Why big Western tech companies have made it in Vietnam but not China

Oftentimes, people like to compare Vietnam with China. In some ways, the similarities are pretty obvious. The Chinese dynasties ruled Vietnam for one thousand years. Vietnamese people celebrate Lunar New Year, and our names have Chinese roots. But online and in the tech industry, things look really different.

In Asia, there are four communist countries: China, Vietnam, Laos, and North Korea. Laos and North Korea are so small they’re not really on the tech map (even if North Korea is finally using mobile internet). That leaves China and Vietnam. In China, Baidu, Tencent, and Sina Weibo are the search and social media giants. In Vietnam, Google and Facebook are tops and Twitter isn’t blocked. What happened?

Search

China began interfering with Google’s search service in 2010, and it frequently fails to load but is not fully blocked. It’s due to China’s effort to manage the content that the majority of its population has access to; it’s also, some have argued, a big part of the protectionist success of Baidu and Sina Weibo who fill the shoes of Google and Facebook/Twitter. Today, Baidu gets an average of five-billion search queries per day, and Google gets over 100-billion searches per month. But with Google partially locked out of China (it’s still the fifth most used search engine there), Baidu basically has near-exclusive access to the biggest market in the world.

In Vietnam, Google.com.vn is the number one search site and Google.com is number three. Vietnam has some new locally made players like Wada.vn and CocCoc, but they’ll have a hard time up against Google’s dominance. In the mid 2000’s, Google was already slowly creeping into Vietnam. YouTube was and still is one of the most used and viewed websites in Vietnam and so Google was allowed to slowly creep in.

The interesting thing about Vietnam is that Google never officially opened up an office here. It still hasn’t. Google slowly entered, its value was assessed by users, and then it slowly rose to dominance. Now, if Google were blocked in Vietnam, it would leave a huge black hole in the Vietnamese cyberspace.

This is the trend in Vietnam. Let them in, assess how politically harmful they could be, and then realize it’s too late to cut them. For social media, it’s a little more complex. But the same principles apply.

Social Media

China began blocking Facebook in 2008 and Twitter in 2009. In China, the Great Firewall has been very hard to get through, so China’s users have flocked to local social services like Sina Weibo. Although many would argue that Chinese sites would still have more users even if others were not blocked. I don’t buy it. If Facebook wasn’t blocked in China, Zuckerberg would open up an office there and/or be collecting the same wealth of data that Weibo now collects on its users. Today, Sina Weibo supposedly has 500-million users. That’s more than Twitter’s 200-million and less than Facebook’s billion.

Vietnam started blocking Facebook in 2009. But the block was relatively casual. Most users still get on via DNS tweaks or using HotSpotShield with no problems. This is exactly why we’ve seen such explosive growth in Vietnam – doubling its numbers in a year. It’s currently the fastest growing Facebook country in the world, and Facebook has surpassed Zing as the nation’s top social destination.

Vietnam let Facebook in and let it grow until it was too late. Recently, I learned from an undisclosed source that Facebook supposedly has 15 to 20-million users in Vietnam already, so if authorities pull the plug it would be disastrous for users in the country. Hundreds and thousands of businesses have set up shop in Vietnam with Facebook Pages and advertisements.

And although the block has strengthened along with the political tides, that has more served to educate the population to self-censor more than deterred use of Facebook. Today, the block is as light as ever. And because of this, Vietnam has effectively avoided the need to build its own Weibo.

Oh, and as far as Twitter is concerned, in Vietnam, microblogging still hasn’t caught on. That’s probably why it’s not blocked.

What this all means

Although Vietnam and China are neighboring socialist republics and Communist comrades, they’ve taken very different political stances towards the internet. China sees the internet variously as a battle field, a business goldmine, and a threat to social stability. China’s allegory is one of a large empire controlling the biggest population in the world and eventually leading the world. Information is essential to that and it must be tightly controlled and it must be Chinese. That was underlined this week by China’s tech ministry taking a dim view of Android.

Vietnam, with about 92-million people, is smaller in population than China’s most populous province, Guangdong, with its 104 million. The allegory in Vietnam is catch up and adapt. There isn’t a global agenda. That has allowed Vietnamese users to reap the rewards of the two tech giants – both Silicon Valley and China’s web companies – but that’s at the cost of not building giants of its own. Vietnamese social media and search startups struggle to compete with Facebook and Google with no government protection, financing, or encouragement.

There are two sides to this coin. In China, the result is a lot of space for startups and mega-tech companies like Baidu to build for the local population. But they sacrifice a connection to the world. In Vietnam, startups have to compete with outsiders while also getting a little more globally connected – although many would argue people here are still very isolated. The end result may be that some Chinese tech successes are inflated because they have no “real” competitors beyond their borders; and Vietnamese startups are stunted because they can’t out-execute the big guys or regional startups who expand into the country.

But the truth is, it’s a very hard comparison. Although they’re run under relatively similar governments, the scale alone puts everything out of proportion. Chinese companies immediately have access to a huge population while also competing with a host of other fellow Chinese companies. How they triumph over these odds is what really fascinates me.

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This article by Anh-Minh Do originally appeared on Tech in Asia, a Burn Media publishing partner.

Image: fra.ps (via Flickr)