For one of our research projects, we have been in touch with taembe.com, an e-commerce website similar to Diapers.com for Vietnam. As I was asking a few questions on digital innovation for parents in South-East Asia, I found it useful to share the interview I ran with Taembe co-founder Don Phan.
Born in the US to a Vietnamese family, and with an early career in the private equity industry, it’s no surprise Don found his way back in South-East Asia with Rocket Internet, the German-based incubator of “clones”, who has stormed the e-commerce markets in many emerging markets (see how they did in Nigeria, for instance).
Hi Don, thanks for taking some time to chat with us. Can you tell us more about your background?
I’m American but my family is Vietnamese. I’ve lived here off and on for five years. Rocket Internet wanted to start a Zappos clone in Vietnam. It was a bit too early… but for them and for me it made sense to start it anyway. I was in charge of Zalora and then ran Foodpanda in Vietnam.
I was in Rocket Internet for over two years and learned a lot. By the time I left, I already knew I wanted to do baby e-commerce. We started taembe.com “tã em bé” is the Vietnamese word for “diaper,” so we’re modeled after diapers.com.
Baby e-commerce makes sense because of the demographics. It’s a very young market, half the population is under 30, 61% is under 35. This is Apple’s fastest growing market. There are babies and smartphones everywhere.
Ron Hose [from Bitcoin exchange startup Coins.ph in the Philippines] was one of the first people to push me to launch. He recommended that I put some money behind a MVP (minimally viable product) and try some marketing. I took Ron’s advice and we launched April 2013. We put together a great team and began to see our numbers increase.
What need does taembe.com address in Vietnam, and what difference do you bring?
My wife and I came up with the idea after shopping for groceries. We noticed a young mom struggling to drive a motorbike while holding her baby and large packs of diapers. Our company brings convenience and cheap prices to Vietnamese moms. Our company motto is”làm mẹ dễ dàng hơn” – making mom’s life easier.
What’s e-commerce like in Vietnam? How is it different from what you were familiar with?
The daily deal sites were really big when I first started out, they really made people comfortable and familiar with ordering online. In Southeast Asia, Vietnam is special because there are two big metropolitan areas to target. You usually go for Bangkok, Jakarta or Manila if you launch in Thailand, Indonesia or the Philippines.
The older and wiser e-commerce veterans here have been telling me to look to China instead of the U.S. to understand where the market is headed. Vietnam’s e-commerce industry is well behind China’s, which is great motivation for us. It’s hard to believe now after the Alibaba IPO, but many people did not believe that China would be a suitable e-commerce market.
Alibaba founder Jack Ma says “E-commerce in the States is a dessert, but in China it has become the main course”.
Jack Ma believes that because infrastructure is so good in the United States, this benefits retail over e-commerce. Jack Ma’s narrative for e-commerce and economic development makes sense to me. We both believe technological adaptation will progress faster than infrastructure development in many developing markets, allowing e-commerce to grab larger market share than it would in developed countries. None of the retailers in Vietnam are nearly as good as Target or Wal-Mart in the US.
How do you handle logistics? Where are your customers coming from?
Logistics is very important. One of our competitive advantages is we use a proprietary logistics system so we can track our drivers’ performance. We want to track everything. We have real-time logistics so we know who our top performers are and what are our best routes. It’s really an integrated part of the back-end
The majority of our traffic comes from desktop computers but this is changing very quickly. We’ve had to adapt to the proliferation of smartphones and tablets. We’re based in Ho Chi Minh and we will have a larger presence in Hanoi by next year.
What has surprised you since starting the company? What kind of assumptions have proven to be wrong?
We’ve had some very pleasant surprises. First, the order volume outside the city has been fantastic. If you’re outside the two major cities, as a young parent, you can’t really go to a store and buy all that you need. It is not convenient, so online ordering becomes a real possibility.
Then, we also have a lot more expat customers than we expected, so we had to upgrade our website with English language capabilities. Saigon is a very international city and was historically a major trading hub. Many of these expats have babies too. When we started the website, we really were focused on the Vietnamese market, but we’ve learned to cater to our expat clientele.
One other surprise has been the number of customers who have come to our office. Our inventory and staff are in the same location, so customers can see our products and pick up items if they want.
How do you feel women and young families in Vietnam are using technology and the kind of solutions you provide? What could be a very Vietnamese specific on digital?
This generation in Vietnam is very different from previous ones. It is more affluent and they are more focused on the future. Families have fewer children nowadays but they spend more on each child. They’re more likely to spend money on higher-end items.
Many of our Moms (we call our customers ‘Moms’) are working Moms.
We are benefiting from the large number of women entering the workforce who find themselves with much less time to focus on their careers and care for their families.
We also see people using parenting forums and seeking advice on digital platforms, such as BabyMe [the app is still in Private Beta. It is founded by Trinh Tuan, a single father who also founded Human Milk 4 Human Babies Vietnam, and the Vietnam Breast Milk Community], as well as ebe.vn [a community platform to get advice on pregnancy and early infant related topics].
How do you work with brands such as Pampers or in the broad field of early life/parenting?
We’re a retail distributor, so we have relationships with most of these major brands. We are growing together with them in Vietnam. The major brands are also new to the market. They are trying to figure out what makes these moms tick. We never share our customer data, but we know a lot more about what our customers want than a typical brick & mortar retailer.
You can also this video interview of Don made by This Week in Asia, a media focused on entrepreneurship and startups, and check their website as they have quite a collection of portraits of startupers.