How One Group Buying Site Customized for Vietnam – and Raised $61 Million

December 28, 2011

12:30 pm

Pho is a traditional Vietnamese soup; the broth is simmered for hours and then served everywhere from restaurants to street stalls to trains. One day, the founder of Pho Ta, an upscale soup chain in Vietnam, sat down for a meal at one of his stores. To his surprise, the waiter said they couldn’t serve him; the restaurant had run out of broth.

Pho Ta stores had been flooded with customers armed with discounts from nhomMua, Vietnam’s top group buying site, which has raised over $60 million in funding. Launched in October 2010, nhomMua used to sell thousands of vouchers per deal before they learned to limit the number sold. That was enough to make rice chain Com Tam Moc run out of rice, and to overheat the yogurt dispensers at Parallel Yogurt so much that employees had to manually fan them.

Like many competitors who have sprung up recently, nhomMua is learning how to deal with a new daily deal market. Merchants have to be educated on how to use discounts as marketing; in fact, nhomMua cofounder David Tran went out and did sales himself in the beginning. To sign up those merchants, nhomMua also takes a lower margin than Groupon does in the United States.

“It’s been a crazy ride. It’s such a new market and it’s such a complicated market that it’s really hard to predict how things will turn out – kind of jungle-style,” says Tran, who has worked on building delivery systems and training salespeople from the ground up.

Like most Asian sites, nhomMua offers multiple deals at once – about 20-30 per day. Their site entices hungry shoppers with backgrounds customized for each deal, like a large cheesy pizza (compare that with LivingSocial’s city backgrounds).

The company also learned that Vietnamese people are somewhat ashamed to use coupons, and most don’t have printers. So nhomMua – which already does cash-on-delivery because using credit cards online isn’t common in Vietnam – decided to offer the discounts as glossy, business-card-sized coupons, like a VIP card.

One more difference, which helps deals go viral, is that Vietnamese people prefer not to eat alone. “In Vietnam, it’s a collective society, so they go in groups. Here, there’s something wrong with eating by yourself. So when someone buys a coupon, they drag like 20 of their friends,” explains Tran, who was born in New York but has Vietnamese heritage.

In the end, what’s most meaningful for Tran is seeing a surge of customers at a small business.

“I went once to see it happening, and I had chills down my spine – it was just amazing. To see an empty place suddenly become full of crowds of people – it feels like you can almost change the course of a business with one deal.”

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Kira M. Newman is a Tech Cocktail writer interested in the harsh reality of entrepreneurship, work-life balance, and psychology. She is the founder of The Year of Happy and has been traveling around the world interviewing entrepreneurs in Asia, Europe, and North America since 2011. Follow her @kiramnewman or contact [email protected]

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