Thanks to a combination of a youthful consumer and labor base with increased needs for digital technologies in the post-pandemic period, Vietnam is becoming a magnet in Southeast Asia for attracting investment in start-ups.
Despite the consequences of the COVID-19 and strong social distancing measures in place, Vu Quoc Huy, Director of the National Innovation Centre (NIC) presented figures showing that investment in start-ups reached a record high of 1.4 billion USD in 2021, beating the previous record of 874 million USD in 2019.
According to him, the number of new businesses established in the first four months of this year increased by 12.3 percent over the same period last year, demonstrating the country’s large potential for the development of the start-up ecosystem, along with positive growth momentum in foreign investment inflow.
Domestic consumption is expected to rise at a 20 percent annual rate, making Vietnam a key consumer market driver in Asia over the next decade. In Southeast Asia, the middle-class population was likewise rising at the quickest rate, accounting for nearly 40% of the population now, up from 10% in 2020. By 2030, the middle class was predicted to account for 75% of the population.
There was also a surge in digital customers, with over 8 million gained between the outbreak and the first half of 2021, with 55 percent coming from non-urban regions.
Vietnam’s Internet economy was predicted to be worth 21 billion USD in 2021, up 31%, thanks to a 53 percent increase in the e-commerce business. With a compound annual growth rate of 29 percent, the Internet economy is expected to reach 57 billion dollars.
A Southeast Asian venture capital firm Golden Gate Ventures (GGV) and the National Innovation Centre (NIC) have inked a collaboration agreement to expand their long-term connection and assist the growth of Vietnam’s start-up community and innovation ecosystem.
As a result, GGV will expand investment in Vietnam, promote interchange and stimulate new ideas and innovations, and work as a catalyst to help Vietnamese start-ups gain a stronger position in the region.
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