With its promising young demographic and rising population, Vietnam is is one of the most attractive emerging markets for both – the global investor and the new-age entrepreneur.
While the growth story and the market numbers are tempting enough for several companies to start aggressive expansion forays into Vietnam, the investment needs to be tempered and supported by a clear understanding of the cultural, social and financial ethos of the country.
According to the global serial entrepreneur Thuy Thanh Truong, a clear insight into Vietnamese way of working, would help an investment forays find success, quickly.
Invest in a good team
His key advice to investors looking to tap growth avenues in Vietnam’s burgeoning startup scene is: “ensure they you are investing in a team that can execute, more than a product or idea”.
“There are many good products and ideas but the people behind it might not be right or able enough to execute it. The investors may end up with a business without a good foundation, that is poorly executed,” the co-founder and CEO of Tappy Co shared at Echelon Malaysia 2014.
Employees have lesser financial obligations
He pointed out, another point of social difference that has a tremendous impact on the hiring and team building process in Vietnam. Thuy highlighted that most Vietnamese employees “have no financial obligations”, which made the employment pool less concerned about losing a job.
“The Vietnamese youth are encouraged to stay with their parents, even after marriage. A 25-year-old living with the parents will still have a monthly allowance from the parents,” she said, “If you decide to fire them, they won’t care that much.”
Cash on delivery, all the way
As for entrepreneurs, Thuy said founders should take note that Vietnamese consumers are heavily reliant on cash on delivery in this mobile first market
“Credit card penetration is still quite low (in Vietnam); so when purchasing items, it is largely through cash on delivery,” she said, pointing out a barrier that entrepreneurs have to find a way around while conducting business in the country.
Mobile gaming excitement
For mobile app purchases, Vietnam has a homegrown app called Appota Pay. This enables the consumers to make mobile transactions on app stores without a credit card.
According to her, mobile games was a huge area for growth and consumption in the Vietnamese market.“There are game cards that gamers buy from shops for their mobile games,” she explained.
Not many Angel Investors
Additionally, angel investment is a fairly new concept in Vietnam as well, she said. “There are some billionaires in Vietnam but they are very low profile, unlike in the US. It is up to your network to find them,” she informed.
In the past ten years, the Vietnamese population has increased from 81.44 million to 89.71 million.“We will be reaching 100 million people soon,” Thuy noted on the population growth momentum.
Tappy Co, a Vietnamese startup is among the selected 500 Startups, with 15 million downloads for its social app worldwide.
Thuy, who worked in the Silicone Valley, was formerly the CEO of GreenGar Inc.