BDO LLP | INTERNATIONAL TECH HUBS SECOND EDITION
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21 INTERNATIONAL TECH HUBS SECOND EDITION | BDO LLP
VIETNAM
Though Ho Chi Minh City is likely the largest hub in Vietnam – attracting established tech firms such as Microsoft - there are other areas of interest too. Areas such as Hanoi, Da Nang and more offer an excellent work-life balance and specific opportunities for tech start-ups focusing on energy, finance and more. The key draw for start-ups looking to establish themselves in Vietnam is the sheer untapped potential of the broad customer base, and the low rates of modernisation in significant industries. For example, there is currently a high percentage of unbanked population in Vietnam, with the banking and financial services sectors in need of development. The lack of retail banking with payment cards and absence of wealth management services means that fintech entrepreneurs can do well in the area, given Vietnam’s surprisingly high mobile penetration. Similarly, the agribusiness sector represents 20% of the country’s total export, but with little modernisation and issues with boosting productivity, start-ups or scale ups looking to revolutionise this area could make themselves a solid foothold. The geological diversity of Vietnam is also of significant interest. At present, Vietnam is powered by coal, gas turbines and hydropower, but the government is encouraging more renewable energy usage and plans to triple the use of solar and wind energy for electricity production by 2030. With a southern area very prone to sun, and plenty of mountainous terrain and coastal access with wind energy potential, start-ups focusing on solar and wind energy could do very well.
With expert input from Sanjay Sidhu, Executive Director for Advisory at BDO Malaysia. Sanjay has over 30 years of auditing experience, working across high-end technology solutions.
WITH A YOUNG, DYNAMIC POPULATION OF 96 MILLION INHABITANTS, THIS NATION’S ECONOMY HAS EXPANDED FROM ITS TRADITIONAL AGRICULTURAL ROOTS TO EMBRACE NEW TECHNOLOGIES
THE TECH BUSINESS ECOSYSTEM Vietnam’s government, keen to expand and develop new industries, has made the country one of the most active in the region for digital progress. The developing start-up landscape - which is currently a hotbed for fintech start-ups – has emerged from a changed Vietnam, which has developed into a global exporter of electronics and textiles. The country’s capital city, Ho Chi Minh, is home to many developing technologies and established multinationals. Leading sectors include business process outsourcing (BPO), and its sub-sector, Information and Communications technology (ICT); retail banking and fintech; and e-commerce. The latter is one of the most promising tech-related sectors for investors; the e-Conomy SEA 2019 report by Google and Temasek found that the value of Vietnam’s e-commerce market reached $5 billion in 2019, rising 81% when compared to 2015, and predicted to reach $23 billion in 2025. The Vietnam E-commerce Association (VECOM) also revealed that the e-commerce growth rate of Vietnam is 30% year-on-year, making it a particularly attractive area for technology start-ups.
OVERVIEW: AN EMERGING MARKET WITH UNTAPPED POTENTIAL
Vietnam’s fast-growing economy, young and STEM-educated workforce and diverse areas for modernisation have led to a bustling start-up scene. With a low cost of labour and international interest, there is high potential for bold ideas to thrive. THE TECH LANDSCAPE Vietnam - or the new Southeast Asian “tiger” economy, as it has become known – has been one of the fastest-growing economies in Asia over the last ten years. With a young, dynamic population of 96 million inhabitants, this nation’s economy has expanded from its traditional agricultural roots to embrace new technologies, foreign investments and expatriate workers. Vietnam’s political stability, particularly when compared to other emerging nations, has attracted technology companies looking to service the wider region. The country’s lower costs of labour and supportive government policies have attracted both multinationals and start-ups to its shores. Its proximity to Hong Kong, Korea and China, and its competitively low cost base are appealing to many businesses, both in Asia and further afield.
THE KEY DRAW FOR START-UPS LOOKING TO ESTABLISH THEMSELVES IN VIETNAM IS THE SHEER UNTAPPED POTENTIAL OF THE BROAD CUSTOMER BASE
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