Vietnam: Entrepreneurship ecosystem has great potential for development
The Vietnamese middle class is the fastest growing country in Southeast Asia in recent years. This growth phenomenon can be said to be very obvious: the total number of startups has achieved substantial growth. For example, the number of startups in 2012 was only 400, but in 2015, the number of startups was only 400. The number has grown to 1,800, and until 2017, the total number of startups in the country was almost 3,000. In addition to quantitative changes, it has also continued to expand geographically, from the traditional central cities of Hanoi and Ho Chi Minh City.
In June 2017, in order to promote the country’s technological progress and the commercialization of technologies such as AI, Internet of Things, education technology, O2O, e-commerce, financial technology, and agricultural technology, Vietnam revised the “Technology Transformation Law”.
Tạ Việt Dũng, Director of the National Agency for Technology and Innovation of Vietnam, made an announcement on the exchange event on the theme of "Blockchain and E-commerce". He said that in the past few years, the Vietnamese government has been vigorously supporting the adoption of new technologies in various fields. This can be seen from the fact that the Vietnamese government has been preparing the relevant legal framework. In addition, on July 1, 2018, the country’s revised "Science and Technology Transformation Law" will come into effect. This will provide greater convenience for Vietnam to absorb foreign technology. At the same time, Vietnamese startups will have more opportunities to cooperate with companies from around the world such as Thailand and Singapore.
There are many bright spots in Vietnam in 2017, such as:
1. Many venture capitalists such as ESPCapital and Innovatube establish venture funds for startups.
2. SpeedUP2017 is a startup fund valued at USD 520,000 per month established by the Ministry of Science and Technology of Ho Chi Minh City, Vietnam. This fund will invest in 14 startup companies in Vietnam with a minimum investment of approximately USD 15,000 and a maximum investment of approximately USD 56,000.
3. Startupcity.vn, created by the Hanoi People's Committee, is a portal site dedicated to storing information on startups and investors. At the same time, the website also publishes the dynamics of the entrepreneurial circle, connecting startups and investors, as well as enterprises and the government.
4. Tiki, a Vietnamese e-commerce company established in 2010, received US$54.5 million from China’s JD.com and South Korea’s STIC Investment.
5. Singapore's SEA Group acquired 82% of Vietnam's food delivery company Foody for US$64 billion.
6. KyberNetwork, founded by a Vietnamese, conducted an ICO on September 15, 2017 and acquired Ethereum worth approximately US$56 million.
7. Shinhan Bank Vietnam has officially taken over the retail banking department of ANZ Bank and has used the resources of this department to expand its payment services in Vietnam.
Vietnam's e-commerce market has a bright future
TạViệtDũng said that Vietnam is a very interesting market: Vietnam has a population of 96 million, of which 67% are Internet users, 73% mobile phone users, and 57% active social media users. At the same time, according to relevant data, the annual growth rate of Internet users in Vietnam has reached 28%, and active social media users have also achieved an annual growth rate of 20%. This actually indicates that there will be greater opportunities to pay attention to new products in the consumer sector.
In 2016, the total value of e-commerce in Vietnam reached 4 billion U.S. dollars (equivalent to 100 trillion VND), a year-on-year increase of 22%. These figures show that Vietnam has become an attractive global e-commerce market.
According to information from the Vietnam E-commerce Association, Southeast Asia is the fastest-growing region in the Asian e-commerce market, and it has attracted the attention of major companies in the world, such as ancient songs and Facebook. It is predicted that the total value of e-commerce in Vietnam will reach US$10 billion in the next five years, with an average annual growth rate of 30-50%.
Vietnam's 2018 Online Business Forum (VOBF) was held in Hanoi a few days ago, and many international e-commerce giants including Amazon participated in the conference. According to statistics from the Vietnam Electronic Commerce Association (VECOM), in 2017, Vietnam's e-commerce increased by 25% year-on-year, making it one of the fastest growing countries in the world. Vietnam's online retail and marketing, travel, online payment, etc. have all experienced significant growth. Among them, online retail sales revenue increased by 35%, and related logistics and freight services revenue increased by 200%. According to statistics from the National Payment Corporation of Vietnam, in 2017, Vietnamese residents used domestic bank cards to conduct online transactions. The number of transactions increased by nearly 50% year-on-year, and the transaction value increased by 75%.
The rapid development of the Internet, 3G, and smart phones has provided conditions for the development of e-commerce in Vietnam. Major e-commerce websites in Vietnam include Lazda, sendo 123mua, zalora, tiki, chodientu, ebay, and kay, which account for 21%, 10%, 8%, 5%, 4%, 3%, 2%, 1 %. At present, Google, Alibaba and eBay have officially set foot in Vietnam. Amazon and Rakuten of Japan are actively establishing partnerships with Vietnam. Thailand and South Korea are also looking for opportunities to invest in Vietnam's e-commerce market by purchasing shares.
The transaction volume of hotel rooms booked through online travel agencies increased by an average of 30% annually. The growth rate of online tourism revenue exceeded 50%. There are 59 million Internet users in Vietnam, and 91% of the Vietnamese population use smartphones. Vietnamese residents spend an average of 25 hours online per week. It is predicted that the revenue from the sharing economy will be close to 300 billion U.S. dollars by 2025, and the e-commerce market has a bright future.
In addition, Vietnamese people have a very positive attitude towards technology and believe that the potential is huge. 61% of people believe that sex technology will provide far more opportunities than risks.
At present, the main difficulties faced by the development of e-commerce in Vietnam are as follows: First, there is a lack of professional talents. There is a lack of management talents and technical talents in the field of e-commerce. Second, consumers still lack confidence in online shopping and worry about the quality of goods and the protection of rights and interests arising from online shopping. The third is that Vietnam's legal system on e-commerce is not perfect. There are incomplete laws and regulations for dispute resolution and punishment of illegal acts.