Vietnamese Growing E-wallet Market: MoMo And Friends

This article argues that the sector of e-wallet will witness strong development in near future and takes a look at how its most prominent player - MoMo - runs marketing campaign against other competitors. 

A NEW DEFINITION

People used to think of wallet as a leather pouch that holds stacks of cash and rows of cards. But with digitalization fast approaches, wallets, or e-wallets specifically, seem to hold a different meaning than before. Now, it is an app linked with a partnered bank and acts as its extension to support users with various utilities and hefty promotions. And this e-wallet sector is poised to huge growth potential, albeit a small and new market at the moment. Therefore, this essay will take a look at the e-wallet landscape and how its top player, MoMo, does advertising.

AN UNTOUCHED GOLD MINE

E-wallet is still emerging recently. There are currently 27 non-bank institutions that provide middleman payment services, 20 of which offer e-wallet services. And the most well-knowns include MoMo, Payoo, Moca and Zalo Pay (VNExpress 2018). Vietnam News estimates that this market only has 10 million users (10.3% population) and transactions value at 53.1 million VND, VEN reported. Simply put, e-wallet is still in its awareness phase.

However, there are various factors that portray a booming future market. The first being administration plan for 2020. Vietnamese government aims to reduce cash payment to less than 10% by next year, which opens up great opportunities for alternatives like bank transfer and e-wallet. However, e-wallet is predicted to benefit the most. Understandably, e-wallet, requiring only a smartphone and built-in QR feature to use, offers the most convenience, beating out others like card or bank transfer.

Rising smartphone users is the second pointer. According to Appota’s 2017 report, 42% Vietnamese population owns a smartphone and 45% uses mobile Internet. Moreover, smartphone penetration rises rapidly each year, reaching up to 72%. However, having a phone is not enough because one needs readily Internet to use e-wallet. Luckily, figures are in favor as 52 millions have subscription to 3G/4G plans and this number is expected to climb.

More and more Vietnamese start to integrate smartphones into their daily lives

Finally, the last deciding factor is users themselves. Millennials and Gen Z, e-wallet primary users, account for up to 47.4 million Vietnamese (Kantar and Decision Lab) who are busy, compulsive smartphone users with a liking for convenience and technology. All these factors add up to a beautiful future for e-wallet. But for now, this article will focus on their ad landscape, or more specifically MoMo e-wallet.

MARKET SHARE EXPANSION TACTICS

MoMo approached this goal through 2 advertising tactics, promotions and product education.

MoMo, short for Mobile Money, was the first to enter e-wallet scene in 2010. Initially, M_Service (MoMo’s parent) partnered with Vinaphone to provide standard services (phone bill payment, call top-up) for their SIM users (Thu Ngan 2015). But that model was a dead-end with complications and little growth space. So in 2013, M_Service took a leap and launched MoMo app on iOS/Android. From then on, MoMo reigned as most used e-wallet in Vietnam with more than 5 million users in 2017, VNExpress reported.  

And it’s interesting to see how they advertise themselves to audience. It starts with the objective. E-wallet is a young market far from saturation. So, obviously, companies want to have the biggest bite of this cake - they want to gain market share. And MoMo approached this goal through 2 advertising tactics, promotions and product education.

Promotions work in many levels. First, MoMo has extensive networks of banks and retails and utility companies, thus countless options for users to choose and be taken care of. Plus, their interface is rather intuitive and easy-on-the-eye. So the battleground lies in getting customers to try out their app. And what better way to extract users than spoiling them with promotions? MoMo bombards users with countless discounts and offers to get them to download the app and trial use. Once they did that, MoMo convenience would take care of the rest. The company mostly advertises promotions via Facebook page. It acts as a newsletter that updates promotions daily, with up to 2-3 posts/day. The second rationale is target audience behaviors. Gen Z and millennials are deal hunters that prey on the best value at a given price (Kantar 2018). Hence promotions would strike them as good bounty and start trial with MoMo. Also, promotions work well in retaining customers, preventing them from switching to other e-wallets.

MoMo's Facebook posts updates countless promotions and discounts from the company

M_Service next strategy is product education. Since e-wallet is still in first stages, where users don’t full grasp the concept and its benefits, so their message has to be product-oriented to get them aboard. MoMo constantly educates audience about e-wallet convenience and its advantage on other competitors. This message translates onto countless viral videos, campaigns, and social media posts consistently since its launch in 2013.

Viral videos promoting MoMo features including money transfer (Chi Tai clip), POS payment (Suni Ha Linh clip) and phone top-up (Isaac clip)

BUT FACES GROWING COMPETITION

Newcomers don’t have the luxury of time or venture like MoMo to go the distance. They must disrupt market to quickly gain grounds and pull ahead. For instance, think of 2016-born ZaloPay and digital lucky money campaign in 2018, which allowed users to give lucky money with quirky messages and even customize their red envelopes. The end goal is similar to MoMo, getting consumers to download and try out the app via this feature. The campaign was a success with 80,000 envelopes sent in the first 12 hours and a total of 1.3 million enveloped but no stats on new users (Huu Tuan 2018). ZaloPay also leverages on VNG ecosystem to tap into Zalo Messenger database to increase market share.

(Top) - ZaloPay interface for digital lucky money campaign;

(Bottom) - Viral video for the campaign featuring My Tam

Moca is another example. Their move resembles ZaloPay in that they partner with the tech giant - Grab to approach million Vietnamese users while Grab can rely on Moca for local know-how and access to licenses (Fintech News 2018). Currently, the duo are running the promotion 500 'Vua tien vua loi' to get customers to land the first touchpoint with their customers, get them to try GrabPay by Moca.

BACK TO THE FUTURE

E-wallet market will grow in years to come, definitely. Meaning competition will be fiercer and more disruptive. Therefore, MoMo, besides their usual approach, should consider a disruptive, insightful campaign to further establish their position as market-lead.

REFERENCE

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Curtis L., ‘What brands must know about Generation Z in Vietnam’, Decision Lab, viewed 2 May 2019, <https://www.decisionlab.co/blog/vietnam-what-brands-must-know-about-generation-z>.

Fintech News 2018, ‘Mobile Payments in Vietnam: End of 2018 News Roundup’, Fintech News, December 7, viewed 2 May 2019, <http://fintechnews.sg/26934/mobilepayments/mobile-payments-in-vietnam-end-of-2018-news-roundup/>.

Hữu Tuấn 2018, ‘“Cuộc chiến” giữa các ví điện tử’, BrandsVietnam, March 7, viewed 2 May 2019, <https://www.brandsvietnam.com/14852-Cuoc-chien-giua-cac-vi-dien-tu>.

Kantar 2018, ‘Vietnam: Into the minds of millennial shoppers’, Kantar World Panel, September 24, viewed 30 March 2019, <https://www.kantarworldpanel.com/vn/news/Vietnam-Into-the-minds-of-Millennial-shoppers#downloadThankyou>.

Ngoc Thao 2018, ‘E-wallet services in fierce competition for Vietnamese consumers’, VEN, July 2, viewed 2 May 2019, <http://ven.vn/e-wallet-services-in-fierce-competition-for-vietnamese-consumers-33346.html>.

Statista, ‘Vietnam E-Commerce’, Statista, viewed 2 May 2019, <https://www.statista.com/outlook/243/127/ecommerce/vietnam>.

Thu Ngan 2015, ‘MoMo không cạnh tranh với ngân hàng’, VNExpress, September 11, viewed 2 May 2019, <https://vnexpress.net/kinh-doanh/momo-khong-canh-tranh-voi-ngan-hang-3276686.html>.

Vietnam News 2018, ‘Foreign investors eye Việt Nam’s e-wallet market’, Vietnam News, September 25, viewed 2 May 2019, <https://vietnamnews.vn/economy/466445/foreign-investors-eye-viet-nams-e-wallet-market.html#ig4SLyyGQophjsiA.97>.

VNExpress 2018, ‘Make or break time for Vietnamese e-wallet’, VNExpress, September 17, viewed 2 May 2019, <https://e.vnexpress.net/news/business/industries/make-or-break-time-for-vietnamese-e-wallets-3810062.html>.