One part of Vietnam which deserves more attention is its tech scene. Attracting a copious amount of foreign investment into local businesses, startups in Vietnam have access to all the conditions needed to hatch multi-million dollar tech firms.
The Best Frontier Market for Tech?
Vietnam has long been home to manufacturing plants from the world’s top tech firms. These include LG Electronics, Panasonic, and Toshiba. In recent years, the country has also seen itself transform into the Southeast Asian production hub for Korean electronics giant Samsung.
Following integration into the ASEAN Economic Community and an increased presence of global tech firms, more investors want to put their money into startups in Vietnam.
In March of 2016, Goldman Sachs and Standard Chartered Bank managed to raise US$28 million for a local e-payment operator. It had over 2 million customers and incredible transaction growth of over 30%. Silicon Valley-based venture capitalist 500 Startups also announced the creation of a US$10 million fund focused on Vietnamese startups.
It seems like these investors are betting on another goldmine. They’ll probably strike gold considering that most Vietnam startups are in e-commerce. This is a sector which, despite getting no federal support, grew by an astounding 35% last year to US$4 billion.
Startups in Vietnam to Grow
You may still be confused as to how Vietnam came this far in terms of technology. InvestAsian finds there are several factors contributing to the advances the country has made over its neighbors.
First of all, Vietnam is part of many new trade agreements such as the Trans Pacific Partnership (TPP) and ASEAN Economic Community (AEC). This gives the country a competitive edge over its neighbors, such as Laos and Cambodia.
Second, the country has some of the highest-performing computer scientists in the world. A software engineer from Google mentioned that Vietnam has the highest-performing computer science students, with many of them acing the company’s interview questions on problem solving. The Organization for Economic Co-operation and Development gives high ranks to Vietnamese teenagers in terms of math and science.
Third, the country offers a cheaper labor cost than even China. As manufacturing costs rise in China, more large multinational companies flee to places like Vietnam, the Philippines and Cambodia. This is a huge incentive for potential investors.
Fourth, there’s a large market for tech products. Investors note Vietnam’s young, tech-savvy population with a median age of 30. This means that the acceptance rate of tech products is much higher than in a lot of other countries.
Last but not least, the country has a great deal of startups in comparison with the population. In fact, concentration-wise, Vietnam has a higher ratio of population to startups than Indonesia, China, and India.
With arguably the fastest growing startup scene in Asia, new firms in Vietnam will draw an increasing amount of foreign investment over the next decade.
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