Walk into any of the many coffee shops in Ho Chi Minh City and you will see it: Young men and women hunched over their laptops, sipping a ca phe sua da, busily trying to build the next Zalo (a Vietnamese tech giant) or Ticketbox (a fast-growing HCMC online ticketing startup).
The number of startups has recently exploded in Vietnam. Funding is becoming increasingly available and entrepreneurship more accessible in cities like Ho Chi Minh City, Da Nang and Hanoi. Although the scene is still in the emerging stage, there has been incredible progress.
Here are five reasons why you should quit your stuffy corporate job and start a business in one of the world’s most dynamic frontier markets — before it’s too late!
1. Vietnam’s economy
Vietnam’s economy only “started” some thirty years ago. After more than a century of foreign occupation and numerous wars, the Vietnamese government began liberalizing the economy in 1990. Since then, it has been the second-fastest growing economy in the world, right behind China.
Vietnam is classified as a lower middle-income country but it’s moving up the development ladder fast. This is due, in part, to an explosion in the communication sector.
As the second most populous country in the Southeast Asia region and with a young, tech-hungry population, Vietnam is positioning itself to become Asia’s next startup hub.
2. Government support
The Vietnamese government is aware of the importance of the tech sector in driving future economic development. They proclaimed that Vietnam should be a “startup nation” and made 2016 “the year of the startup.” Thankfully, those words have been backed up by concrete gestures: The Ministry of Science and Technology established a Vietnam Silicon Valley that has already delivered training and funding to over thirty startups.
The Vietnamese government is also investing a lot in education, about 6.5% of its GDP. It’s the highest spending in education per capita in all of Southeast Asia. As a percentage, that’s double what Singapore is pumping into its education system.
The government has also successfully attracted tech-based multinational corporations like Samsung, Intel, and IBM to invest in Vietnam. Those companies established regional operations here and have brought with them not only money but also executive and technical knowledge that the startup scene can put to good use.
3. Vietnamese skills
In terms of computer skills, Vietnam is doing far better than other developing countries. Students go through demanding mathematics and programming courses starting in primary school, learning touch typing and how to use various operating systems.
According to the Nikkei Asian Review, Vietnam clearly has the potential to become a business outsourcing power like India and the Philippines. Big tech corporations like Intel and Facebook are already turning their eyes towards Vietnam to recruit talented coders. Young Vietnamese graduates often struggle to find a regular job and instead turn to the exciting world of tech startups, capitalizing on their talents and ambition.
And with a diaspora of four million people worldwide, a lot of overseas Vietnamese come back to Vietnam with ideas, tech skills and international expertise, contributing greatly to the country’s progress.
4. Internet penetration
Over the last few years, internet penetration in Vietnam has progressed by leaps and bounds. In a country of 92 million people, there were about five million internet users in 2004 and almost zero smartphone penetration. Those numbers jumped to 50 million internet users and 30 million smartphone users in 2017. It also happens to be Apples fastest growing market in the world.
While a lot of jokes are made about sharks gnawing on internet cables in the South China Sea and causing internet slowdowns, the fact remains that more and more Vietnamese are using online services. As a result, there are a growing number of startups competing for a piece of Vietnam’s online consumer base.
5. Pure enthusiasm
The hype is strong around tech startups in Vietnam. Their young and ambitious entrepreneurs are seeing the many opportunities and are doing everything to take advantage of them. Media outlets report every investment, creating more excitement about the whole scene. Many companies from Singapore, Hong Kong and the U.S. are investing and positioning themselves to benefit from this craze.
500 Startups is just one investment firm looking to get a piece of Vietnam’s startup pie. 500 Startups, a Silicon Valley-based venture capital firm recently set up a regional US$10 million micro fund in Ho Chi Minh City, aiming to make 100-150 investments into Vietnam-connected startups. According to a press release, the firm is bullish on Vietnam because, “it’s big, fast-growing, and underserved by seed stage venture capital firms.”
Our own company is a prime example of a successful and exciting startup. Focusing on Vietnam’s real estate market, Move in Saigon aims to ease some of the rental market’s pain points, where scams have somehow become the norm. We are among Saigon’s most trustworthy agents and have helped many tenants rent their ideal homes.
If you plan to exploit Ho Chi Minh City’s booming startup scene, you’ll need a place to live. Be sure to check out our extensive list of apartments and houses for rent.