Vietnam - The Rising Star of Asia

Vietnam is one of the Fastest Growing Economies on the planet. It all started a little over 15 years ago when the economic transformation took its first steps in the country. Since then the Vietnamese Start-Up Ecosystem has developed at light speed.

A survey by Google and Temasek found that the value of Vietnam’s digital economy rose to $9 billion in 2018, and the figure is expected to reach $30 billion by 2025.

Therefore a country of over 95 million people located in the heart of Asia shouldn’t be forgotten when planning your next expansion strategy.

Vietnam celebrated its first unicorn in 2016 when the tech major VNG group reached $1-billion valuation. It hasn't been an easy journey, it took 11 years for VNG to reach this milestone.

When talking to local entrepreneurs the emphasis on profit-generating startups it’s more under lighted than a reach for the next unicorn. So what is the secret behind Vietnam’s rising innovation?

Vietnam holds many benefits at its side, here are six of them:

?1. A Young Tech Savvy Population

Vietnam has a population of 95 million people, 40% of them being under 25 years old. They are increasingly better educated and technologically knowledgeable due to the fact that most of them have transferred from a non-digital world to mobile services directly, skipping the step of using computers. They are curious, digitally active and keen to test and use new products.

The amount of English speaking youngsters has risen significantly in the last few years. The fact that Vietnam has a Latin Alphabet is an additional shortcut compared to its neighboring nations.

 2. Ideological & Religious Unanimity

Vietnamese population is ideologically neutral and pro-free-market capitalism. Since 1975 Vietnam has been more or less politically and ideologically unanimous and stable nation with little or noncensorship over the internet.

This has enabled access to broad ideological & critical thinking promoting press and digital content. Adaptation to mobile services as well as social media penetration has been very high since the beginning of the tech era.

3. Geographical Location

From a geopolitical point of view, the trade war between China and the USA is more than ideal for Vietnam to act as a middle man and guarantee a safe marketplace.

The political tension in surrounding Asian countries such as Malaysia and the increasing living and labor costs in neighboring Thailand due to the Inflation of Thai Bath are both factors that benefit Vietnam. 

4. Support From The Government 

The Vietnamese Government is in the mission of turning the country into a technology powerhouse. It has initiated multiple programs to facilitate the birth and growth of Startups, among them enabling tax reductions; such as preferential corporate income tax, land rent reduction and preferences in accessing credit.

The cooperation between Startups, government, universities and research institutions has been encouraged. A couple of years ago the Government started promoting the creation of Accelerators, Incubators, and Coworking Spaces. It has done a good job, currently, the country is proud to have 38 incubators, more than 170 co-working spaces, and 61 startup funds.

Another significant initiative launched by the government this year was a joint commitment by the government and local and international VCs to invest $425 million in Vietnamese startups over the next three years.

5. Increase in Foreign Direct Investment 

In the last few years, Vietnam has seen remarkable growth in foreign investment capital, both in amount and number of deals.

The number of investment funds participating in the Vietnamese market is steadily growing year by year as the market is maturing, the leading sector attracting foreign investment has been Fintech. Foreign investment is mainly coming from the US, Japan & Korea. 

6. Cash prevalent society, lack of banking infrastructure 

A rising middle class, growing internet usage, and a young population has opened doors for Fintech Startups to flourish, services such as Digital payments, Peer to peer lending & wealth management and insurances have seen growing demand and quick adoption rates in the nation.

In the period between 2014 to 2018, Vietnam’s consumer finance industry has expanded  59% annually. The fact that the government is promoting a cashless society has speeded up the process. 

Despite the country’s astronomical growth. there is no success without challenges to overcome. Vietnam will have to keep educating more English speaking people, adapt the young society for a successful ongoing economic transformation, maximize new value from digital & technology transformation in the people function.

As well as facilitate market participation and capital access, encourage regulatory transparency, clarify regulatory uncertainty and expand from domestic market-centered services to regional or global companies.

With a strong foundation, returnees and foreign talents help, transparency & collaboration with the Regions other Startup Ecosystems there is no doubt that Vietnam can overcome those challenges, keep attracting more investments and establish its position as an Asian Tech Hub.

About me:

? I help companies to Enter Asian Markets, Define them a Marketing & Branding Strategy + help them scale.

? I facilitate Press Release in Top Chinese & South East Asian Media

? I Help companies to Establish Partnerships with Asian enterprises, facilitate with Funding, and Access to VC’s Worldwide.

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