Vietnam is experiencing a technological revolution. Once primarily known for its manufacturing sector, the country is rapidly transforming into a tech hub. A young, digitally savvy population, combined with supportive government policies, has created a fertile ground for innovation. This burgeoning tech ecosystem is driving economic growth and societal change.

From software development and IT outsourcing to e-commerce and fintech, Vietnam’s tech industry is thriving. The country has attracted significant foreign investment and is home to a growing number of tech startups. This digital transformation is reshaping industries, creating new job opportunities, and improving the lives of millions of Vietnamese people.

While challenges such as infrastructure development and talent retention persist, Vietnam’s tech landscape is undeniably promising. The country’s potential to become a regional tech leader is evident, and its journey into the digital age is one to watch.

Vietnam’s Startup Ecosystem

Vietnam’s startup ecosystem has witnessed substantial growth in recent years. A confluence of factors, including a young, tech-savvy population, government support, and increasing foreign investment, has contributed to this development. Major cities like Ho Chi Minh City and Hanoi have emerged as hubs for entrepreneurial activity, fostering a dynamic environment for startups.

The Vietnamese startup landscape is characterised by a focus on sectors such as fintech, e-commerce, and food technology. While the ecosystem has produced notable successes, challenges including talent shortages, access to funding, and regulatory hurdles persist.

Despite these challenges, Vietnam’s startup ecosystem presents opportunities for innovation and growth. With continued investment and policy support, the country has the potential to solidify its position as a regional startup hub.

Box 1: Vietnam startup funding falls in 2023

Funding in startups in Vietnam was down 17 percent to US$529 million in 2023, according to a report by Dove Ventures. The big winners were healthcare and education startups which recorded increases of 391 percent and 107 percent, respectively.

Vietnam’s technology industry: Key players

Vietnam’s tech industry has experienced rapid growth, propelled by a confluence of factors including a young, tech-savvy population, supportive government policies, and increasing foreign investment. This has resulted in a dynamic ecosystem with a diverse range of players, each contributing to the nation’s digital economy.

Tech Conglomerates

Viettel Group: Originally a telecommunications company, Viettel has expanded into various tech sectors, including fintech, IoT, and digital services. The company’s strong financial backing and extensive infrastructure have enabled it to drive innovation across multiple fronts.
Vietnam Posts and Telecommunications Group (VNPT): A state-owned enterprise offering a wide range of telecommunications and IT services. As a long-standing player in the market, VNPT has a strong customer base and is undergoing digital transformation to remain competitive.

Box 2: FPT’s overseas sales boom in 2023

FPT Corporation, trading under the ticker FPT on the Ho Chi Minh Stock Exchange, is a leading Vietnamese technology and IT services conglomerate. Founded in 1988, the company operates in three core business areas including technology, telecommunications, and education.

Notably, a significant milestone was achieved for the firm in 2023 when IT service revenue from overseas markets surpassed US$1 billion, marking a 28.4 percent increase year-over-year. This was propelled by surging demand for enterprise software development, particularly in Japan—a key market for FPT—and the Asia Pacific region. Read more…

Software Development and IT Services

CMC Corporation: A major player in the IT services and software development sector. With a focus on both domestic and international markets, CMC has established itself as a leading provider of IT solutions.
Rikkeisoft: Known for its expertise in software development and IT consulting. Rikkeisoft has built a reputation for delivering high-quality software products and services to clients worldwide.
SotaTek: A rising star in the software development and IT outsourcing industry. SotaTek’s rapid growth and focus on emerging technologies have positioned it as a promising player in the market.
TMA Solutions: Specialises in software development and IT outsourcing services. TMA Solutions has a strong track record of delivering complex IT projects for clients across various industries.
VCCorp: A digital media and technology company with a focus on online advertising and content. VCCorp’s deep understanding of the Vietnamese digital landscape has enabled it to build a strong portfolio of digital properties.

Box 3: Opening a data centre in Vietnam

Opening a data centre in Vietnam is not always easy. Not only are there several technical requirements that need to be met, but there are also a broad number of considerations that need to be made from choosing the right location, to the right business structure, to finding the right workers, for example.

Understanding the nuances of opening a data centre in Vietnam and the complexities of business establishment procedures in advance of entering the market can therefore be crucial to the success of a new data centre in Vietnam.

To learn more see: How to Open a Data Centre in Vietnam: Ultimate Guide 2024

E-commerce and Fintech

VNG Corporation: Started as a gaming company, VNG has expanded into e-commerce, digital payments, and other tech ventures. With its diverse portfolio and strong user base, VNG has become a major force in the Vietnamese tech ecosystem.
Tiki: A leading e-commerce platform in Vietnam. Tiki’s focus on customer experience and fast delivery has contributed to its success in a competitive market.
Momo: A dominant player in the mobile payment and fintech space. Momo’s extensive network of partners and user-friendly interface have made it a popular choice for consumers and businesses alike.

Other Notable Companies

AMELA Technology: A rapidly growing tech company with a focus on software development and IT solutions. AMELA Technology’s ability to adapt to market trends has fueled its expansion.
MobiFone: A major telecommunications operator with a growing presence in digital services. MobiFone’s strong network infrastructure and customer base provide a solid foundation for its digital initiatives.
Bkav: Known for cybersecurity and antivirus software. Bkav’s commitment to protecting digital assets has solidified its position as a leader in cybersecurity.
Cốc Cốc: A Vietnamese search engine and web browser. Cốc Cốc has gained market share by offering features tailored to Vietnamese users.

Box 4 : Taxing cross border technology service providers

Cross border service providers like Facebook, Apple, and Netflix, contributed to Vietnam’s state coffers to the tune of VND 4 trillion or about US$157.4 million from January to May 15 of 2024. This is part of an initiative to tax cross border technology firms without local offices that was launched in 2022. Before 2022, many of these firms were paying almost no tax in Vietnam. Read more…

Regional Focus in Vietnam’s Tech Industry

Vietnam’s tech industry is not evenly distributed across the country. Certain regions have emerged as hubs for specific tech sectors, while others are catching up.

Ho Chi Minh City

Often referred to as Vietnam’s economic heart, Ho Chi Minh City is undoubtedly the epicenter of the country’s tech industry. It boasts a thriving startup ecosystem, a large pool of tech talent, and a concentration of foreign investment. The city is particularly strong in e-commerce, fintech, and mobile app development.

Hanoi

As the nation’s capital, Hanoi has a strong presence in the IT services and software development sector. It houses numerous government agencies and large enterprises, creating a steady demand for IT solutions. Additionally, Hanoi is gaining traction as a hub for education and research, with several universities and research institutes focusing on technology.

Da Nang

Often overlooked, Da Nang is emerging as a tech hub in its own right. The city has a focus on software development, IT outsourcing, and information technology services. It also benefits from a relatively lower cost of living compared to HCMC and Hanoi, making it an attractive location for businesses.

Other Regions

While HCMC, Hanoi, and Da Nang dominate the tech landscape, other regions are also contributing to the industry’s growth. For example, the northern provinces of Hai Phong and Bac Ninh have become manufacturing centres for electronics and semiconductors, attracting foreign investment and creating a demand for related tech services.

It’s important to note that the tech industry is dynamic and rapidly evolving. The regional landscape may shift as new opportunities emerge and infrastructure improves.

What’s next?

Vietnam’s tech industry has emerged as a dynamic and rapidly evolving sector, contributing significantly to the country’s economic growth. With a combination of government support, a burgeoning startup ecosystem, and a skilled workforce, Vietnam has positioned itself as a promising tech hub in Southeast Asia. While challenges such as infrastructure development and talent retention persist, the country’s potential for continued growth is evident.

As Vietnam navigates the complexities of the global tech landscape, it is crucial to foster innovation, invest in research and development, and create a conducive environment for both domestic and foreign businesses. By leveraging its strengths and addressing its weaknesses, Vietnam can solidify its position as a leading tech player in the region and beyond.

With this in mind, to keep abreast of what’s happening in Vietnam’s technology industry, foreign technology industry professionals should make sure to subscribe to the-shiv.

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