Vietnam’s Internet economy will soon reach $ 43 billion. Vietnam will also become the birthplace of new technological “unicorns” in Asia.
This statement has just been shared in the latest Do Ventures report. This is a venture capital fund with a target audience of startups in Vietnam and Southeast Asia.
|Vietnam is seen as an attractive destination in Southeast Asia in the eyes of technology investors. Photo: Trong Dat|
Vietnam is the preferred choice for technology investors
Do Ventures recently released a report on technology investment potential in Vietnam according to data for 2019 and the first months of 2020. This is a picture that gives an overview of the development of the platform. Internet economy in Vietnam.
According to Do Ventures, Vietnam is highly appreciated by the rapid growth of the middle class and the number of Internet users. Under the impact of the Covid-19 epidemic, the behavior of Vietnamese users is changing as more and more towards the online environment along with the growing popularity of non-cash payments.
With the rapid development of e-commerce, the supply of logistics services for this field is also increasing rapidly with the appearance of about 40 delivery companies.
|The number of logistics technology companies in Vietnam has increased sharply since 2015.|
In 2019, Vietnamese technology startups earned up to $ 861 million in investment from 123 deals. However, by the beginning of 2020, the amount of money invested in this field has decreased sharply, to only 284 million USD in Q1, down 22% from just a year earlier.
Vietnam welcomed 109 investors in the technology sector in 2019. By the first 6 months of 2020, only a limited number of new investors enter the market. Instead, investments in the past year mainly come from domestic companies and foreign investors who have had time to work in Vietnam.
|Priority level for each market of technology investors in ASEAN region over the next 12 months.|
In general, technology investors’ interest in the Vietnamese market remains high. According to a survey by Do Ventures, 50 investment funds operating in the six most powerful economies in Southeast Asia are directing their priorities to Vietnam in the next 12 months, followed by Indonesia. The sectors targeted by investors are education services, health and financial services.
The main reason investors in the technology sector choose Vietnam because of the better opportunities than other markets. In addition, there are other factors such as the advantages of macro factors, demographics, great growth potential due to rapid consumer behavior and taking advantage of low pricing during the season.
|The sectors that technology investors will prioritize when pouring capital into Vietnam.|
Vietnam’s Internet economy will reach 43 billion USD by 2025
Compared to other Southeast Asian countries, Vietnam currently ranks 3rd in terms of the number of internet users, 3rd in terms of mobile penetration and 2nd in terms of the average speed of mobile Internet connections.
The report by Do Ventures also appreciated Vietnam’s telecommunications industry when all three major carriers, Viettel, VNPT and MobiFone, have been testing 5G commercial. Viettel even broadcast the first test of 5G stations from mid-2019.
|Vietnam is at a “inflection point” of development similar to that of Indonesia seven years ago. Therefore, investors believe that this will be the time of birth of new technology “unicorns” in Vietnam.|
The popularity of the Internet has lifted Vietnam’s Internet economy to 12 billion USD in 2019. According to Do Ventures, the value of Vietnam’s Internet economy is expected to reach 43 billion USD by 2025.
In the period 2009-2012, Indonesia – the region’s largest economy, had 63 million Internet users. This is also the time to witness the birth of technology “unicorns” such as Tokopedia, Bukalapak, GoJek and Traveloka.
With 64 million Internet users, Vietnam is assessed to be at the same “inflection point” with Indonesia 7 years ago. And so, this is the place expected to appear new technology “unicorn” of the ASEAN region.
|Internet economy’s growth in key sectors compared to the rest of Southeast Asia.|
According to Do Ventures, Vietnamese people are increasingly interested in using services on the Internet, from traveling, dining to entertainment. This is shown quite clearly when the Internet penetration rate in Vietnam is 66%, of which 50.6% of the Vietnamese population has participated in online shopping.
Along with Indonesia, Vietnam is leading the region in the total value of goods in the Internet economy. This amount of goods will account for about 5% of the country’s GDP in 2019. The e-commerce, media and ride-hailing sectors in Vietnam are also expected to grow faster than other countries in the region.
|Statistics on the number and starting point of technology investors in Vietnam in the period 2014-2020.|
A survey of this investment fund with 101 start-ups in Vietnam shows that most of these companies are changing their business models and products and services to adapt to the new situation due to the influence of pandemic. This shows the adaptability and quick response of Vietnamese businesses. In addition, they also have very positive thoughts on the prospects of recovery from the pandemic.
The growth of the online payment market in Vietnam is also highly appreciated. In 2019, the volume of mobile banking transactions in Vietnam increased by 210% with a total transaction value of up to $ 240 billion. Transactions via the e-wallet system of fintech businesses also grew by 112% with a total transaction of $ 10.4 billion.
According to Do Ventures, in the coming time, the online payment market in Vietnam will grow faster and stronger, when the Mobile Money service is officially deployed with the participation of mobile operators.
Vietnam confidently uses its solutions to develop
Deputy Prime Minister Vu Duc Dam emphasized that Vietnam can confidently use its solutions for development, in which technology is given a pioneering mission.