Vietnam Business Briefing: Seizing opportunities in Fintech and eCommerce
12 May 2022: The Vietnam Business Briefing marked the official launch of the Australia Vietnam Policy Institute (AVPI).
Martin Bean CBE, one of the three Vietnam Business Champions of 2022, and the former Vice-Chancellor of RMIT University provided opening remarks, reflecting on his time in the region and the transformative shifts that are taking place.
He identified key areas of opportunity in Vietnam’s fintech space including digital banking, payments, cybersecurity and cryptography. These opportune sectors are underpinned by the Vietnam government’s goal of increasing cashless payments to over 50 percent by 2025 and the accompanying growth of Vietnam’s middle class, which is expected to surpass 30 million people.
Changing demographics and the penetration of e-wallets such as ZaloPay have accelerated ecommerce uptake in Vietnam. Currently, the most popular ecommerce products in Vietnam are clothes, personal care products, consumer electronics and household appliances.
The panel discussion featured industry professionals:
· Tim Aman, Partner, BDO Australia
· Phillip An, Co-founder, Homebase
· Sandra Tran, Director, Trade and Investment, Global Victoria
Danielle Rajendram, Associate Director, Advisory and Insights, Asialink Business moderated the discussion.
The investment landscape
According to Phillip An, there are two categories of emerging investors in Vietnam; investors that invest in companies solving Vietnam specific problems and originate organically in Vietnam, and investors that invest in companies that have matured in developed countries that are now transitioning into Vietnam, for example businesses with a Buy Now Pay Later business model.
“[Financial] capital in Vietnam is becoming more of a commodity than a resource.”
Phillip emphasised the value of Australian businesses that understand how BNPL companies grow and the opportunity in Vietnam for this knowledge.
Relationships and partners
A reoccurring theme of the discussion was the importance of building strong relationships. Tim Aman spoke of leveraging the local Vietnamese community in Australia, as well as Australian government support in Vietnam to develop a network of trusted Vietnamese contacts.
His recipe for success was to connect with good partners through this network, work with them on your strategy, ensure you find the correct corporate structure, use the right advisors when navigating regulatory the environment, do due diligence and be committed to stay in the market for a while.
A peek into the minds of Vietnamese consumers
Sandra Tran proposed a guiding question for ecommerce businesses in Vietnam: “What is the most convenient?”. Vietnamese consumers are looking for “fast, quality and cheap” goods. She highlighted that it’s not uncommon for Vietnamese consumers to cancel an order and request a refund if the product is taking too long to arrive or avoid engaging with businesses that have difficult to understand or unreliable promotions.
For this reason, she emphasised that it’s vital to understand your product, partner and platform. Each platform in Vietnam (Shopee, Tiki, Lazada, Sendo and The Gioi Di Dong (Mobile World)) have different target demographics, getting alignment on this point is vital for success. She also advised on being consistent across whichever platforms you are using, since Vietnamese will price match given the high penetration of mobile phones.
Location, Location, Location
It is important to note that different regional and local governments provide tax incentives to encourage industry in their area and investment to the region. This varies based on sector and product but is an important consideration when researching your entry strategy into Vietnam.
Learn More
If you are interested in learning more on AVPI’s upcoming events, reports or becoming a knowledge partner visit their website here.