Vietnam in the Spotlight
Vietnam is no doubt attracting a lot of attention in Southeast Asian technology circles.
North Ridge Partners’ Chris Tran shares how overlooking Vietnam would be a mistake for both businesses and investors.
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In Southeast Asia, Vietnam is very much in the spotlight.
Low cost and yet high-quality manufacturing, wide and deep pools of software engineering talent and a large market with a young demographic are attracting a significant amount of investment.
This investment is underscoring the future of the economy as a high value-add hub for the region, a key consumer growth market, and a tourist destination.
As a vote of confidence, the US$1bn investment into Vietnam conglomerate Vingroup by Korean Telco Giant SK Group was notable. Vingroup itself is the exclusive sponsor of the Formula 1 that is coming to the capital of Vietnam, Hanoi, in 2020.
Further, the government has delivered on reform creating a track record of growth of 5% each year since 2010 reaching 7% in 2018. Vietnam’s ease of doing business has risen from 90 in 2010 to 69 in 2018.
Incredibly, Vietnam is also “leading from behind” just like China for the internet economy.
Nearly 100 million people, an average age of ~31 years and an internet economy of 60 million users, it is only 2nd or 3rd to Indonesia in size in the Southeast Asian region. Its users have leapfrogged to Web 2.0 mobile-first and are hyper-social and local in their digital consumption.
Chasing growth in Vietnam, there are no less than four major ride-hailing/ mobility players in the market. These are FastGo, Grab, GoJek/GoViet and Be.
Vietnam was also the first Southeast Asian Country to have a technology unicorn, VNG, but according to various sources has up to 8 “Centaurs” i.e. private technology companies valued at US$100m or above; these are Topica (Education) – where the Bill and Melinda Gates Foundation is involved, Tiki (eCommerce & B2C), Trusting Social (media), NextPay (note, North Ridge Partners acted as strategic and financial advisor in the merger of Vimo and MPOS to form NextPay), VNPay and Momo (all payments), Sendo (eCommerce) and Yeah 1 (media).
The last six months have seen over US$500m invested in technology, surpassing a paultry $46m investment only five years ago in all of 2014.
Traditional lack of investment has meant that local entrepreneurs can be more resourceful, and are used to achieving profitability earlier.
Interestingly, there are two technology hubs in Vietnam, the capital in the North Hanoi, and the commercial capital in the South Ho Chi Minh City which is still referred to as Saigon.
The takeaway: Vietnam is no longer an “emerging market” but a fast-growth technology market. Technology investors and businesses need to investigate the opportunity now to secure a role in the future of this 2050 Global Top 20 economy.
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If you would like to know more about technology-related investment in Vietnam, please contact North Ridge Partners here.