Boasting the 33rd largest economy in the world, Vietnam has transformed fairly rapidly over the past few decades, making the move from being a centrally planned economy to a more market-oriented system. As such, Vietnam is still classified as a lower-to-middle-income country, but its consistently growing GDP and evolving economy make it a rising star in the region.
There are several factors that contribute to Vietnam’s relative success in Southeast Asia, including its dominance in manufacturing, its favourable trade agreements and increasing foreign direct investment in the region, among other things.
Indeed, the country has both strengths and challenges in light of its economic situation, all of which factor into Vietnam’s achievement in having produced a healthy number of unicorns, with six privately-owned companies currently boasting $1-billion status.
Vietnam’s Economy
The Vietnamese economy is very much based on manufacturing and exports, especially in textiles, footware, agricultural products and, of course, electronics. Major global corporations like Samsung, Apple and Nike have established significant presences in the country, utilising competitive costs and skilled labour.
Part of Vietnam’s economic success, however, comes down to its integration in global markets which has been facilitated by a plethora of important trade agreements.
Naturally, these favourable conditions make the country an attractive location for investment. A few other draw cards include the company’s relative political stability, strategic location and investor-friendly policies.
Furthermore, the government is also playing its part in offering tax incentives, streamlined business registration processes and industrial zones, all of which help attract multinational corporations, and have done wonders in bringing in foreign direct investment (FDI).
With these factors in mind, some of Vietnam’s most poignant and noteworthy economic strengths include:
- Young, Educated and Skilled Workforce
- Strategic Location
- Goverment Reforms and Strong Policy
Unfortunately, however, while Vietnam has a lot going for it, the economy isn’t without its challenges:
- Massive Dependence on Exports
- Severe Income Inequality
- Environmental Concerns
- Gaps in Infrastructure
These issues are fairly standard in developing countries and they are, by no means, factors that’ll stop Vietnam from continuing to grow and improve conditions. However, they are still significant and will require a great deal of work to mitigate.
So, What’s Vietnam Like For Startups?
Much in line with the progress of the country’s economy, Vietnam’s startup ecosystem has enjoyed increasing success over the last decade or so, having become one of Southeast Asia’s most vibrant hubs. Fuelled by a young, tech-savvy population and robust economic growth, Vietnam has managed to produce some really successful startups.
Government support has also played a vital role in the process, with initiatives like the Vietnam Silicon Valley Project and the National Innovation Center providing young entrepreneurs and startups with access to all-important mentorship and funding at critical points in their journeys.
While challenges including regulatory hurdles, limited early-stage funding and talent retention remain problematic, Vietnam’s growing digital economy and rising foreign investment signal a promising future for its startups on the global stage.
Top Unicorns in Vietnam
There are several factors that contribute to countries being deemed particularly successful from an economic standpoint, and one of those factors is the presence of unicorns.
Indeed, Vietnam has produced a very healthy number of unicorns over the years, and at the moment, it’s five companies that are currently valued at more than $1 billion and are privately owned.
Axie Infinity: $3 Billion
Axie Infinity is the developer of a gaming platform that is designed with the intention of allowing players to earn in-game resources that can be traded in real life.
Founded in 2018, the company specialises in creating a digital pet community that is centred on collecting, raising and battling creatures that are built on the Ethereum network.
MoMo: $2 Billion
Founded in 2007, MoMo is the developer of an online mobile payment application that enhances payment services for both domestic and international usage.
Part of MoMo’s offering is an e-wallet service that helps transfer money and buy commodities easily and safely. Ultimately, the platform allows users to do financial transactions in a hassle-free way.
Tiki: $1 Billion
Launched in 2010, Tiki is an e-commerce platform that is designed to provide customers with multi-category products, including things like fashion accessories, electrical appliances, mobile electronics and health products.
The primary objective of Tiki and its services is to provide a smooth and secure shopping experience, allowing customers to shop for a variety of different types of products from a single platform.
VNLIFE: $1 Billion
VNLIFE is a financial services provider founded in Hanoi in 2007. The company offers a plethora of services, including SMS banking, digital banking and distribution services by means of advanced technology like artificial intelligence, big data and more.
Ultimately, the purpose of the platform is to simplify everyday transactions by providing cashless payments and more for added convenience and efficiency.
VNPAY: $1 Billion
VNPAY is the developer of an electronics payments software that is designed to meet the payment needs for daily services in a way that’s quick, convenient and safe. Other services include e-wallet facilities and mobile banking that allow customers to make and receive payments conveniently and safely.
Established in 2007, VNPAY currently has about 4,000 employees and is based in Hanoi, Vietnam.
