19
November 2015 which provides penalties for e-commerce violations, particularly in the
establishment, management and operation of mobile application used for e-commerce activities.
Economical: Before the political and economic reform (Doi Moi) began in 1986, the socialist
republic of Vietnam is still communist dictatorship represented by political and economic repression
and an absence of civil liberties (Heritage, 2016). According to the World Bank, It is cleared that the
reform launched in 1986 transformed Vietnam from one of the poorest in the world, with per capita
income around $100, to lower middle income status within a quarter of a century with per capita
income of over $2,000 by the end of 2014. It is clear that with the development of Internet, the ecommerce becomes one of most important business industry in Vietnam with a lot of internet
services especially with the growth of Daily Deal. In its 2013 annual statement, the Vietnam ECommerce and Information Technology Agency reported 38 daily deal websites operating in
Vietnam, a total of 6.3 million voucher transactions worth 774 billion dong in revenue, and yearly
double digit growth. Without a doubt, Vietnamese-language daily deal sites are going strong in
Vietnam (Oi Vietnam, 2014).
Political: The political system in Vietnam is the law-governed state and ruled by the Communist
Party of Vietnam (CPV). According to the Vietnam Embassy, the State of the Socialist Republic of
Viet Nam is the pillar of the politics which acts on behalf of the people and is accountable to the
people for the management of all activities of the social life and in domestic and external affairs.
Due to the feature of one-state government, the internal conflicts are rarely occurring. Furthermore,
there are also restrictions on freedom of speech which can affect internet usage, particularly the use
of social media and personal blogs, access to which can be blocked without notice (GOV, 2015).
Technological: Although Vietnam becomes the developing country with high GDP in South East
Asia and E-commerce became established in 2005 along with the growth of Internet, there are still
many challenges that the E-commerce business has to face in order to create a strong

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development of E-commerce in Vietnam. According to Kim Phuong, The challenge of developing
E-commerce market such as the lack of human resources for e- commerce, a developing ICT
infrastructure and particularly the unformed legal environment and policies can be served as the
major obstacles in developing e-commerce in Vietnam. In fact, most enterprises do not know about
E-commerce as well as its advantage and requirement of establishing it. It is important to create
the strong technical infrastructures for E-Commerce by exchanging technologies with foreign
countries.

2. SWOT Analysis (Micro Environment)

Strengths

Weaknesses

Diversity in coupon business model

employment: not only in conventional
multi-product coupon sites such as
consumer goods, entertainment or
travelling but also has been expanded
to specialized fields such as books
and real estate.

Value
proposition
consumers

The use of internet as the platform to

facilitate transactions which provides
convenience for consumers and
effectiveness yet cheap operating
costs for businesses

offered

Main expenditures are from sales team

and marketing efforts (50% of total cost)
while the effectiveness of old marketing
strategies such as emails and social
media is being questioned

Quality of deals offered are not

guaranteed: the focus of most coupon
business is to discount deals as much
as possible due to the nature of the
industry thus quality and authenticity are
sacrificed

to

Opportunities

Rapid expansion of the industry (97

companies from second quarter of

Threats

ISYS2110 Semester C, 2015Page 3

Vietnamese consumers unfavorable

impressions on the daily deals industry

Mox Deals Vietnam

2010 to the end of 2011)

The growth of e-commerce in general

as Vietnamese businesses started to
acknowledge the role of e-commerce
in trade activities

Significant development in regulations

on e-commerce from Vietnamese
government since 2007

Enormous growth in the number of

internet users in Vietnam: 1.59 million
new users in 2012 and 32% of all
users
participated
in
online
transactions.

B.

Two strategies

due to quality control controversies (over

70% of consumers)

Many existing hindrances in the

framework for e-commerce: payment
infrastructure, logistic infrastructure and
information
technology
and
communication infrastructure

Vietnamese consumers habit: not yet

familiar
with
electronic
payment
methods and is still cash society which
leads to higher operating expenditure

Due to the increasing in establishing and maintaining costs as well as the fierce competition
between coupon businesses, many companies focus on lowering their prices to sell more rather
than maintaining and improving the quality of products and services they provide through deals and
coupons. As the result, many of products and services are fake and low quality, which also leads to
the negative impressions of customers toward online coupons and deals. Many consumers will stop
purchasing through deals because of lacking trust. Hence, the objective of the below strategies is to
change this perception of consumers and encourage them to make more purchases in the future.

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The first strategy that could be considered is innovationtion strategy, which means that offer
unique mix of values to customers to create competitive advantage (Izushi & Huggins 2011).
Companies in the industry such as Mox Deal, Nhommua, Hot Deal, etc. can cooperate together to
create a mutual inspection system to check the availability as well as quality of products and
services offered through deals and coupons. A committee will be set up, combining representative
members from each company to ensure fairness and integrity in the checking process. This will
create consistent standards for online deals and coupons, which also protect customers from
buying fake and low quality goods/services. The committee also check and verify the description,
photos, places, etc. of the random products/services that are provided on the websites of coupon
businesses to make sure everything is trustworthy. Any product or service goes through the
checking will be received Qualified star, which will be displayed in the description of products on
the websites. If any product/service checked is fake or low quality, the committee will require the
business to take it out of the market and pay a 10 million VND fine. This will help to create a safe
and quality online marketplace for customers. The more confident and comfortable customers are,
the easier they will make purchases.

A second strategy that a typical coupon and dealing business should apply is developing web
service quality. Web content including size, style, presentation and layout of information, function,
etc. plays a very important role in influencing the perception of e-customers (Udo et al. 2010).
Sufficient, quality, real information and prices of products or services including real photos and
addresses needs to be displayed on the website. The company should also set up hotline number
as well as chatting on the website to immediate answer questions from customers whenever they
have any problem or issue toward the coupons and deals. Professional, convenient presentation
and layout of the website will bring customers the feeling of comfort and confidence to make

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purchases. Moreover, the company should differentiate itself from competitors by offering exchange
and return coupons (not expired) whenever the coupons having problems or customers want to
change their minds (in this case customers will just be refunded 70% of the price). All of the things
above help customers to be more confident, comfortable as well as professional when making
purchases. This also contributes to positively influence the way customers perceive about online
coupons and deal.

Conclusion
The above two strategies aim to change the current negative perception toward online coupons and
deals to positive perception, which leads to the increase in number of consumers in this industry.

References:

Dung, T ,April 9th 2014, Vietnam E-Commerce Overview and Market Size, E-Commerce
Milo,
viewed
11
March
2016,<http://www.ecommercemilo.com/2014/04/vietnamecommerce-overview-and-market-size.html >

Izushi, H & Huggins, R 2011, Competition, Competitive Advantage, and Clusters : The Ideas
of Michael Porter, 1st edn, Oxford, viewed 9 March 2016,
<http://web.b.ebscohost.com.ezproxy.lib.rmit.edu.au/ehost/detail/detail/bmxlYmtfXzQzODQ2
M19fQU41?sid=7ff1a78b-3398-40d2-b798e025cac9422d@sessionmgr113&vid=0#AN=438463&db=nlebk>.

Khanh, NPD, August 8th 2014, Lets Make A Deal, Oi Vietnam, viewed 9th March 2016,
<http://oivietnam.com/2014/08/lets-make-a-deal/>.

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Mox Deals Vietnam

Lacey, E &, Zaca, F, April 29 th 2014, Vietnam Online - Understanding Vietnams Ecommerce market, Vietnam Briefing, viewed 11 March 2016,<http://www.vietnambriefing.com/news/vietnam-online-understanding-vietnams-e-commerce-market.html/ >.

Phuong, K, March 11th 2016, Development Trend of E-commerce in Vietnam, Vietnam

Business Forum, viewed 11 March 2016, <http://vccinews.com/news_detail.asp?
news_id=4395>.

Rouse, December 18th 2015, Vietnam Strengthens E-commerce and M-Commerce

regulation,
Rouse
the
Magazine,
viewed
10th
March
2016,
<http://www.rouse.com/magazine/news/vietnam-strengthens-e-commerce-and-mcommerce-regulation/ >

Trinh, T, November 10th 2015, Vietnam Ecommerce Developing, Viet Nam News, viewed
10th
March
2016, <http://vietnamnews.vn/economy/278289/viet-nam-e-commercedeveloping.html>.

UK Government, October 20th 2015, Oversea Business Risk-Vietnam, Government of UK,

viewed 9th March 2016, <https://www.gov.uk/government/publications/overseas-businessrisk-vietnam/overseas-business-risk-vietnam>.

Udo, G, Bgchi, K & Kirs, P 2010, An assessment of customers e-service quality perception,
satisfaction and intention, International Journal of Information Management, vol. 30, pp.
481-492, viewed 9 March 2016,< https://drive.google.com/a/rmit.edu.vn/file/d/0BMSgAkfuekHYV9jUW9ueGljb2s/view>.

Vietnam Embassy, March 10th 2016, Constitution and Political System, Embassy of
Socialist Republic of Vietnam, viewed 11th March 2016, <http://vietnamembassyusa.org/vietnam/politics>.

Sriratanaviriyakul, N, Nkhoma, M & Vo, HX 2014, MOX DEALS VIETNAM: THE FIGHT OF
DAILY DEAL SITES, Journal of Information Technology Education: Discussion Cases, vol.
3, viewed 8 March 2016, <https://lms.rmit.edu.au/bbcswebdav/pid-7028375-dt-content-rid15276199_1/courses/ISYS2110_16s1/Case1%20-%20Mox%281%29.pdf>.

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