Service providers in Vietnam quickly adapt to COVID-19 pandemic

Virtual kitchen, tech fitness at home and others are among the business models going online during the stay-at-home period.

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4An's delivery packages

With the pandemic impacting shopping behavior, some small-sized Vietnamese businesses and startups in services have promptly taken initiatives to adapt to the changes and overcome the difficult period.

“Virtual kitchen” delivery 

4An authentic Vietnamese vegetarian restaurant chain, from late March, closed two restaurants following the government directive on business restriction  to curb the spread of coronavirus pandemic. 

While many other food & beverage (F&B) stores had to shut down due to the effect of the pandemic, the owners of the one-year catering chain have turned to online model.

“With the increasing orders, we expect to keep our business activities as usual. At this time, doing business without incurring a loss is quite good,” Nguyen Thanh Thieu An, 4An’s co-founder, told Hanoitimes.

Over the last three months, An and other co-founders have set up a “virtual kitchen” plan to be launched this June. However, their plan has become operational ahead of time following the order to close all F&B services in Ho Chi Minh City.

“We have spent a couple of months preparing the plan and suddenly the pandemic broke out so we had accelerate it,” An added.

Digital transformation in F&B industry is a challenge for most of the players, especially in this difficult time, An said, as few products are suitable to go online. For instance, some meals deteriorate if delivering time exceeds 30-45 minutes and we should avoid including such meals in our menu to avoid failure, she explained. 

“We have considered what kinds of meals are suitable for online services and how to keep the quality just as good as the ones served on-site,” An said. “As a green restaurant, our delivery packages are also made from natural and renewable materials.”

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Nguyen Thanh Thieu An, 4An’s co-founder

In the normal period, the portfolio of turnover from offline and offline segment is 80% - 20%, respectively. In the disease period, turnover from online segment is partially offsetting losses from offline segment, according to An. “In such a tough time, we still keep the safety and the jobs for our employees as our priorities and will overcome the difficulties,” she added.

Fitness at home

The founders of 25 FIT JSC, a Ho Chi Minh City-based fitness company established in last July, also have prepared a plan to respond the government order on restricting outdoor activities and gatherings of local residents since mid-March. 

For a 25-minute fitness session which combines a personal trainer and advanced Electro Muscle Stimulation (EMS) technology at studio, 25 FIT has built a “25 FIT at Home” model and launched it after one week of preparation.

“With current advantages of the model, we are able to switch our business model flexibly and efficiently to respond to such the difficult period while many traditional fitness centers have heavily suffered from the order to close non-essential businesses,” Pham Hoang Long, 25 FIT co-founder/CEO told Hanoitimes.

Thirty percent of the total 400 active members subscribe to the "25 FIT at Home" program, as the number of customers registering for the free trial program has increased during the weeks from late March through early April.

Its revenue in March only reached VND1.1 billion (US$46,770), a bit lower than the VND1.5 billion (US$63,778) turnover of February. Targeting the mid- to high-income people, the fitness model with advanced technology is expected to expand when the demand on the service increases in the business community, according to Long. 

 
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25 FIT at home

Expansion plans

According to the Annual Vietnam Business Community Sentiment Index report released by Infocus Mekong Research in late February, the big winners in 2020 will be businesses in online shopping, delivery services, packaged foods, among others as consumers spend more time at home and less time in public places.

As consumers abstain from outdoor activities, online services are expected to continue growing and draw new customers. Of these services, some Vietnamese startups have also promptly adapted to the business restriction period. 

As more social distancing measures come into force, more doctors and users have signed up to the Doctor Anywhere platform, which allows users to consult a licensed local doctor through video consultation app. The number of Doctor Anywhere subscribers has more than doubled since the end of January.

In late March, the health counseling startup raised US$27 million in its Series B round led by Square Peg, EDBI and IHH Healthcare for a total fund of over US$40 million. 

During this pandemic, the startup has also deployed its telemedicine platform at immigration checkpoints. Those passing the checkpoint with body temperature higher than 37.5 degrees Celsius will access the platform and consult a doctor on the spot.

The startup is also providing medical services to home-quarantined individuals, chief executive and founder Lim Wai Mun told The Business Times.

Another online education company, Hocmai.vn, saw a sharp increase in online learning in the period of the pandemic outbreak.

Dang Quang Hung, Deputy General Director of Hoc Mai Education System told Hanoitimes that the number of page visits and new users registering the online courses in February and March has doubled compared to the same period of 2019.

“We expect the growth will continue after the pandemic ends because many Vietnamese people are gradually aware of self-studying through online courses at this time.”

An from the 4An food chain believes the demand in F&B industry will sharply increase after the pandemic ends and that the plan for 2020 will continue in the subsequent years, in which they will open one more restaurant and successfully launch their franchise business until 2023.

“Our mission is to bring the culinary culture of Vietnam to the world and franchise is a good way to realize it,” she said.

Similar to 4An chains, 25 FIT contemplates expanding its network in Hanoi, Ho Chi Minh City and Danang in 2020 through the franchise business. “We expect to be the largest fitness franchise in Asia by 2030,” Long said.

“But firstly, we also need invest in training and developing our human resources to keep up with the fast growth of the model.” Hanoitimes

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