Vietnam relies on Facebook to kick-start businesses

In this picture taken on November 28, 2013, a man uses a laptop at a coffee shop in downtown Hanoi, Vietnam. (AFP Photo/Hoang Dinh Nam)

Quang Dang built a business with 200 staff selling lipstick and perfume. His secret to success? Once-banned Facebook.

Like a growing number of Vietnamese, the 25-year-old turned to Facebook to put money in his pocket as getting his own physical shop proved out of reach. With just 223 dollars in savings, the high school educated entrepreneur got his start hawking cosmetics to friends on the social network.

Vietnam has a complicated relationship with the social network. Once blocked, and still scrutinised, it has attracted the ire of authorities keen to preserve communist rule while becoming an avenue for budding entrepreneurs since access was restored. The majority of the country’s 95 million use it to share personal information, make work connections and now get rich. While the government continues to police content, Facebook is becoming increasingly important to rulers trying to jump-start the economy.

“The government has a self-contradictory position toward Facebook,” said Vu Tu Thanh, chief Vietnam representative of the US-Asean Business Council. “Ministries responsible for economic growth would like to promote this. To those whose tasks are to control challenges to authority or the legitimacy of the state, Facebook just stands in their way.”

In recent years, Vietnam has opened its doors to Silicon Valley, including Alphabet. That’s unlike China, which blocked Facebook, Google and Twitter, paving the way for local services such as WeChat, QQ, Baidu and Weibo to flourish. While Vietnam’s leaders have pushed for a homegrown social media platform, that has never taken off.

Quang, whose father struggled to support his family as a taxi driver, operates four cosmetic shops and a spa in the country’s commercial hub of Ho Chi Minh City. He uses Facebook accounts with more than 200,000 followers to market his business.

“The only way I could succeed was by using social networks,” he said. “As long as Facebook exists, my business will keep expanding.”

Facebook doesn’t provide payments services in Vietnam, instead customers order through Quang’s page and pay the delivery driver, usually in cash. That pattern is repeated across thousands of other pages on the site.

The ease of using Facebook is a powerful draw in Vietnam, where bureaucracy for both online and offline businesses can be cumbersome and expensive. Entrepreneurs who want to set up a website must pay a fee, endure an application process that can take months and risk having businesses shut down or fined for violations under many vague rules.

“If you open a shop on the street, you will be hassled by a dozen authorities a week,” Thanh said.

Vietnam’s youthful population – almost 60 percent are under 35 – is drawn to Facebook and the country has become one of the leaders globally in terms of penetration of social networks, according to Monica Peart, senior forecasting director at EMarketer.

An example of that is Ma Hoang Son, 29, who quit his job at a construction materials company in 2011 to start a Facebook business selling clothing accessories and now has multiple pages with at least 100,000 followers.

Vietnamese spend more time on the social network than users in most other Southeast Asian countries and are much more apt to use it as a platform to start a business, said Joe Nguyen, ComScore senior vice president of Asia Pacific.

“We haven’t seen this scale in other places,” he said. “Vietnamese are very entrepreneurial. Everyone wants to try to sell something.”

Vietnam’s government, like others in Southeast Asia, remains wary. Thailand asked local internet providers to coordinate with the Menlo Park, California-based company to accelerate the blocking of illegal content. Indonesia is asking Google, Twitter and Facebook to monitor and filter content related to terrorism, racial violence, pornography and child abuse.

Facebook offers workshops on using technology to support small businesses in Vietnam, the company said in an emailed statement. It declined to provide details of how Vietnamese use its site. Facebook has agreed to delete hundreds of accounts the government deems harmful to Vietnam, according to Prime Minister Nguyen Xuan Phuc. While that was part of a campaign against “fake news,” it also raises questions about the company potentially helping to censor government critics.

The social network, which has a process for governments to report illegal activities, removes content such as fake accounts and hate speech that violate its policies, Facebook said in a statement.

Facebook faces a similar problem to Apple in China, which has seen the iPhone maker remove apps and build local data centres to meet government requirements, said Tim Bajarin, president of technology consultant Creative Strategies in Silicon Valley.

“It is a delicate dance for both of them,” he said. “If they can’t find a way to work within these countries’ laws, even if they are often not in line their own freedom of speech mantra, they will risk being shut out.”

With the government committed to opening economic borders, it realises that global platforms can be invaluable. E-commerce accounts for 10 percent of the economy, according to economist Nguyen Tri Hieu. Businesses started on Facebook employed 2.3 percent of the working population, or about 1.1 million people, during the first quarter, according to government data.

“Excluding elderly and children, most people in Vietnam use Facebook, which now has a huge influence on society,” said Le Quang Tu Do, deputy head of Authority of Broadcasting and Electronic Information under the Ministry of Information and Communications. “The growth in Facebook users creates favourable conditions for youngsters to start their businesses.”

Still, the government is concerned about what it considers negative influences. It has used its influence to suspend advertising on YouTube and other sites showing anti-government videos. And authorities have stepped up arrests of bloggers critical of the state since 2016.

The government has to strike the right balance because pressure on social networks can backfire, said Rob Faris, research director at the Berkman Klein Center for Internet & Society at Harvard University.

“The threat of shutting down sites, even if temporary, will inhibit investments in the digital economy and hamper innovation,” he said. “As more people conduct more of their lives on large platforms such as Facebook, the cost of blocking Facebook increases.”

Indeed, as it becomes more embedded in Vietnamese life, the government will find it harder to install limits because of the impact it would have on people like 25-year-old Cam Vu. His startup selling watches led to a chain of spas across the country that now employs 300 and he is expanding his business in Cambodia, Laos and Myanmar.

“Using Facebook is now part of Vietnamese culture and it has become a true gold mine,” Cam said. – Bloomberg

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