by Anh H. Nguyen
Harnessing the transformative power of technology is central to the flourishing of nations
The entire history of our species could be summed up as a series of rises and falls. Mighty civilizations crumbled due to war, famine, and plague; new kingdoms sprang up from their ashes, then bit the dust themselves. Yet broadly speaking, the general trajectory of humanity still trudges upward despite incessant setbacks. It is all due to one single driving force: technology. All in the last couples of decades, high-tech breakthroughs have put men on the Moon and computers in homes. They gave us the Internet, organ transplants, smartphones, and nuclear power. The technology landscape is vast, ever expanding, and reaching new heights at a neck breaking pace.
At the individual level, technology revolutionizes the way people live. The average citizen of a first world country now leads a more comfortable, entertained, and healthful existence than the richest king a mere hundred years ago. On the macroscopic scale, technology holds the key to the empowerment of nations. It is not its natural resources that put a country on the map, it is the combined strength of human skills and technological development. Vietnam has a realistic shot at a technology-driven future of prosperity and longevity - we only need to look at our neighbors for inspiration and guidance.
Examples from Asia
For the longest time, Asian countries, collectively (and myopically) referred to as the Orient, continually trailed behind the West when it came to science, technology, and wealth. However, innovations managed to transcend both geographical and cultural borders, leveling the playing field little by little until their cumulative might tipped the scale. The 20th century saw the splendid uprising of four economies dubbed the Four Asian Tigers: Hong Kong, Singapore, South Korea, and Taiwan. Thanks to a mixture of massive industrialization and export-oriented policies, they have become leading financial and manufacturing centers, not only in Asia, but of the world at large as well.
The sprawling metropolises of Asia are on an equal footing with the West's liveliest hubs
Their success owes no small part to Japan, whose pursuit of cutting edge technology from computer science to robotics inspired similar paths for these four countries. They now in turn serve as role models for a new group of burgeoning economies known as the Tiger Cubs. Comprising five dominant Southeast Asian countries - Indonesia, Malaysia, Thailand, the Philippines, and Vietnam, the Tiger Cubs are eager to emulate the so-called economic miracles that their predecessors have carried out. The usually cited components of their potential for growth include large population, China's investments, proximity to the Tigers, and the increasingly rapid transfer of knowledge and technology. Within the latter lies the secret ingredient that could propel Vietnam's economy towards greatness: Artificial Intelligence.
Debunking the myths of Artificial Intelligence in Vietnam
For the last few years, some buzzwords have been making the rounds on the lips of countless marketers, businessmen, and policy makers in Vietnam: Industry 4.0, Artificial Intelligence, Machine Learning, and Big Data. Few of those who spout those terms actually have any inkling of what they mean, let alone their execution or implications. This has the contrasting effects of hyping things up and desensitizing people to their true potential. Some cynics believe Artificial Intelligence to be an overly promoted farce, while others hold it to impossibly high expectations, treating it like some kind of magic bullet that will solve everything from world hunger to climate change. The truth about Artificial Intelligence lies not in between these two extremes but somewhere else entirely. In reality, Artificial Intelligence is similar to electricity in the way it could transform almost every facet of life as we know it. However, actual implementations of Artificial Intelligence in Vietnam are still scarce due to many difficulties hidden to the public eye.
Among the fields and industries that AI could develop and advance, retail often comes to mind first. Many retailers in Vietnam have now acknowledged the importance of data-based customer insights to the success of their business, and have therefore turned to AI tech as the logical solution. It is just intuitive thinking: understanding consumers and meeting their needs should be a vital part of any B-to-C companies. Other retailers that did not get the memo the first time around are also gradually getting on board. It is remarkable that business owners in Vietnam, still largely viewed as a third world country by the rest of the world, are so eager to adopt cutting-edge applications to move the needle. Nonetheless, there are two main things that hold them back from their goal.
1. Quite a number of Vietnam's business owners adopt a data-driven attitude only in words, not in practice. Old habits die hard. It is tough for them to switch gears, getting rid of decades of "intuitive thinking," "past experience," so on and so forth. Superficial attempts to cherry pick data that suit their biases or preexisting agendas, sadly, will not yield fruit. In order to steer their businesses in the right direction, the owners need to change their mindset first.
2. Even a larger number of so-called AI companies do not know what they are doing. Their core technology is usually insufficient due to lack of know-how, but more than that, they do not have people with the relevant practical knowledge to serve their clients. If tech companies stay detached from reality, their products are unlikely to amount to anything but decorations on a report. The new tech bubble is deflating and startups cannot rely on investment funds to support their vision forever. Their "tech-centric" mentality must change, too, or they themselves will not survive.
Palexy as the harbinger of a new era
Palexy is one of the rare technology companies in Vietnam that apply genuine Artificial Intelligence and effectively utilize it to solve retail problems. What Palexy has, what differentiates it from other technology companies, is a well-built team with robust retail experience. All members of Palexy's consultant team have held high level positions in retail companies and as such, are fit to provide fully actionable counsel to clients. It is akin to a bread-and-butter situation: the bread - technology, is not palatable without the butter - business insights. Lacking both, producing results is not just improbable, it is impossible. Furthermore, Palexy is a consummate B-to-B player, dedicated to helping retailers by closely monitoring their progress and providing them with the necessary aid at every step.
Thao Tran, Palexy's Director of Marketing and Business Development, has years of retail experience under her belt, having worked at BCBG Max Azria in Canada and Runway Vietnam
The first of many
In November 2019, Vua Nem became one of Palexy's first clients. It was a milestone, not only for Palexy, but also for the country's technology community - two fully Vietnamese companies, one AI startup and one retailer, teamed up to integrate state-of-the-art digital prowess into business. It was also a match made in heaven, a case of meeting each other halfway: in order for Palexy's solutions (or any AI solutions for that matter) to fully pay off, the client needs to actually act on them. For many, it means they need to be willing to fundamentally challenge their preconceived ideas of conducting business. Luckily, Mr. Hoang Tuan Anh, the CEO of Vuanem, the largest retailer of mattresses and bedding in Vietnam, is also an outlier among the nation's business leaders: he truly believes in the digital transformation of business and is committed to making decisions based on data.
One of Vuanem's nationwide stores
Six months later, despite some major glitches caused by Covid-19 among other things, Vuanem has fully adopted Palexy's data-driven philosophy and plans to enact it at their 300-plus stores by 2023. Palexy's solutions for Vuanem's layout arrangements prove particularly successful: the Average Profit per Product Unit at selected stores that utilized Palexy increased by 20% after 3 months. Vuanem's testimonial (video below) indicates its level of satisfaction with Palexy's services and professionalism; at the same time, it urges other companies to follow the same data-led model.
Causes for optimism
What implications does this bear for Vietnam's businesses as a whole?
First of all, Vuanem's results with Palexy attest to the feasibility of a high-tech future for Vietnam. Palexy's solutions, developed completely by Vietnamese engineers, are a testament to the untapped pool of raw talent over here. Provided with adequate resources, Vietnam's brilliant minds could create softwares on par with the finest in the world. In spite of skeptics and naysayers, technological advances have and will continue to transform the destiny of our country for the better. It is high time Vietnam cultivates its very own Silicon Valley.
Next, this single event could herald a new age for the economy of Vietnam. Just like people of the Four Asian Tigers and Japan, and Western countries before them, Vietnamese folks could build upon the intellectual progress made by our predecessors, i.e. standing on the shoulders of giants, so to speak, and create our own values. Imagine the snowballing effect if 100, 1000, 10000 companies in Vietnam could raise their productivity level by 20% each? Imagine the sustainable growth if every field and industry adopted a more logical, fact-based way of thinking/doing? The sooner business leaders embrace this vision and turn it into reality, the more attainable Vietnam's prospects as an economic powerhouse would actually be.