E49: Vietnam’s digital shake-up: Threads, Facebook's fightback and the banking app boom
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It's also an opportunity right now in the sense that Threats is not being commercialized as much as other big platforms, right? So it's also a bit of a white space. And therefore, I think early adopters can really get something out of it. Welcome to You Don't Know Vietnam, the show that demystifies Vietnam for global audiences by talking to the creatives, trendsetters and business owners who are taking on the market.

Forget what you thought you knew about Vietnam. Guess what? It's no longer that, as you're about to find out. I'm Ian Paynton, co-founder of We Create Content, a content agency that helps global brands connect with Vietnamese consumers.

We make global brands relevant in Vietnam with always-on, hyper-local content. On this episode of You Don't Know Vietnam, I'm talking to Ho Thuy Thien and Thua Quis Thomason from market research agency Decision Lab. Back on the podcast, this time to break down their latest installment of the Connected Consumer Report.

Today, Thien and Thua talk me through the opportunity that is Threads in Vietnam and why it's growing so rapidly, among which demographic, and how they're using it. We explore the growing importance of audio platforms for marketing in Vietnam and the rise of live commerce as an essential strategy for brands, as well as its impact on e-commerce.

We also talk about the shake-up Vietnam's ride-hailing scene needed and how the lines are blurring between Vietnam's e-wallets and the apps of traditional banks who are really upping their digital game.

Tien oi, tua oi. Oi. How are you doing? Good, thank you. Thanks for joining me again on You Don't Know Vietnam. Decision Lab is in the house for the second time. We're super happy to be back and thank you for this unique possibility. I'm very happy this time to be joined by Bien, who's really the brains behind our operations on the connected consumer. Hi, Ian. Thank you for inviting us to join You Don't Know Vietnam podcast. I'm glad to be here today.

You're very, very welcome. Well, you know me, I love your Connected Consumer Report. And I know that it comes out every quarter. It's all about the digital landscape in Vietnam, how consumers are connecting. Tell me about the latest one. What's going on? So maybe before I dive into a fighting for the latest one, maybe I just have a quick introduction about Connected Consumer.

So Alconet Consumer is a quality tracking report and we have been doing it since 2019. And the report aims to provide the latest update about Vietnamese digital consumption to support brands and agencies in Vietnam to stay more connected with the consumer here. So the report will focus on the consumer online habits, including social media usage,

their digital activities and also their digital utilities. And the super cool thing today is that actually this is used by agencies, it's used by brands, but also just everyone pursuing a career.

or studying marketing or media. I was on the back of a motorbike for a food tour in Saigon, and even the girl driving the bike who was studying marketing, she knew very well what connected consumer was all about. You know that I love it. I like to summarize it on LinkedIn, and it's a really good resource to have every quarter. What are your findings from your most recent Connected Consumer Report, which I guess is from the last quarter of 2024, right? Yeah, we have three main key findings, but just dive into the most important

Growth one, which is Thread. You all know Thread, right? It's a platform as a business by Meta. It's a text-based platform similar to X, which formerly known as Twitter. So in Vietnam, Thread's current penetration rate is based on our latest data in Q4, 15% in penetrations. And Zenzy's enthusiasm contributes to about 27% of them. So the growth of Thread is still mostly driven by the youngest generations. For long time.

text-based social media has not really been a big thing in Vietnam. Twitter in those days never really took off fully as it has done in Indonesia and other places. So the interesting thing is you kind of get a social media platform that is defined by the audience.

So it's still discussions, it's still more tech-based social media, but it's all the young people in there discussing things, complaining about their TV series and things like that. So it's created a very different vibe than what we're used to from other platforms around the world. I agree because X never gets used in Vietnam, right? Whenever we have a brand talk to us about using X in Vietnam, I'm kind of like, don't even bother to a certain degree.

But Threads is really making quite a strong case now. I mean, I'm looking at the graphs and seeing the growth of Threads in Vietnam, according to the Decision Lab Connected Consumer Report. It's just risen rapidly, especially among Gen Z, hasn't it? So what do you think, Tien? Why is it popular among that audience? First of all, I think the integrations

Thread with Instagram and Facebook is one of the main drivers here because, you know, Instagram and Facebook, they are like the top social media platforms in Vietnam. So it's already deeply embedded with Vietnamese consumers. And the integration of Thread in that platform is also making it easier for users to jump from Instagram or Facebook to Thread. So it is their acquisition. And the second reason is that because it's integrated.

with other meta platform, it's kind of learn from the algorithm that the other platform have as well.

When you're in Thread, then you will be exposed with content that matches with your preference because they learn from what you have searched for or what you like from Instagram and Facebook. I think that's the two points that make Threads grow in Vietnam. That makes a lot of sense. So it's ease of entry because it's connected with meta. And also that good old algorithm on steroids is sharing people content that they know they like. Exactly.

How do you use Threads, Tia? Do you use Threads? Yes, I use it on a daily basis. It's actually one of my most used platforms now. So I use Threads mostly to update about showbiz, to update about music and entertainment. In terms of scrolling and consuming content or creating content? In terms of consuming content. If you could describe how the Vietnamese are using Threads, how would you describe it?

It's just from my personal observations, but what I observed from my colleagues, they use Thread to get the update information about the topic that they are interested in. For instance, one of my colleagues, she is deeply interested in matcha and also matcha locations, matcha coffee shop. And Thread knows that they've been exposed her with a lot of hidden matcha shops.

or specialty matcha chain and stuff to know exactly what you want what is your interest of content consumptions and what you're looking for on social media so it's been exported to you with those kinds of content yeah because i mean i go on facebook now and i'm scrolling through the timeline and there's hardly anything that i'm interested in facebook is doing really well in what what we call the mindless browsing right where you just follow reels or things like that where i think

both for X and for threats. The advantage is that you're a little bit more the owner of your feed and you can define who you follow. It's not necessarily just your friends, but you more follow people that you are interested in. And in that way, you're building up your feed in a more interesting way. You get something that I would say is more associated with a news feed more than just content just connected to your friends and family. Have you spotted many brands on there so far here in Vietnam?

It's pretty new to the market. So most brand, the early adopter on Pled tend to be brands that want to maintain as innovative or trendy, right? So these often include in brand that target the younger demographic like Zensi. So I see like some F&B brand, it's not like a chain of store and stuff, it

It's like Soko or some fast food brand like the Pizza Company. And I also see some media brands like Vyond, they are on threat. This is also the time to try and experiment because what we are pointing out here is that you can definitely get a certain demographic on threats and we can clearly see that it's growing. So it's really worth for brands to pick this up and to try and start building a following there.

And I think what is interesting in this world now where we have this plurality in social media platforms, I mean, if you go back years ago, no one would imagine that anyone could ever challenge Facebook. You had the network effect, you had all your friends there, but it's becoming a little bit less important that you have all your friends in one place because you can connect so easily on so many platforms, right? I think the interesting thing now is to figure out the mindset people are in.

when they are engaging on a platform like this. So they are doing different types of searching or browsing on a platform like Crept compared to what you'll find on Facebook, Instagram, TikTok. And I think it's really important that you start experimenting with this because you can't just distribute one type of content to all platforms. You need to really understand it and build something specifically that feels native. So it's an opportunity. It's a real opportunity for brands. It's going to take

effort though in the content strategy. Like you said, you can't just spray out the same content across different platforms anymore. You have to have a channel sensitive approach. But it's also an opportunity right now in the sense that Threads is not being commercialized as much as other big platforms, right? You don't see the thing, the level of advertising and things like that. So it's also a little bit of a white space in that sense. And therefore, I think early adopters can really get something out of it.

I think what surprised me about the latest Connected Consumer Report, and that was how popular YouTube seemed for audio streaming. The other thing that surprised me was how a lot of people have iPhones in Vietnam, yet Apple Music was quite low down on the list with regards to platforms on which people stream music. What's going on there, Thien? So for YouTube first, right? So just know that YouTube in general, not only YouTube music.

So YouTube, maybe one of the reasons why YouTube is dominant in audio and music streaming at the 75% usage rate can be attributed to the following effect. First of all, is that it has the vast music library. Like it's encompassing of both official audio from the artists and also the user generated audio, like remix and stuff.

And then it's also a growing platform for podcasts. Personally, I use YouTube to listen to music at work. Even people with iPhones then are choosing to listen on things like YouTube. For Apple Music, actually, maybe because surrounding us, we have a different income level. So that's why you see a lot of iPhone. But according to our data on profile, nearly 60% of Vietnamese are using Android as the operating system. And only 30% of them are

is using iOS, meaning that they own an iPhone or iPad or Apple product, which could be attributed to one of the reasons why Apple Music's usage rate in Vietnam is not high. And also, I think one of the reasons is that Apple Music follows subscription-based, meaning that if you don't pay for it, then you have no chance to listen to it or to explore the platform. Meanwhile, Spotify or YouTube or other local music streaming services like Zing MP3 or SoundCloud

They offer like freemium, meaning that the consumer, they have some time to test and learn the platform first before making the final purchase. So yeah, this is just talking from my perspective. It has also been interesting with Spotify. They've been really successful in recent years to really enter the market. And so build up is an impressive operation from their side to come into a market where a lot of the music is also offered online.

for free through many platforms that Spotify have actually been able to achieve quite some critical mass in this country. Whereas I think Apple Music seems to be much less aggressive in their work to enter the market because they don't have that free new model. They don't get the same easy adoption as what you see with Spotify and Spotify's competitors. When you then enter with a free new model for audio, this also represents for brands a new way to connect with audiences. So some of the work we did earlier was to look at

how Vietnamese react towards audio advertising and how you can get your message across because it's a type of advertising we actually haven't been that much used to. And a lot of brands in Vietnam, when they want to tell a story, they're used to telling it through video. And there are some interesting elements to it. And I think also especially coming back to some of these moods

you can connect to because when you listen to music, you do it in different kind of more passive situations. You do it at the gym, you do it while working, you do it while you are studying, maybe when you are going to sleep, when you're putting kids to bed. And it's quite interesting if advertisers can try to figure out which situation

do we want to advertise it? We saw one example where IKEA had been launching ads. This is really the dad segment I'm talking to you now. They've been running ads towards bedtime, where they were really quiet in their ads when you were playing lullaby for your kids, because they didn't obviously want to wake up the kids in that situation. And then later on, they would try and advertise maybe a pillow, something that could support you while you were putting kids to bed, right? It's quite a unique challenge in figuring out new creative ways to advertise to people, isn't it, Audir?

It is. It is.

Big campaign budgets have been built up around video. It's really a different way of thinking. And I think in Vietnam, you get this extreme catch-a-bottle effect. We are a very dynamic market. We're also very conservative in our ways of doing things. So it often takes a little bit of time to get to the stage where companies have adapted. So I think for audio advertising, you may see to a high extent that it's brands that didn't advertise on YouTube or a different kind of visual element who will try this out as a platform. Then you basically build a campaign around video.

audio and then requires that you creatively think about how to deliver through that channel. Which is a great time to go to an ad break. Exactly. You have an ad time to now? Not yet, but here's the slot that you can go in, Mr. or Mrs. Advertiser, if you're listening. Yes. There was something that I found quite interesting in the latest Connected Consumer Report, and that was about the rise of live commerce.

I don't know if you remember seeing last year that $3 million TikTok stream, which just went crazy all over the newspapers. To me, it seems like live commerce has been becoming a thing for quite a long time. What is your latest report said about this? We have been observing the rise of live commerce since the middle of 2024. And we believe that live commerce in Vietnam has now transitioned beyond the experimental phase

It's now become more essential online shopping method for the Vietnamese consumer here. First of all, the live commerce concept is a mixture of online shopping with live streaming for those who don't know. So per our data, then TikTok and Facebook grow in live streamings. While TikTok has a really strong performance in live streaming last quarter and become the most preferred platform. However, for this quarter, Facebook make a comeback in live streaming preference.

So now they are the most preferred platform for live streaming. And these findings align with what Facebook recently launched. They recently developed more live shopping features to support streamers and then shoppers to shop on Facebook, especially when doing streaming.

But I remember having seen people doing live streaming, selling things on Facebook for like the last five, six, seven years, right? So what's different? So the difference here is that for the new feature, first of all, they have the shopping cart button that you can directly showcase all of your products that you are going to stream for the viewer. And it's also integrated with Messenger for automated delivery status. So it will update you of the status of your purchase via Messenger. That makes sense. And can you think of any...

brands that have been using the Facebook Live shopping feature really well? Or is it mainly individuals and small shops that you've been seeing so far? Maybe I will discuss the key driver for live commerce in Asia first. So I just read an article by Fork.

One of the key drivers for live commerce in Asia, why live commerce is such a boom here, is because of the fandom culture. So I think in Vietnam, the majority of the brands are currently executing this concept by collaborating with streamers or influencers or well-known people for mega live sales and stuff.

First of all, it will create a more dynamic shopping experience for the shopper. And second of all, it builds trust because there's like an authentic, trusted KOLs and influencers there to promote the brand product. So it's really beneficial for low awareness brand or local brand. But if you're talking about big brand, my personal for you page on TikTok, then I have been exposed to L'Oreal's live streaming quite frequently. So I believe that they host the daily stream.

And for some specific event, like double days or salary bonus day and something like that, they will have

uh, celebrities joining the live stream as well, just to leverage the fandom culture. L'Oreal is a super interesting case to follow because a lot of what they build up in live streaming globally actually are written from Vietnam. They've been quite successful in getting this market years ago to turn more and more of their e-commerce into live streaming. Well, so they were doing it pretty much before most, were they?

L'Oreal in Vietnam were doing it the foremost. When we look at it as a research consulting firm, who are able to do it at scale, right? So of course you will have a startup,

someone who can turn around in 24 hours and make use of it. But it's interesting when you get someone who succeeds at a large scale. And I think there the L'Oreal example is interesting, but it's also a bit of an inspirational story for Vietnam because before live commerce, we had social commerce as a phenomenon in Vietnam that's closely connected just with how we in Vietnam shop and interact and engage with people. And L'Oreal, they started to utilize this together with the high online penetration in Vietnam to build their e-commerce strategy very much around

And this has become an inspiration for how they do it in the rest of the world as well. So in that sense, you can see Vietnam becomes a super interesting test market because we have the high online penetration, we have the high technology adaption, and we have super innovative people in the companies here who are figuring out ways to get this done and turning around pretty fast.

I think global audiences, especially from perhaps my home country in the UK, might be a little bit surprised by live commerce, especially the older generations. Because essentially, it's kind of like shopping TV. Do you remember shopping TV? My hypothesis here is also that from when e-commerce started happening, the question was, how do you take...

commerce from offline and you move it onto online with a value add of maybe discount, cheaper products, easy delivery, more assortment, things like that. But it has always been a little bit of a death experience. And I think when you go shopping on Main Street, right, and you go into shops and you feel things and you talk to the people there, kind of taking that experience

And moving it online has been really, really difficult. And I think live commerce now, it gets the experience back in shopping within the e-commerce space. And then when you do it in a dynamic market like Vietnam, people are more ready to take on this kind of commerce and to adapt to it. I think it's super interesting. And I think, Ian, that's why people listening to You Don't Know Vietnam should really consider working with We Create Content here to really test out in this exciting market. That was your second advertising break. Thank you.

Another thing that particularly interested me about the latest Connected Consumer Report was the inclusion and growth of Sang SM. Is this the shake-up that ride-hailing needed? What's going on there, Tia?

We think so. For our latest data, then Sengit M experienced another significant growth. Like throughout the year, the growth rate is always significant. So for this quarter, they're reaching like 50% in terms of usage. So it's closing the gap with graph, which is at 63% of usage rate. And then when we're breaking it down by preference rate, then Sengit M saw the most significant increase in the car ride-hailing service.

And the increase is driven by Zen-Z. So more young people are using Samy SM cars. Yeah. Do you think they're buying into the electric vehicle narrative?

I think this could be one of the reasons why ZEN-Z prefers S&M more than Grab now because of the value added experience that they gained. There's another research that we did along the side called Index of Consumer Confidence. And from that research, we conclude that the pricing is not the main reason for ZEN-Z brand choice anymore, but value added for the experience, especially what resonates with

their personal value or what are they believe will more likely to generate their purchase. Right-hailing for quite some time has been a race towards the bottom. It's really been about being competitive on price. I think a lot of these companies have had difficulty finding a growth driver

That is about value. And what Vingroup has been good at is always trying to define within the Vietnamese market a new standard for living. I think they're really translating this into MSM in terms of generally higher quality of cars and the green element, right? So daring to add something new into the market. And I think that Grab is also offering that gain. There's a little bit more features so you can get a more premium ride. And I think that's going to be an interesting development for all of us using them.

I was not talking about like premiumness. I was leaning more towards how Sang SM mission is to deliver like greener Vietnam, right? So they have campaigns regarding if you write Sang SM and you can contribute to how many percentage of CO2 reductions or I remember like pre-tape, they have a charity campaigns

So if the user can acquire another user to download SingSM, then they will contribute to a certain amount of money to the charity fund to support the one in need. So this is the value added experience that I'm mentioning here.

Generally, I think people talk about Vietnam being an extremely price sensitive market. So it's really interesting to hear what you say there about people don't mind paying a little bit extra if it aligns with their values, if there's a slightly more spacious car, maybe a newer car and more comfortable car. Without the risk of doing too much advertising here, I think that's also where brands are using maybe not enough market research. Because we end up being in a situation where products become generic, where

where you look a little bit too much at your competitors and try and copy too much what they're doing. And therefore, you can see within retailing, within banking, within a lot of sectors, products become generic. And when products become generic and you can't differentiate, then it becomes all about price. And what companies really need to do is to do more innovation based on customer centricity to really dive in, understand the needs, figure out, well,

do people actually want a better ride or do people want to have a greener ride or more on time or willing to pay a little bit more for this and that in order to innovate in that sense because otherwise it really becomes a race to the bottom

I agree. I think differentiation based on actual insight, I think is the way forward. Otherwise, everything starts looking the same, feeling the same and competing on price, which we know all too well as an agency, you know, content kind of became a commodity and you easily get undercut. So I think it's about price.

offering something different based on insight. I tell you what would make me switch to Sang SM though, if they would include those little Jeeps, the yellow ones, I like them. I wouldn't mind rocking up to work in one of them. I'm going for a test ride soon, but my wife is really into them. But I would just assume that you would need to drive them yourself. I don't know how big the backseat is.

It might be a challenge. And for anyone listening that doesn't know what we're talking about, what was the name of the vehicle? The VF3. And I think anyone Googling them needs to Google their customizations because it's absolutely fantastic what people are doing to that car. Now, I know that, Thu, we talked about this when you were last on You Don't Know Vietnam. I know it's a subject quite close to your heart.

What's going on with regards to banking apps and e-wallets? What's the data saying in the latest report? One will lead the category at 60% usage, but also stagnating throughout the year. When you look across the different e-wallets, generally we see a stagnation in the penetrated world. The only ones really hitting it off, that's the banking apps.

where penetration is increasing. We don't pass to the specific banking app. The bank-owned apps have seen an increase and they are now at 26% penetration rate. What is going on here is improved banking apps, but also the huge increase in users of QR codes in connection with your banking app. Everywhere you can pay now with your QR code. And the fact that people can also generate that code within their own banking app also means that every street seller, whoever you meet, you'll be able to connect with in that sense.

So that's kicking off and I think that will lead to a lot of new competition. Because when you also see the stagnation, what we read in trade is that we're also reaching a saturation in how e-wallets operating that is no longer key for them to just increase the number of users or the penetration in the market. It seems like the bulk of profitability for these apps will no longer be dependent on the payment themselves.

but you're seeing partnerships mushrooming all over in the financial services industry. And whenever we talk to players in the financial services industry, we try really to bring them out of either their bubble and say, "Well, everyone's trying here to compete against everyone." So Momo is creating collaborations with the investment apps, they're collaborating with insurance to tie everything in order to present it in front of the users they have and in order to monetize those users. And I think that's a very natural development.

for apps with this kind of penetration who wants to move towards becoming a tube app. At the same time, a lot of the challenges have also been good. Like Salopay, for example, they have been very strong in using their user base from Salo to build up Salopay as an app. Shopee has been better at doing it as well. So you see the user space being challenged and it's much more about the services nowadays.

So if I'm hearing you correctly, a lot of the e-wallets are providing more services, almost like perhaps a bank might? Yeah, but in many ways, I think the interesting thing to consider here is if you look at you and me growing up in Europe, right, then the point where you become interesting for the bank, that's when you start purchasing property and you get a mortgage and then you become a valuable customer.

Therefore, for banks in Vietnam, they tend to start relatively late with acquiring customers in their journey.

And so far, they have not been threatened by a Sello Pay, by Momo and by these apps. But if you look at the point of view of agency, or let's say I'm a student and I drive Grab as a part-time job, right? Then I might be able to convert my salary directly onto Momo through a transaction. I do all my payments there. I can follow my budget. I can do things like that. And suddenly, Momo becomes your primary financial service provider.

And while they are not at this point, the bank, you can see the lines really blurring.

From the point of view of a bank, what is a little bit the tricky thing about these competitors is that they will really understand their users very well. They will be able to handle things that are non-core financial services, like how do you do your budget? How do you save up for the end of the month? How do you share your bill with someone else? Things like that, that are not traditionally taken care of by a bank, but that helps, you know, speaking to many of the concerns that especially younger financial service users have.

And I think in that sense, as they innovate, as they develop their services, they will grow to become more and more a threat of the established players. But in Vietnam, the established players are not that old and gray. Generally, a European blue bank will never move anywhere unless they're really pushed. And in Vietnam, we see, as I just explained, growth in penetration payments with QR code that in such a simple way have been able to challenge...

e-wallets to their core, right? You see the apps being developed by some of the major banks in Vietnam. We're getting very cool things of software that can really solve a lot of their needs for their users. And then they will be able to leverage the trust behind their brand. They can bring you forward. So I think they will not be left behind where the competition will be coming from everywhere.

Now, I usually end the episodes by asking you what are you most excited about for Vietnam's future. But I'm going to switch things up. I'm going to ask you, what should we be looking out for for the rest of this year, do you think? What are the trends that we should be watching? From my perspective and also from what we have been observed throughout the year, then I think Threads is one of the channels that the Vietnamese agency and brand should look out for. Because Threads

As you currently know that Zenzy is the main dominant for the platform, right? But Zenzy is also known as the trendsetter. They will consistently shape the digital landscape on platform because we previously see that on TikTok and YouTube as well. It starts from Zenzy and then it's paved the way to other generation ads as well. So I think Thread could be a potential platform to grow for other generation as well, not just Zenzy. I think that Thread is going to be one of the top social media platforms in Vietnam.

From my point of view, what I'm really hoping to convince PN to do is to add AI tools that are broadly used in Vietnam.

because we talk a lot about how AI will revolutionize everything. But what is interesting in our Connected Consumer Report is to follow all the popular apps, see how they're used, and it will be really interesting to see how broadly tools like JetGPT, DPC are used in Vietnam. What are the use cases? Also, as they start to be monetized more and more. The other thing, coming back to financial services, I'm really interested in seeing how this QR game will develop.

These QR codes that everyone is suddenly using everywhere is almost too good to be true. I mean, it's so simple, right? There must be innovations, new steps, competition getting into that. So it's really quite interesting to see what will happen to QR codes and the way traditional banks suddenly have this direct access to vendors all over the country.

We have to look out for live shopping as well because we can clearly see that Facebook, they just take the concept more seriously, right? So meaning that the competition for this concept in general, it just started. So I think in 2025 and also in the future, live shopping and live commerce will become way bigger things. And just for my last point is the rise of value-driven consumerism, similar to what Stengas and Up are.

offer to the consumer nowadays, especially when Zensi, they now entering the labor market. They are now having more in attendance in the way they spend things and they are likely to shape the consumerism as well. So I think brands that could do value added experience

Who's there now from the competition, Melody? What are you excited about, Ian? Oh, it's funny you should ask. I've spent a bit of time in Singapore. Yes. And I really feel like I'm hearing lots of conversations about Vietnam being taken more seriously as a growth market from this part of the world. So I'm quite keen to spend more time in Singapore, banging down some doors and...

As I said on LinkedIn, banging the Vietnam drum and trying to help more global brands get to know Vietnam, enter Vietnam and connect with Vietnamese consumers on a daily basis through content. You've been listening to You Don't Know Vietnam. I'm Ian Paynton from We Create Content. I'd like to thank DJ Jace from The Beat Saigon for their epic soundtrack and a massive thank you to you for making it all the way to the end.