Mic’d Up With MAAS Episode 11 : Tracing the Startup Growth Curve in Vietnam

The mention of Vietnam recreates a sensation beyond its aromatic cuisine, terraced hills and beautiful blue oceans. Today, Vietnam is also a force to reckon with in the startup ecosystem with several disruptive apps being birthed in the country. Ankit Rawal, Senior Director – Sales & Marketing, MAAS catches up with James Vuong, Founder & CEO, Infina to get a first-hand experience of what goes into cracking the Vietnamese app market 

Here are the edited excerpts from the conversation.

Ankit : How would you describe the shift in financial habits in Vietnam when it comes to digital payments?  What are some of the interesting FinTech categories emerging among customers?

James: Vietnam has a lion’s share of young, millennial population who are comfortable with online transactions. They are looking to do their banking chores on the go and fast. The behavior is such that be it transactions, food delivery, keeping in touch or even buying or selling – everything is preferred online. We are talking about, I think, at least 3-4 million transactions a day.

In the investments landscape the number of brokerage accounts have also increased very rapidly. For instance, in 2020 new accounts doubled out of 2019 and in 2021, probably triple that of 2020. Just the first five months alone is already more than all of last year combined by 20%. We are talking about like half a million new accounts created in the first five months. So, I hope that gives you a sense of the activity.

Ankit : Can you share a little bit about the startup ecosystem in Vietnam?

James:  The ecosystem is super exciting. Thirteen years ago, we didn’t have a lot of good companies to invest in. But now if I have a hundred million, I can easily get it all invested in a short time. And then you also see unicorns coming up in Vietnam.

So besides VNG, which is the first unicorn in Vietnam, there are quite a few players in that category. Another unicorn would be VNLife or VNPay. So VNPay is the number one payment company. They spun off another division called VNLife and just raised a sizable funding.

Then there’s AXinfinity which is in crypto space. And they generated so much revenue in about 4 years that they have reached an approximate valuation of $ 5 billion. So that’s pretty exciting, I think in terms of just the status of these companies. Obviously a public listing via SPAC or direct listing maybe even on the NASDAQ would be super awesome.

If you look at the fundamentals, like the talent pool has gotten so much better. A lot of talents are coming back from Ivy league schools, in the U S and elsewhere, and taking leadership roles. In a lot of the companies the local founders are becoming super savvy now; they know how to play the investing game, as well as they know the growth hacking game in the startup space. They have reached a maturity level to iterate and offer market fit product/service solutions to an increasingly sophisticated mass.

Ankit : If I’m an app marketer who’s outside Vietnam, what are the right channels to acquire the audience? What is the way to navigate the language and cultural barriers?

James: Vietnam has been fairly open in terms of having the FAANGs –  Facebook, Netflix, Google, Instagram, TikTok, YouTube etc.  So those are some of the channels that can be definitely leveraged and the language is not that hard to overcome.

If you just have a local content person that understands how to produce good content, then you’re set. But the channels are the usual suspects. Vietnam is actually quite aware of the foreign influence so nothing too localized. For example, there is Zello, which is the biggest chat app. So if you want to run a campaign that involves messaging on chat apps you obviously have to work with Zello.

But, outside of that people use Facebook messenger a lot as well. And, and, you know, Facebook is the predominant social media channel along with Instagram. I think for a foreign company they won’t have too hard of a time except for the language.

Ankit: We’ve seen some disruptive apps come out of Vietnam. Are Vietnamese entrepreneurs more confident about taking their businesses mobile-first as compared to a couple of years ago?

James: I think it’s getting to the stage where the entrepreneurs and founders in Vietnam are very tapped into what’s going on in other markets. And they follow very closely. So if they see anything interesting, they would start thinking about,”Hey, what if I do that for Vietnam?”

You know, In the FinTech space, there’s a few big giant players already. Now people are thinking about maybe doing more sort of niche or B2B type of payment. Then there’s formats like lending, which started out with a lot of peer to peer lending and that caused a lot of regulatory issues. But there are still some key players who have earned positive trust.

Then there’s WealthTech or the investing apps – some focusing on passive, some focusing on active investing. The InsureTech players offer insurance products. We also cannot dismiss the super apps like Grab or Gojek from Indonesia and Singapore. The SEA group is looking at building superapps in the eCommerce and payment verticals. For ride hailing or food delivery, likely the margin is low and people want to get into FinTech for the better, for a longer term profitability.

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