On the Alexa traffic rank, Zing Video is the fifth highest ranked site in Vietnam. But that number piggybacks on the strength of Zing Me, VNG’s flagship Facebook-like site. They’ll be allowing users to download individual videos they want to keep starting on April 9th; and from April 19th to June 1st, users can download their own videos en masse. It’ll all be over officially on the June 2nd when the service goes completely offline.
Taking down the service falls in line with two main factors for VNG, a general shift in strategy and a disinclination to compete head on with Youtube. In terms of strategy, VNG has been going heavy into mobile with new products like mobile chat app Zalo and mobile social games like Giai Dieu Vui while maintaining its strong strategic advantage with web real estate like Zing MP3, Zing News, Laban (a web and mobile browser), Zing TV (which allows users to broadcast Vietnamese television onto their web browser or mobile), Zini (a new Weibo or Twitter-like service released earlier this month), and Baomoi (the leading news portal that VNG acquired). In terms of foreign competition, Youtube currently holds the number four Alexa traffic ranking in Vietnam just behind Google and Facebook.
On one side, VNG is obviously shifting its resources into new projects like Zalo and Zini, but it also brings up a scary thought: can Vietnamese companies handle competition from mega companies like Google and Facebook? Certainly, VNG’s Zing Me has maintained a strong domestic growth rate of 12 million users compared to Facebook’s 12 million – though Facebook’s aggressive one million new users per month growth rate in Vietnam makes it look like it’ll win in the end. But can this growth be maintained for long as Facebook gets more aggressive about how users can access its platform with apps like Facebook Home?
In China, Youtube has been blocked since 2007 effectively allowing local competitors to dominate the space without resistance. In Japan, Youtube has faced an innovative competitor in Niconico-douga which in addition to streaming videos, allows users to comment on top of the video. Up until now, VNG’s Zing Video was the only one that could take on Youtube in Vietnam.
This underlines a current of unease in the Vietnamese consumer domestic market. Effectively, VNG is competing with Google and Facebook on multiple fronts, and it’s having to pick its battles more wisely in order to stake out a secure market advantage. Zalo makes a lot of sense because both Google and Facebook are weak in chat apps. But with Google rumored to acquire Whatsapp soon (and Google Talk rebranding as Google Babel to be more like a new-style group messaging app), how will Vietnam’s Zalo fare if Google puts all of its engineering weight behind one chat app competitor that is already incumbent in the space? And how will Zing Me do up against a Facebook that is even more aggressive about innovating its interface. On the other hand, Zing MP3 is bound to remain untouchable with the American music industry holding back services like Spotify and Pandora from going global.
All of this, although fascinating and telling of VNG’s prowess in the consumer space, does not bear much weight on VNG’s central business: gaming.
(Source: Zing’s Blog)
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