Innovation is fast becoming one of the key engines of growth for Vietnam’s economy. Local companies across multiple industries have been developing quickly in areas which have been traditionally dominated by foreign companies attempting to enter the Vietnamese market. However corporate Vietnam has had its fair share of success in recent years when it comes to the likes of Viettel, VietJet and large conglomerate Vingroup which manufactures cars, smart phones and develops property. These companies have attracted a large amount of attention outside of Vietnam.
We have decided to take a deeper look ‘under the hood’ in Vietnam, to identify the companies which may not have the same international attention or scale as some of these large Vietnamese corporates, but are driving innovation in Vietnam. Vietnam’s digital economy has tripled in size since 2015 and innovation in this space is expected to continue at a rapid pace.
We have identified the Top 5 Innovative Vietnamese companies to watch in 2020 across e-commerce, financial technology, transportation, education and communications.
Luxstay Co (Accommodation)
The home sharing startup’s network now consists of around 10,000 properties throughout Vietnam. Targeting medium and high-end customer segments, Luxstay also provides the hosts with asset management and maintenance solutions.
Luxstay goes further than the traditional home sharing model, by diversifying its offering. They work with real estate partners to capitalize on local tourism and aim to have completely different listings than on other platforms.
You may think there is nothing new about a home sharing company, but what struck our interest was the Korean investment. Korean is a huge investor in Vietnam and clearly, they have seen an opportunity here [see IP Mekong’s recent article on “Legal Due Diligence in the Digital Music Industry of Vietnam”]. Luxstay has managed to raise around USD$10m in funding in the last year, with Korean company ‘GS Home Shopping’ investing USD$4.5m.
Sendo Technology (E-Commerce)
Sendo is one of the largest e-commerce platforms in Vietnam and has become the country’s second-most downloaded app. The platform’s 500,000 sellers offer a large range of clothing, homewares and personal goods to its 12 million customers across the country. Sendo has also developed ‘SenPay’ – its own e-wallet application for payment. In November 2019, the company secured a further US$61 million investment.
Again you may think nothing unusual about an e]-commerce platform but the size of the market here is significant, and add to that the lack of retail outlets compared with developed countries, and a population looking for places to spend its money, and you have an explosion in e-commerce waiting to happen.
VNG Corporation (Digital Content)
VNG is the only Vietnamese company to be considered a “Unicorn” (a startup valued at over $1 billion). Its application Zalo offers not only calling and texting, but also social networking, shopping, bus timetables, weather, restaurant hygiene monitoring, medical updates and health check scheduling features. The app has been embraced by over 100 million users as of 2018.
In 2016, VNG launched the localised version of Zalo in Myanmar. The app attacted two million users only two months after its introduction. VNG has established a server for the operation of Zalo in Myanmar, with the target of having nine million users in the country.
Zalo is an incredible success story about a Vietnamese tech company branching out beyond its borders across South East Asia to capture new markets.
Vietnam is far behind other companies in Asia when it comes to digital payments, but this is quickly changing. Vietnam’s fintech industry is expected to reach US$7.8 billion in revenue by 2020 and companies like MoMo are leading the charge. M_Service operates MoMo, an e-wallet and mobile payment app enabling users to pay online, make peer-to-peer transfers, buy game credits, top-ups, and pay utility bills. Integrated with 24 domestic banks and various international payments networks, MoMo has over 12 million users.
MoMo managed to raise $100 million in funding from Warburg Pincus at the beginning of 2019 which is the latest in 3 substantial rounds of funding from Goldman Sachs and Standard Chartered Bank.
Topica (Smart Education)
Topica grew from an e-learning infrastructure development project sponsored by Qualcomm, Microsoft, Hewlett Packard and USAID. The company now provides online interactive education including bachelor's degree programs, English communication tutoring and training courses in a variety of topics such as IT, personal development, business and startup, design, marketing, law, etc. Topica employs virtual reality technology and Google Glass in its courses.
Topica has expanded into the Philippines, Singapore, Thailand, Indonesia and the United States, and has also signed a partnership deal with the edu tech giant Coursera.
These types of innovative companies will only continue to grow rapidly as the economy in Vietnam roars at its current pace. Watch this space, as these are ones to watch!
Written by: Khanh Nguyen, Trung Tran