State of the Nation: Vietnam’s ‘Unexotic Underclass’ make their mark with tech
As technology unlocks the purchasing power of nearly three-quarters of Vietnam’s population who reside outside of cities, brands need to wake up to the potential. In the latest State of Nation, Phuc Ngo, vice-president of strategy, Vietnam, for PR and digital marketing agency Vero reveals the impact of Vietnam’s “unexotic underclass”.
/ Image by Quang NGUYEN DANG from Pixabay
Vietnam is a nation full of surprises. Here, ancient customs and modern technology coexist, and the country’s young and restless are embracing the latest innovations, such as AI, NFTs, and ChatGPT, with a rare fervor. The rapid advancements in technology are awe-inspiring, but what truly sets Vietnam apart is how members of its “unexotic underclass” use technology to uplift their lives.
The term unexotic underclass originated in an essay by CZ Nnaemeka published in 2013 in the MIT Entrepreneurship Review. In a Vietnamese context, I use the term to refer to the farmers, laborers, and small business owners who live outside the economic centers of Ho Chi Minh City and Hanoi and receive disproportionately little attention in media and advertising.
Despite being largely left behind in the race for progress, this underclass is embracing technology at an unprecedented pace. The reason? Technology is providing them with the tools they need to improve their lives and businesses, such as mobile banking, online marketplaces, and e-commerce platforms.
The unprecedented convenience of ecommerce
The 63% of Vietnamese who reside in rural or suburban areas account for 60% of the country's GDP, meaning they have the potential to drive business growth – even far from the towns they call home. Nearly half of internet users in rural areas engage in online shopping activities using apps such as Facebook, Shopee, Tiki, and Sendo to access information about products, chat with stores, watch live shopping, and read reviews before making purchase decisions.
One way they do so is through an app called MoMo, which began as a sim card application in 2010 that allowed people to transfer money and buy mobile top-ups and game scratch cards but has grown into a super app offering multiple services, including processing insurance payments, facilitating donations, and providing an investment marketplace. With 40% of its users residing outside major cities like Ho Chi Minh City and Hanoi, MoMo’s strategy to target rural residents and small and medium-sized enterprises (SMEs) has poised it for continued growth. Its recent funding allocation is aimed at supporting rural expansion, tech investments, and SMEs adapting to digital transformation, making it a ’super app’ that offers multiple services.
Another example comes from KBank, which is taking a unique approach to support micro-businesses such as small eateries and clothing shops that have registered for KBank ’Biz Loans’ by promoting their products and services. This practical support goes beyond offering competitive interest rates to a comprehensive promotion package designed to help these businesses increase their exposure and better connect with their target customers. The campaign has been highly successful, with over 7m reach and 1m views in just 6 weeks.
These platforms fill a critical gap in the lives of the unexotic underclass in Vietnam by making financial and commercial services far more accessible. In doing so, they are providing these communities with the means to participate in the digital economy, empowering them to grow and succeed in today's increasingly online world.
The digital mom-and-pop shop
Livestreaming is gaining popularity as a tool for individual sellers to connect with customers around the country. Everything from fashion and beauty products to fresh farm produce is being sold live on platforms like Facebook, Shopee, Lazada, and TikTok. These sellers don't need traditional brick-and-mortar stores or expensive advertising campaigns; they simply need a smartphone and a good internet connection. It’s a trend that has fueled economic growth, particularly in rural areas, and has created new job opportunities for those who were previously left behind.
In just four months following its launch, Tiktok Shop attracted over 32,000 sellers in Vietnam. These sellers were able to reach a wide audience, generating an average revenue of US$2m a day. This is a testament to the platform’s ability to provide an accessible solution for people looking to start an online business, especially those in rural areas who may not have access to traditional ecommerce platforms.
The success of TikTok Shop is driven by its focus on empowering individuals and small businesses to sell their products online. With easy-to-use content production tools, farmers, micro-businesses, and resellers can create videos and conduct live streams to sell directly to consumers without needing to invest in logistics, system setup, branding, or advertising.
Brands and rural content creators: a winning combination
Those in the unexotic underclass are not only consumers, but also creators and audience members. They possess a unique sense of storytelling that’s down-to-earth and hard-earned. It resonates with the masses and develops their taste for humorous and entertaining content such as memes, TikTok videos, and new slang.
Thus brands should consider the unexotic underclass not just as an audience, but as an extended channel for reaching their target customers.
One Tiktok influencer, An Den, is a farmer living in a rural area far from the hustle and bustle of the city. She regularly creates content that shares positive stories about life in the countryside, whether from her own life or those of other farmers nearby, and shares nearly-forgotten Vietnamese traditions that provoke a nostalgic response in her audience, many of whom are urban residents or Vietnamese living abroad. She has become sought-after by brands looking to cultivate an authentic image, and she partnered with Knorr, a Unilever brand, to create traditional dishes to share with kids and neighbors during the Lunar New Year.
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AI helps rural Vietnamese reach out to the world
As a final note and a look towards the future, it’s worth mentioning that Vietnam is currently experiencing an AI revolution thanks to the widespread adoption of ChatGPT. Google Trends shows that ’ChatGPT’ and ’OpenAI’ were two of the most searched keywords in Vietnam in the first two weeks of February 2023, despite the app’s official unavailability.
The Vietnamese users who gain access are putting ChatGPT to use in a variety of ways, from writing social media captions and poems to professional purposes such as sales content and error checking. ChatGPT has already become a valuable tool for the creative and tech-savvy population due to its ability to produce accurate responses in natural-sounding Vietnamese. I expect the many in Vietnam who are currently using technology in clever (and even life-changing) ways will do the same with AI, and we won’t have to wait long to see its impact on society.
Phuc Ngo, is vice-president of strategy, Vietnam, for PR and digital marketing agency Vero.