Viet Nam become a magnet for region's start-up investment
Viet Nam saw a robust development of start-up firms last year and was on track to become the next growth driver of Southeast Asia and play a vital role in the region’s start-up golden triangle.
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| With a crowd of young consumers and a workforce that has a high demand for digital technology in the post-pandemic period, the start-up market of Viet Nam was predicted to take off in the next few years. Illustrative image. (Photo: Moneycontrol) |
Viet Nam is becoming a magnet in Southeast Asia for attracting investment in start-ups, driven by a convergence of a young consumer and workforce base with increasing demands for digital technology in the post-pandemic period.
According to Vu Quoc Huy, Director of the National Innovation Centre (NIC), Việt Nam saw a robust development of start-up firms last year and was on track to become the next growth driver of Southeast Asia and play a vital role in the region’s start-up golden triangle.
He cited statistics that investment into start-ups hit a record high of US$1.4 billion in 2021 despite the impacts of the COVID-19 with strict social distancing measures in place, breaking the previous record of $874 million in 2019.
The number of new businesses set up in the first four months of this year increased by 12.3 per cent over the same period last year, which, together with positive growth momentum in foreign investment inflow, demonstrated the country’s large potential for the development of the start-up ecosystem, he said.
He expects that investment in start-ups will double in the next three years.
With a crowd of young consumers and a workforce that has a high demand for digital technology in the post-pandemic period, the start-up market of Viet Nam was predicted to take off in the next few years. About 70 per cent of the population was below 35, and the literacy rate of 95.4 per cent is among the highest in Asia.
Domestic consumption was forecast to grow at an annual rate of 20 per cent, which would make Việt Nam a vital driver of Asia’s consumer market over the next decade. The middle-class population was also growing at the fastest pace in Southeast Asia, accounting for about 40 per cent of the people today, up from just 10 per cent in 2020. By 2030, the middle-class population was expected to make up 75 per cent.
There was also an increase in digital consumers, with more than 8 million added from the beginning of the pandemic to the first half of 2021, with 55 per cent from non-urban areas.
Viet Nam’s Internet economy was estimated at 21 billion USD in 2021, up by 31 per cent, driven by the e-commerce market, which expanded by 53 per cent. The Internet economy was forecast to reach 57 billion USD with a compound annual growth rate of 29 per cent.
Kim Ngọc Thanh Nga, Head of the NIC’s Ecosystem Development Department, said that Việt Nam would develop at an unprecedented rate in the next decade, fuelled by high Internet penetration, a huge domestic market, and innovative ideas, which could be expanded abroad together with the presence of funds to promote start-up development.
Significantly, during the past decade, the Government has invested in significant pillars from education to infrastructure and ecosystem development, which was creating an essential foundation for Viet Nam to attract investment into start-ups.
Huynh Huu Trung, the founder of Mio, a platform for fresh food, said that Việt Nam, Singapore and Indonesia were creating a start-up golden triangle in Southeast Asia.
Trung said that start-ups needed to understand what business models would work well in these markets to create the best products and expand in the region.
(Source: VNS)
