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Digital the path to success

Released at: 09:58, 08/03/2019

Digital the path to success

Photo: Viet Tuan

The digital economy has opened the door to more women successfully running their own business endeavors or moving into senior management positions.

by Nghi Do

Dream Viet Education, owner of Kyna, a Vietnamese e-learning platform, received its second investment from CyberAgent Capital, the SEAF Women’s Opportunity Fund, and others in late January. The Ho Chi Minh City-based company will use the new funding to grow Kynaforkids.vn, its second platform, upgrade its technological infrastructure, and seek to gain greater market share. In its five years, the company has attracted more than 600,000 users of all ages. Education technology (Edtech) is revolutionizing the way adults and children learn and Kyna is a leader in using it to help people fulfil their educational aspirations. “We have been impressed with how women entrepreneurs in Vietnam are embracing data analytics to serve their customers,” said Ms. Jennifer Buckley, Senior Managing Director at SEAF. 

Typical models

Kyna’s journey to becoming one of the leading e-learning providers for adults and children in Vietnam began prior to its establishment in 2013. At that time, Ms. Tram Ho, Co-founder and CEO, worked for Cyberagent Ventures (now CyberAgent Capital, a leading technology venture capital firm in Vietnam and Southeast Asia) and gained experience in the internet industry, which then gave her motivation and a belief in the potential of tech companies in Vietnam. Leaving CyberAgent Capital, with the other co-founders she decided to establish an e-learning company, where people can leverage technology to transform one of the largest industries in the economy - education. 

The Organica Investment JSC, a Vietnamese retailer and wholesaler of organic and natural food and beverages, successfully secured funding from SEAF just recently. Organica was founded in 2011, when Ms. Pham Phuong Thao, a health-conscious young mother, acted on her conviction that everyone has the right to clean, safe and healthy food. Recognizing the inadequacies of Vietnam’s conventional food system, Ms. Thao and her like-minded associates focused on building a prototype organic farm as a role model for the farming community. 

Three years on, Organica has two company-owned tropical fruit and vegetable farms and five retail outlets in three cities selling its products and other imported organic food. From the beginning, applying technology has played a key role in its operations and marketing activities, with the company investing substantially in websites that support shopping between retail stores and websites or via phone calls, etc., allowing customers to approach a retailer’s products easily and rapidly. Applying a traceability system - Traceverified - helps customers check all the processes, from cultivation to transportation, through scanning the codes of products on to a smartphone. 

Another internet-based company, Cho Tot, one of the leading e-commerce sites in C2C marketplaces, recognized that tech innovation in operations and management enables it to empower a highly autonomous engineering culture, build fruitful collaboration across departments, and better evaluate the company’s business performance. The company owns an enormous amount of data on market trends and consumer behavior. By harnessing the power of business intelligence (BI) machinery, it ensures that all data readiness is fully automated and visualized to help improve the user experience, such as constantly recommending relevant content and speeding up the search and browsing process. 

Cho Tot heavily invested in AI for its ad review system in order to increase the quality of ads and reduce the workload of the ad review team. With this technology, it can quickly classify ads into categories and promptly and accurately detect ads posting low-quality products to minimize the number of suspicious vendors. Launched in 2012, Cho Tot now receives over 43 million visits each month and conducted a total of 3.5 million successful transactions in 2018. “Technology has helped us do less and achieve much more, in terms of positive impact,” said CEO Ms. Nguyen Ngoc Hai Duong.

Seizing technology

Ms. Duong is one of nearly 20,000 women leading businesses in Vietnam and in the minority in operating successfully in the digital era. Some have fully utilized modern technology to conduct business. Cho Tot entered the market in 2012, when online shopping was in its infancy in Vietnam but gradually gaining in popularity. At that time, Ms. Duong joined 701Search - the parent company of Cho Tot - and was then promoted to key positions and is now CEO, seizing opportunities in e-commerce to expand market share in Vietnam. 

As a female CEO, Ms. Duong saw that mobile and digital technologies offer Vietnamese women a way to bypass some of the traditional cultural and mobility barriers. Digital technologies create an online workplace in which every woman can work flexibly and remotely. They can access business data, interact with clients, service providers, and customers, discuss critical items with investors and shareholders, and eventually make business decisions timely and quickly. “The digital economy empowers women to take on higher positions at corporations, especially senior management positions, or even build their own startup and offer valuable products to society,” she said.

In Ms. Tram’s opinion, the digital economy and technology have given women more opportunities to build their own companies and manage them better. With advanced technology, female CEOs can track daily key performance indicators (KPIs) easier, on time, anywhere, anytime they want. In Kyna’s case, it has its own online system to track the company’s KPIs and those of different departments in real time. “I can track daily performance online, which gives me the chance to strike a balance between work and family,” she added. 

Moreover, according to women leading local enterprises, the digital economy has helped various new products and solutions reach customers faster and more easily. Although the environment is more competitive, new companies and new products now stand a better chance of reaching customers compared to previously. “As the world becomes more connected and the internet is applied in all areas of life, the application of technologies in business management has become mandatory,” Ms. Thao said. “Technology makes management easier, more automated, and more transparent.” 

SEAF views the digital economy as an indispensable part of its emerging market investment strategy, given the increasing rates of internet penetration and smartphone use. Kyna and Organica are two of three women-led businesses invested in by SEAF in Vietnam, joining its 400 or more investments in some 30 emerging markets and expressing their belief that women-led businesses represent excellent opportunities for equity investment. 

Roadblocks to success

Supporting finance for women-led businesses, Ms. Buckley said there is a significant financing gap for women-led businesses worldwide and this is also true for Vietnam. Even when women entrepreneurs qualify for a bank loan, they tend to receive less than what they asked for than men. According to online statistics from market research portal Statista, the financing gap is estimated at $1.19 billion for women-owned small and medium-sized enterprises (SMEs) in Vietnam. Based on further research, SEAF estimates that over half of women-led SMEs in Vietnam are not able to obtain the growth financing they require.

Both globally and in Vietnam, there are several reasons for this financing gap, Ms. Buckley added, including factors that relate specifically to women or gender. These factors can include women entrepreneurs not having as much access to assets to pledge as collateral for bank loans and women business owners not having the same deep network and relationships with financial institutions, which can be so important in obtaining financing. 

There can also be a gender bias in terms of risk capital providers, believing that women are more risk averse and hence not as suitable for risk capital such as an equity investment. “Addressing the challenge sometimes does require a mentality shift for female entrepreneurs, but investors should also make the effort to examine their biases and assumptions as they assess male and female entrepreneurs,” said Ms. Shuyin Tang, Partner at Patama Capital.

With better financial support from its investor, Organica is overcoming the difficulties faced by all startups in a new field, from developing its customer base to adding product categories, opening more sales points, and managing personnel. Ms. Thao said that in the context of technology rapidly changing customer relations, traditional marketing channels have become ineffective but embracing new channels can be problematic. “Lacking capital and human resources is difficult for large businesses but much more so for small businesses,” she said. “Businesses should focus on social network marketing channels to reach customers, because the cost is relatively low and there is a greater opportunity to compete with large companies.”

The digital economy also demands management teams with excellent soft skills, which are often possessed by female managers and include a higher sense of responsibility towards the wider community, greater empathy, more effective communications, and a greater willingness to adapt to constant business changes, according to Ms. Duong. These core requirements of the digital age will pave the way for more women to step up and take on top management roles.

“SEAF is very confident that our investments in women-led businesses in Southeast Asia and in Vietnam will result in growing sustainable businesses that will benefit not only their customers and investors but also their employees and communities. We are very bullish on the women entrepreneurs we meet daily, who are ambitious and responsible and all-in with their business’s mission. As a mission-driven, commercial investor, this is very important to SEAF.”
Ms. Jennifer Buckley, Senior Managing Director of SEAF

“The digital economy is opening many doors for Vietnamese entrepreneurs in general and female entrepreneurs in particular. According to the Topica Founder Institute, Vietnam attracted the highest amount of capital ever into startups in 2018, mainly driven by the digital economy. Hence, we have no doubt that it will create more opportunities for female entrepreneurs to reach the mass market cheaper, faster, and through more creative ideas.” 
Ms. Shuyin Tang, Partner of Patama Capital

“Technology is actually changing too rapidly for many people to grasp. We don’t know how advanced our technology application is and how it can be applied to our business. Only one thing is certain: if you don’t apply technology in your business, sooner or later your business will lag behind. We are also trying to observe technology and application changes in terms of allowing those changes in our business.”
Ms. Pham Phuong Thao, Founder & CEO of Organica

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