Vietnam Industry Report 2021 by Nextrans

2021
VIETNAM
INDUSTRY
REPORT
POWERED BY:
NEXTRANS VIETNAM
Table of contents
A SNAPSHOT OF
1 VIETNAM’S INDUSTRY 01
LANDSCAPE IN 2021
2 LANDSCAPE BY INDUSTRY
2021
FinTech 09
PropTech 22
E-commerce 28
On-demand Grocery 40
EdTech 47
SaaS 61
MedTech 69
ESG 81
3 REFERENCES 85
1
2021
A SNAPSHOT
OF VIETNAM’S
INDUSTRY
LANDSCAPE
IN 2021
2
Foreign Direct
Investment 01
Positive Foreign Direct Investment in Vietnam
Vietnam may attract about 22.15 billion USD in foreign direct investment (FDI) in
2021, pointing to positive signs in FDI attraction in the first eight months of
2021 despite the complexities of COVID-19.
Despite impacts of the COVID-19 pandemic, the inflow of foreign direct investment
(FDI) into Vietnam still rose 4.4 percent year on year in the first nine months of 2021
to $22.15 billion.
An upturn was recorded in both value of investment to new projects as well as

additional capital to existing ones. Specifically, $12.5 billion was poured into 2,212
newly-licensed projects, up 20.6 percent over the same period last year, while 6.4
billion USD was added into underway projects, a rise of 25.6 percent.
Particularly, Vietnam saw many large-scale FDI projects in the January-September

period in 2021.
3
02 Investment
Landscape
In 2021, investment capital poured into start-ups in Vietnam has grown

dramatically, reaching more than $1.3 billion. The hot sectors that attract large
capital are financial technology (Fintech), games, education, healthcare, e-
commerce… Up to now, Vietnam has had about 3,800 start-ups, with 4 unicorns
(VNG, VNLife, MoMo, Sky Mavis) and 11 start-ups valued at over $100 million
(Tiki, Topica Edtech...).
When it comes to deal value, by the end of 2021, Fintech was the leading field in
terms of total deal value, with two deals worth over $100 million. In December,
Momo successfully raised $200M from Mizuho, Ward Ferry, Goodwater Capital, Kora
Management, with total valuation estimated up to $2 billion. VNLife - the company
that owns the payment service VNPay - also announced successfully raising more
than 250 million USD in a Series B funding round in July this year. After Fintech, e-
commerce is the second most attractive field of capital in 2021. Tiki made the largest
contribution with a Series E funding round of USD 258 million led by AIA.
Moreover, other big deals that made a strong impression on the market are: Sky
Mavis 152 million USD, Equest 100 million USD… Even some start-ups such as
Momo, Loship, Citics, Sky Mavis... have announced successful fundraising twice this
year, creating a strong inspiration for startups in the context of the pandemic.
4
Vietnam's start-up market is also the preferred destination
for 208 active venture capital funds, of which there are
nearly 40 domestic investment funds. Big names and active
funds in the market include VSV Capital - Nextrans, Vietnam
Silicon Valley, Mekong Capital, 500 Start-up Vietnam, Vietnam
Investment Group, IDG Ventures Vietnam, Do Ventures and
Genesia Ventures.
Entering 2021, when investment funds and startups are

increasingly adapting to the online working process, a series of
"deals" have been closed even during the time of social
distancing. In particular, in the second half of the year,
successive successful capital raising deals were announced by
startups. The majority are still Pre-seed, Seed, Pre-series A
and Series A rounds with amounts ranging from $500,000 to
$3 million.
5
03 Investment by
Industries
One of the areas with the most

announced capital raising deals in
the past year is Fintech. By number
of deals, Fintech was the leading
industry with 26,6% of total deal
count belonging to Fintech sectors
like digital payment, personal
finance, POS, SMEs financing,...
Edtech and E-commerce also have a
brighter picture in 2021, accounting
for approximately 17-20% of total
deals in the Vietnam startup market
in 2021.
According to Google statistics in the "Outstanding Search Trends" category, 5 of the

10 most searched keywords on Google in Vietnam in 2021 are related to online
teaching and learning tools. As a result, Edtech becomes an attractive "gold mine" in
the eyes of investors.
Most of deals invested in Vietnamese

startups in 2021 are recorded to be in
round Pre-seed and Seed, accounting
for 55,7% of total amount of deal count
in 2021. Beside that, the Vietnamese
startup ecosystem also witnesses 4,1%
of total deals belonging to Series
C,D,E like Momo, Tiki, Homebase,...,
and those kinds of deals are expected
to rise more, which shows the potential
of Vietnamese startups to boom in the
upcoming years.
6
A Sharp Recovery in
Investment Activity
during
Pandemic
COVID-19 04
Start-ups are expected to thrive after the COVID-19
period in Vietnam.
With 1.3 billion USD in deal value in 2021, more than double in 2020, Vietnamese
startups have proved their attraction in the context of general difficulties
because of the COVID-19 epidemic.
In recent years, Vietnam has emerged as a start-up hub, closely catching up with
countries like Indonesia and Singapore. With a young intellectual population, high
internet coverage and smartphone usage, and the support of the Government,
Vietnam will continue to maintain its position as an attractive destination for both
investors and investors. technology company.
The Vietnam Innovation and Technology Investment Report published by the National
Innovation Center (NIC) in June 2021 also analyzes the prospects for 2021 that,
although Vietnam's technology investment market confronted a slowdown due to the
impact of COVID-19 but the founders in Vietnam has used all possible resources to
stay strong and continue to grow. Crisis is always a powerful catalyst for disruptive
business models to emerge. With the Government's efforts to promote digital
economic growth and create a favorable business environment to attract foreign
investment, Vietnamese start-ups will have many opportunities to make
breakthroughs when operating in Vietnam. Investment activity gradually recovered.
More startups in Southeast Asia will emerge by the end of the decade, with the
annual number of initial public offerings (IPOs) in the region expected to surpass
300. Among them, Vietnam is considered a "rising star" of the region and will
become the country with the third largest startup ecosystem in Southeast Asia
in 2022 with more investment funds. Venture capitalists in the region are
committed to pouring early-stage capital into local startups.
7
2021
LANDSCAPE
BY INDUSTRY
8
FinTech
1.Market overview
1.1. South-East Asia Fintech market
2021 has seen an incredibly strong start to the year for the SEA Fintech market,
with very robust investment across venture capital, private equity and corporate
investments.
Southeast Asia’s large population of unbanked and growing Internet penetration

make it a hotbed for fintech innovation and an attractive market for e-wallets and
neobanks. In South-East Asia, fintech startups dominated dealmaking activity (from
January to September, 2021), with deal count up to 167 deals with at least $3.5B in
value.
9
The trend of investing in the fintech market in South East Asia is still
in demand and rising over the period from 2017 to 2021, with the
highest deal value and deal count in 2021.
There is at least $10B of unrealised value in VC-backed fintech

startups in Southeast Asia. Strategic M&As with local tech
companies have been the most common startup exits in the region
so far, with payments and Wealth Management startups as the main
acquisition targets. However, new targets emerged in Insurtech and
Enterprise Software in 2021 and so on.
Interestingly, Southeast Asian startups have a faster journey to exit

than startups in Europe or the US. In fact, 76% of the exited startups
were founded 1 to 6 years ago, compared to 53% in Europe and 46%
in the US.
10
1.2. Vietnam Fintech market
Of all notable fintech startups

in South-East Asia, MoMo and
VNPay from Vietnam are two
names that stand out, with
valuation above $2 billion and
$1 billion respectively in
2021. Those deals
significantly contributed to the
status of Vietnamese fintech
startups in the SEA Fintech
market, specifically in 2021,
Vietnam successfully
ranked 3rd (11%) in total
deal value in Fintech
companies by country.
Vietnam accounts for 9%

in deal count in 2021,
ranked fourth in SEA
fintech deals. Vietnam
also made a strong
breakthrough in the first 9
months of 2021 with $375
million invested in fintech
startups (11%) after MoMo
and VNPAY attracted 2
rounds of "super funding".
11
2. Competitive Landscape
2.1. A map of Vietnam’s Fintech ecosystem
It can be said that the number of startups in the Fintech field in Vietnam has always
increased year by year. In 2015, the whole market had only 39 companies (this
number increased to 74 startups respectively in 2017, and 124 startups in 2019), up
to now in 2021, it is estimated that there have been more than 150 companies
participating in the Fintech field in Viet Nam.
Figure: Fintech Ecosystem in Vietnam, Mar 2021. Source: iDauTu.com
Despite the remarkable development, compared with other countries in the region
such as Singapore (more than 1,150 companies), Indonesia (more than 510
companies), Malaysia (more than 370 companies),... this number is still quite
"modest", but it also noteworthy that Vietnam is still a profitable market for fintech
startups to bloom in the future, since some notable fields in fintech market in Vietnam
is still in urgent need to filled.
Among the listed fintech companies operating in Vietnam, the digital payment
segment still accounts for the highest proportion.
Fintech companies like MoMo and VNPay are the startup groups that receive the
hugest investments in Vietnam in 2021.
12
2.2. Rising sectors
While Vietnam's payments startups continue to grow and gain investor interest, peer-
to-peer lending (P2P lending) and the crypto/blockchain space are the two segments
with the strongest growth. These two services saw the number of startups grow from
less than 5 in 2017 to more than 15 startups in 2020, and continue to rise remarkably
in 2021.
Vietnam welcomes more startups in the fields of insurtech (insurance technology),

digital banking and SME financing. These three segments have not appeared before
in 2017. In addition, startups in the field of Crowdfunding, Credit scoring and Buy
now, Pay later are new areas appearing in 2021.
13
Prominent segments of the fintech market
in 2021:
2.2.1. Digital and Mobile Payment

Digital and mobile payment is the most concentrated fintech activity in Vietnam,
accounting for 31% of total fintech startups in Vietnam. There is no denying that
non-cash payments are booming in Vietnam and still has possibility for further
development in the future. The latest PwC report recognizes that non-cash payments
are becoming increasingly popular, and this sector plays an important role in
promoting the country's financial inclusion. By 2030, the Asia-Pacific region is
projected to lead in growth in the volume of cashless transactions per capita,,
including Vietnam. Vietnam has a lot of potential thanks to the Government's
commitments towards the goal that 80% of the population will have an
electronic payment account.
The latest data from the State Bank shows that in 2021, there are more than 200
million transactions made through e-wallets, with a value of about 77.7 trillion VND.
The convenience of e-wallets in payment is the reason for many banks to "jump" into
this service segment.
Figure: Vietnam warming to e-wallets. Source: J.P. Morgan

Payments Trends Report
14
Notable companies in this segment include VNPay (E-wallet of Vietnam Payment
Solution Joint Stock Company) and Momo (E-wallet of Mobile Services Joint Stock
Company)
One of Vietnam’s leading fintech startups is M-Service, the
company behind digital payment platform MoMo. MoMo works both
as an e-wallet and a payment app, allowing users to make peer-to-
peer transfers, pay their bills, purchase mobile phone top-ups,
among other features. On December 21, 2021, MoMo announced
the completion of the 5th funding round (Series E). The
company has received approximately $200 million in investments
from global investors including Mizuho, W ard Ferry, Goodwater
Capital and Kora Management. This funding round is led by Mizuho
- Global Bank of Japan. The company will use the new capital to
strengthen its position as a market-leading super app by increasing
the provision of financial services to 31 million existing customers,
expanding the market through providing financial solutions. digital
transformation solutions for millions of small businesses (SMEs),
micro enterprises (MSMEs) in Vietnam and continue to promote
investment in Vietnamese companies to expand the ecosystem. The
company will also expand and strengthen its services in tier 2 and
tier 3 cities as well as rural areas.
VNPAY, developed by Vietnam Payment Solution Joint Stock

Company (VNPAY), is a payment solution that allows customers to
use the QR Pay feature built into the mobile banking application of
power banks. Mobile phone and scan VnPay code to pay for
transactions. VNPAY operates mobile applications of 22 domestic
banks, including leading banks such as Agribank, Vietcombank,
VietinBank and BIDV. Banking apps enable more than 15 million
users, pay bills, recharge mobile phones, book bus tickets and
even shop for groceries. The company also operates VNPAY-QR,
an interoperable cashless payment network serving 22 million users
and over 150,000 merchants. VNLife, the company that owns
payment service VNPAY, has announced that it has raised more
than $250 million in a Series B funding round, led by US
investors including General Atlantic and Dragoneer Investment
Group. Additionally, there is also participation from PayPal
Ventures and EDBI, along with existing investors GIC and SoftBank
Vision Fund 1. VNLife intends to use the new sources of capital to
further take advantage of the vast market opportunities in the
context of increasing digitalization in Vietnam.
15
2.2.2. “Buy Now, Pay Later”
“Buy now, pay later” is a form of payment in which consumers buy goods and pay
gradually over a period of time in installments. Many companies also offer interest-
free plans, but will charge high fees and late fees.
In 2021, this market will develop actively both in terms of users and new services.
Prepaid payment in Vietnam is expected to increase by 71.5% per year and reach
$697.1 million in 2021. The option to buy first, pay later is becoming an increasingly
popular way of shopping with consumers in Vietnam. The growth of the industry is
mainly driven by the younger generation and especially Generation Z shoppers.
FE Credit and Home Credit - the two leading companies in the market share of “Buy
now, pay later” in Vietnam, both said that each party has about 12 million customers
per month, and startups actively participating in this field are expected to boom in the
foreseeable future. In 2021, we also witness a series of big and small names, from
Fintech to large financial institutions joined this field, as some following cases:
In March, pre-pay post-purchase startup Fundiin raised about $1.8M in Pre-

series A with investors coming from Genesia Ventures, JAFCO Asia, Trihill
Capital, along with former Affirm senior managers (Xffirmers); Mr. Pham Le
Nhat Quang; 1982 Ventures, Zone Startups Ventures and other angel investors,
to expand its service in Vietnam.
In August, MoMo announced a cooperation with TPBank to launch a postpaid
wallet, inviting users to swipe their wallet without worrying about how much
money their account has left, with a limit of up to 5 million VND.
Nikkei said that Mizuho Bank (Japan) will pour $170 million to buy shares of M-
Service, the owner of the MoMo payment service.
In mid-November, Napas cooperated with 13 banks and financial companies to
promote domestic credit cards. Domestic credit cards are used to pay directly
on a POS terminal, for online payment.
Currently, there are 6 banks (VietinBank, Sacombank, ACB, HDBank, Bao Viet
Bank, Ban Viet Bank) and a financial company (VietCredit) that have issued
domestic credit cards. That same month, Mastercard launched a prepaid
postpaid merchant card solution for small businesses in the Asia-Pacific region.
Lotte Finance Vietnam, a subsidiary of Korean credit card company Lotte Card,
has launched a pre-paid post-paid service for domestic customers, based on
Way4 digital payment software. by OpenWay. Accordingly, they grant a line of
credit to customers to pay for goods and services on Lotte Finance's partner e-
commerce platforms.
16
The “Buy now, pay later” market in Vietnam has had an exciting year thanks to
many factors.
The first is the friendly trend of buying first, paying later among young
customers. MoMo's side said that Generation Y and Generation Z, who own
the consumer market today, do not passively wait for their salary to come
back to account for expenses in the period. The need to shop, pay bills...
always urge them to have more creative financial solutions, and that is the
chance of the “Buy now, pay later” method.
On the other hand, the product related to the “Buy now, pay later” field not
only solves the financial needs of users but also contributes to promoting
retail sales and services, which is also one of the strong driving forces for
economic recovery. Understanding this need, 67% of digital sellers in
Vietnam say that they are likely to increase or maintain digital lending.
The second major driver of “Buy now, pay later” is the growth of e-commerce.
This year, this market size has grown to 53%, reaching 13 billion USD. The
strong increase in online shopping helps the field of “Buy now, pay later” to
develop accordingly.
Market momentum also comes from startups that buy first, pay later, which are
increasingly active. In addition to Fundiin, the market also has other names such as
Reepay, Atome, LitNow, Movi... The number of Fintechs in this segment is expected
to increase exponentially.
The market for “Buy now, pay later” is expected to grow strongly. The pandemic has
changed consumer behavior towards payment methods, thereby reshaping the
payment field in Vietnam. It is predicted that the “Buy now, pay later” market is
expected to grow steadily at a rate of 38.1% in the period 2021-2028. The total
value of goods purchased in “Buy now, pay later” in Vietnam will increase from 207
million USD in 2020 to 4.73 billion USD in 2028.
2.2.3. Wealth Management (WealthTech)
WealthTech is also a notable field in the Vietnamese fintech industry in 2021, which
combines technology and wealth management to provide investment and wealth
management solutions through digital tools. The shift in how people (especially
young people) manage money and what they choose to invest has made the
sector thrive.
17
According to KPMG, the Asia-Pacific region is emerging as the leading destination for
the asset management sector. Particularly in the Vietnamese market, a series of
advantages are creating opportunities for businesses as well as start-ups to
participate in the market. KPMG said that although the asset management market in
Vietnam is still in its infancy, it has gradually caught up with other markets such as
Thailand and Malaysia.
Figure: WealthTech lured most deals among fintech startups. Source: DealstreetAsia
Within fintech, WealthTech is one of the most popular sub-category with a total of 15
deals recorded in H1, 2021 with $267M in value in the South-East Asia market.
There have been a number of outstanding start-ups such as Finhay, Infina,

Tikop… One of those WealthTech startups, Finhay, was born in 2017, has raised
nearly 1 million USD from Insignia Ventures Partners and some other investors.
Finhay aims to help customers born in the period 1980-2000 (Millennials) access
financial funds in Vietnam to save and invest with an amount of only VND 50,000.
Besides Finhay, the Vietnamese WealthTech industry also has Infina and Tikop
(products of Techlab Company), which were born 3 years later. While Tikop allows
users to invest with small amounts, from only 50,000 VND like Finhay, Infina offers a
minimum of 500,000 VND (due to different product structure). Infina has just
announced the completion of a seed round with a value of 2 million USD from Saison
Capital, Venturra Discovery, 1982 Ventures, 500 Startups, Nextrans, and several
senior managers at Google and Netflix Asia.
18
2.2.4. Peer-to-peer lending (P2P lending)
Peer-to-peer lending is gaining more attention, especially in Vietnam. Peer-to-

peer lending, also known as P2P lending, is a money lending activity to businesses
or individuals throughout online websites/apps. The lender, called a P2P company,
offers lending services with an easier process than traditional lending practices,
connecting lenders and borrowers without intermediary financial institutions. This
new rise within the fintech industry in Vietnam is getting hot and is ripe for
investment.
One of the outstanding players in the P2P lending sector is Tima - a consumer
financial marketplace and P2P lending platform. With an initial investment of VND
150 billion, TIMA started to participate in the financial technology market in 2015 as
the first peer-to-peer (P2P) lending technology platform provider in Vietnam. In June
2016, TIMA started to deploy financial consulting and connection services, providing
simple, fast and reliable financial consulting services to customers nationwide. Up to
now, TIMA has successfully raised 3 million USD from the Belt Road Capital
Management foreign fund, raising the company's valuation to nearly 500 billion VND.
Potential as it is, P2P lending activities in Vietnam have just stopped at the basic
level, providing an intermediary platform to link borrowers and lenders. According to
the statements of the representative of the State Bank of Vietnam, Vietnam will soon
have the most specific regulations including conditions for domestic and foreign
investors to invest in this potential field, so these can be a positive sign for this field
to invest more in the future.
2.3. Notable Deals in 2021

In December 2021, MoMo successfully raised capital with an estimated capital of
about 200 million USD in series E, with valuation up to $2B. MoMo's heavyweight
competitor is VNLife (who owns a VNPay wallet). In mid-2021, VNLife announced that
it had raised more than 250 million USD in a Series B funding round. MoMo and
VNPay are likened to "fintech eagle wings" in 2021, when raising a total of 450
million USD.
In addition to the two popular capital-raising deals of MoMo and VNPay, 2021 will
also see a series of fintech investment deals, such as Do Ventures and JAFCO Asia
Venture Fund (Japan) made a $1.5 million Pre-Series A funding round investment in
the sustainable financial solution Mfast of DigiPay Company; Infina completed a
funding round of USD 2 million from 5 foreign investment funds and other notable
deals.
19
3. Opportunities & Challenges
3.1. Opportunities
Vietnamese banks are emphasizing digital transformation, with more and more
banks adopting a collaborative approach to foster rapid innovation. As a result,
B2B startups have many opportunities to support existing banks in digital
transformation.
Some collaborations on digital
transformation include: The cooperation
between Vietnam International Bank
(VIB) and Weezi Digital to launch a
mobile payment application; The
partnership between VietinBank and
Opportunity Network to provide bank
customers a digital business connectivity
platform; The cooperation between
VPBank and the startup Be Group to
develop a digital financial service called
beFinancial.
According to a report by Fintech News
Singapore, major players in the ride-
hailing sector such as Grab, Be Group
and Fastgo are expanding their foothold
in financial services by providing e-
wallet services. Most recently,
Indonesian startup Go Jek has shown
Figure: Ride-Hailing Market, Current
significant efforts into Vietnam's
participants. Source: Innotech Vietnam
financial sector through the acquisition
of Vietnamese startup Wepay to secure
an e-wallet license.
In the Fintech sector, “super apps” are quickly gaining ground, leveraging their
advanced technology platforms and expertise to provide cheap and convenient
digital financial services for the citizens.
It can be said that Vietnam's fintech sector has made significant progress and will
surely grow stronger in the future. Digital payment solutions will still maintain the
heat and continue to attract funding, especially from venture capital funds and lead
the segment. “Buy now, pay later”, P2P lending and other fintech areas such as
credit scoring, wealth management, and personal finance are in the developmental
stage, with high potential to grow.
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3.2. Challenges
Although Vietnam's fintech market is considered promising, it is still quite
young compared to other countries in the region. This is partly true in the
Vietnamese market, where about 40 e-wallet service providers are competing. To
promote users, e-wallets are "burning money" for discount activities, but this is not a
sustainable development direction. Besides, e-wallets in Vietnam also have difficulty
in reaching the group of users who are not customers of the bank because the wallet
needs to be linked to a bank account.
Commercial banks and network operators are also moving fast to compete in the
digital transformation race. In fact, only 3 wallets from technology companies are in
the top 10 most used payment apps in Vietnam in 2021, and the competition is
remaining high for payment apps in 2021 to survive in the Vietnamese market.
Currently, many "eyes" are on the next fertile service segment: “Buy now, pay later”
and WealthTech. However, current regulations in Vietnam do not allow non-banking
organizations to directly lend. Therefore, fintech companies will have to find partners
to be able to deploy this service.
4. Conclusion
In Vietnam, the fintech industry is at a booming period, especially in 2021 with
several notable deals related to the payment sector and personal, SME financing
sector. With a large percentage of potential tech savvy users, a positive start-up
investment and start-up community, an increasingly supportive legal framework, and
a strong enabling environment, fintech applications will penetrate the financial
ecosystem, fintech in the following years will certainly achieve great achievements,
playing an important role in revolutionizing the country's economy. In terms of rising
sectors, besides the digital payment sector which still gains the best investment
capital, the fintech market also witnesses the rising of “buy now, pay later” and
wealthtech sectors, which are expected to attract more investments for long-term
development. There is no denying that in the upcoming years, Fintech startups in
Vietnam will continue to boom not only Vietnamese but also foreign investors. With
two notable deals - Momo and VnLife in 2021, it is certain to say that other fintech
startups in Vietnamese ecosystems are expected to have better exit strategies for
investors and gain a brighter future to become the next unicorns.
21
PropTech
1.Market overview
Vietnam is increasing its share of the PropTech market
Not standing out the global trend of technology application in real estate, Vietnam is
witnessing smart technologies spreading to many aspects of the real estate market.
From the property sales, leasing or marketing activities to real estate management,
Proptech is changing the prospect of the local property landscape as well as
improving users’ experience in a smart and effective way.
Proptech startups in Vietnam have been changing the tides in the real estate market
by adopting new business models to suit the needs of the new generation of
customers. The country currently has a homeownership rate of 90%, but the
younger generation has trouble joining this statistic. As such, they are taking
advantage of the recent Vietnam proptech trends to become homeowners.
Vietnamese real estate, a market with a lot of room for development, will come
back stronger after the pandemic. According to the Vietnam Real Estate
Association, the proportion of Vietnam's real estate industry in 2020 reach 20.89
billion USD, accounting for 7.7% of the country's GDP. Meanwhile, in developed
countries, this proportion usually accounts for 20-25% of total GDP.
Though Proptech startups in Vietnam are still young but potential, venture investors
have the interest to seize the country’s market. The industry is estimated to have
nearly 160 proptech startups, 80% of which are foreign companies or funded by
foreign investors. Up to 40% of PropTech players active in Vietnam serving two
sectors in the market segments: co-working and co-living.
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2.1. A map of Vietnam’s Proptech ecosystem
Figure: Proptech Vietnam Map - March 2021. Source: Proptech Vietnam Network
Among the Proptech types, the most prominent can be found in the Co-working
and Co-living sector. This is an area that both buyers, sellers and investors are very
interested in. Not to mention, this type accounts for nearly 40% of the current
Proptech market, and is expected to receive more attention in the future.
Proptech is most commonly applied to housing, most notably websites introducing
and listing residential real estate, consulting transactions, buying and selling, leasing
and project management.
Proptech is also widely applied in the field of property management, when the market
grows rapidly and strongly, smart technology plays a very important role in helping
landlords and tenants optimize the necessary time to control their assets.
Of all sectors,
Proptech in Vietnam
also witnessed the rise
of startups in Property
Management & IoT
with nearly 7.7%, and
the new appearance of
VR & AR appliances in
the real estate
industry.
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2.2.Notable Deals in 2021
Rever: Most recently, in August 2021, start-up Rever said it had
successfully raised 10.2 million USD of Mekong Enterprise Fund IV.
Rever also received a $2.3 million investment from the GEC-KIP
Technology and Innovation Fund. VinaCapital Ventures also announced
an investment of 4 million USD in this unit. Established in 2016, Rever
is one of the technology companies in the field of real estate brokerage
in Vietnam. Rever operates under the Online-to-Offline model, applies a
technology platform, and works with a team of brokers to serve all
customers with real estate needs. Up to now, Rever has become one of
the leading brokerage units in the number of authentic apartments with
more than 50,000 listed products.
Go2Joy: The latest additional $1.3 million investment of Go2Joy, the
Vietnam-based hotel-hourly booking app, to its Series A round has
stirred the proptech market amid Covid-19 uncertainties. HB Investment
together with Platform Partners Asset Management have become new
investors in Go2Joy. After nearly 4 years of presence in the market,
Go2Joy has attracted more than 500,000 users, achieved a certain
position in the OTA (Online Travel Agent) industry and quickly
dominated the hourly booking market via the application.
Citics: Citics has successfully raised $1 million in a pre-series A
round from a group of international and domestic investors in March.
The investors include Vulpes Investment Management, a seed investor
in Singapore-based unicorn PropertyGuru, Nextrans and South Korea’s
TheVentures. By digitizing multiple sources of fragmented data, Citics
aims to build the first comprehensive real estate data platform in
Vietnam to help real estate-related transactions (valuation, purchase,
selling, renting, lending, investing…) be more quick and efficient.
Homebase: has just raised $30 million from leading venture capital
funds such as Y Combinator, Partech Partners, Goodwater Capital, Ace
and Company, Emles Advisors and many other well-known investors.
Previously, Homebase also successfully raised capital from VinaCapital
Ventures, Brian Ma (Co-founder and former CEO of Divvy Homes); Troy
Steckenrider III (Former CEO of ZeroDown) and Darius Cheung
(Founder & CEO of www.99.co - the largest real estate portal in
Singapore and Indonesia). With the new funding round, Homebase said
it plans to develop more proprietary technology, dominate and expand
markets, and establish more partnerships with investors and brokers in
new markets.
24
3.1. Opportunities
Proptech companies in Vietnam have begun to cooperate with Fintechs, and the
housing segment is expected to become the first bridge between Proptech and
Fintech. It can be seen that real estate management companies are looking for ways
to connect and integrate e-wallets into their management applications to improve
service and user experience. Real estate transaction websites have also announced
handshakes with e-wallet providers, to facilitate businesses in closing and collecting
fees. However, these integration deals will take a long time because Vietnam is still a
country that deals mainly with cash and credit cards have not been widely spread
across the country.
Thanks to technology, now most property management tools are programmed with
application programming interfaces (APIs); Or the use of 5G helps to connect smart
technology applications, camera sensors in the home conveniently, quickly and
clearly...
It can be said that, along with the industrial revolution 4.0, Proptech is in the
third stage of development with modern technologies such as big data (Big Data),
artificial intelligence (AI), reality technology. virtual (VR) and blockchain. Although
the proptech market in Vietnam is still in its infancy, it is considered to have great
potential and is a fertile field for investors.
Despite the inherent barriers of prejudice and trust in the real estate industry, the
Vietnamese market still expects a bright Proptech picture ahead thanks to a young
and tech-savvy population, in addition to the influx of money. Investment capital is
always ready to pour into startups in Vietnam. However, the Government needs to
increase support to promote the startup culture, making it easier for new companies
to enter the technology market. The cost will then decrease as more new investors
enter the domestic market. For Proptech to really develop, Vietnam also needs to
upgrade the quality of its network connection.
While there are not many investors implementing smart real estate projects, therefore
this is a good time for investors or new entrants to the market to position the brand
with those PropTech investments in Vietnam.
The first wave of Proptech in Vietnam began with the increase in demand for homes
from the middle-class population, thanks to the positive macroeconomy. This area of
Proptech is still the most popular, with a high concentration of selling, buying,
and leasing search portal startups.
25
Starting more than ten years ago, Batdongsan in the same category as
MuaBanNhaDat, Chợ Tốt, Homedy, transformed the consumer research experience
and home buyers increasingly began their search online. Through this online system,
people can find properties for sale or rent by area and price in a transparent manner.
But the transaction itself spanning brokerage, financing and closing remains largely
analog, complicated and inefficient. That brings an opportunity for startups to provide
innovative solutions to help simplify and digitize the transaction process. Examples in
this area are Rever and Propzy.
Cross-sector collaboration and collaboration enable joint efforts to address
serious societal problems in PropTech. Technology provides resources for smart
collaboration and communication, where sharing knowledge is the key driver to
success. Specifically, in the Proptech market, the interaction is a must-have
condition to leverage its growth.The cooperation with fintech, which turns out to be a
subsector called Real Estate Fintech (RE Fintech), is a strategic move. and this move
would be supported further with the new rise of both industries, so that startups in
Vietnam can better serve their customers. There are many ways in which
traditional real estate companies can benefit from the solutions offered by RE
fintech firms. They can provide platforms that can expand and diversify the lender
base and enable more individuals and institutions to get exposure to real estate. In
regard to B2B models, startups can offer their RE Fintech innovative funding and
investing platforms that let companies access capital. Alternately, companies could
also partner with RE Fintech to help meet their financing and investment needs.
Furthermore, real estate companies can invest in RE Fintech and benefit through
their growth.
3.2. Challenges
Challenging in creating a sustainable growth strategy
Another challenge is creating a sustainable growth strategy to ensure success. Real

estate is a complex market, shaped by many different factors. The market can
completely fluctuate due to objective factors such as the pandemic, so a sustainable
growth strategy will have a great impact on PropTech companies. Moreover, while the
opportunities in the PropTech sector are numerous, finding the right product for the
new market is crucial for long-term sustainability. Most products are accessibility
oriented and they also need to get the approval of at least part of the customers in
the market.
26
The challenge in penetration for big projects
Regarding ‘smart cities’, companies often look to work with the central/local
government in their smart city and urbanization master plan. In reality, it is difficult
for new companies to enter this market. Master plans for key smart city projects
across Vietnam are underfunded and at times lack the overarching coordination and
frameworks needed to put ideas into practice. Working directly with systems
integrators assisting provincial or city authorities in designing and implementing
smart city frameworks is the most likely pathway to entry.
4. Conclusion
When it comes to the global flow of money investment, it’s clear that more and more
leading VCs are turning to real estate tech or Proptech for ripe opportunities for juicy
returns and disruption on a global scale. The countless sub sectors in Proptech
where exciting new startups are popping up refers to optimistic chances for all the
partners to join the game. Since the beginning of 2021, although Covid has not
cooled down, the market has recorded investment, capital contribution and M&A
deals in the field of Proptech. Especially with notable deals from Homebase or Citics
in 2021, it is noteworthy to say that Proptech startups in Vietnam still have room for
further development, attracting more funds from investors and providing innovative
solutions to revolutionize the real estate industry, not only in Vietnam but also in
other potential markets overseas. The Proptech industry in Vietnam, though young
and primitive, is a ripe opportunity for investors to look forward to in the near future.
27
E-Commerce
1.Market overview
1.1. Vietnam E-commerce market
To achieve this growth, in addition to the Covid pandemic, the other key factors
are the fast-growing internet economy, increasing shopper buy dominantly
online and the favorable policy from government.
Taking a closer look,

Vietnam’s ecommerce market
has grew by 46% yoy,
currently valued at $13B and
is expected to reach $39
billion by 2025, according to
a report jointly published by
Google, Temasek and Bain &
Co.
Compared to other Southeast

Source: Google, Temasek and Bain & Company
Asia countries, Vietnam is in
the top 3 countries which
have the highest retail
growth, after Indonesia. In
terms of sales, Vietnam e-
commerce is expected to
grow 80% year-on-year and
grow 5 times in 5 years. It is
the highest growth
expectation on Online retail
GMV among Southeast Asia
countries, which is 4.5x from
2021 to 2026, while the total
Source: Google, Temasek and Bain & Company SEA GMV is forecasted to
double in the next 5 years.
28
The number of e-commerce
users is expected to grow
37% to 71 million users in
Vietnam by 2025. According
to eCommerce DB’s forecast,
Vietnam is also the country
that will experience the
highest user growth, which is
37% in the 5-year period
from 2021 to 2025, compared
to China (24%), the US
(11%), and the UK (6%).
Source: eCommerceDB
Covid is an unexpected catalyst for growth of e-commerce recently
Although it has achieved a miraculous growth rate in recent years, e-commerce in

Vietnam is forecasted to continue to grow as the outbreak of the pandemic creates a
new consumption trend in the industry, especially for young consumers.
According to Nielsen, since the pandemic broke out in 2020, the demand for shopping
through domestic e-commerce platforms has increased sharply. Up to now, more than
70% of Vietnam's population has access to the internet, of which 53% of people use
e-wallets and pay for online purchases. In particular, the two major cities of Hanoi
and Ho Chi Minh accounted for 70% of the total transaction volume on e-commerce
platforms.
Figure: Usage of retail outlets during Covid-19 in Vietnam, 2021, by store type
Source: Statista
29
More and more merchants are eager to join the e-commerce rocketship
Covid-19 has also helped speed up digitization. Businesses instead of using

traditional business methods have begun to promote online business. In Vietnam,
Traditional retail channels, mom and pop shops and MSMEs are still the backbone of
the retail sector, which accounts for a significant share of nearly 80% of total retail
volume.
In addition, for a long time, MSMEs have been untapped sectors for e-commerce
startups. Due to some positive signs of B2B commerce in 2021, it is reliable to
believe B2B commerce players could find more ways to solve existing problems in the
process of ordering, delivering goods between purchasers and suppliers.
3x
Figure: Search volumes for merchant- and seller -related queries, indexed to 2017 levels
Covid has been like a wave affecting the transformation of their business model and
way, in fact, it has proven that the online business model has brought more
advantages during the epidemic season. Up to 24.1% of retailers on e-commerce
platforms, Facebook, Instagram, and websites recorded growth during and even after
the epidemic.
1.2. Key growth drivers

To achieve this growth, in addition to the Covid pandemic, the other key factors are
the fast-growing internet economy, increasing shopper buy dominantly online and the
favorable policy from government.
Vietnam is a fast-growing internet economy
Covid-19 has also helped speed up digitization. Businesses instead of using

traditional business methods have begun to promote online business. In Vietnam,
Traditional retail channels, mom and pop shops and MSMEs are still the backbone of
the retail sector, which accounts for a significant share of nearly 80% of total retail
volume.
30
A new digital habit has adopted: Increasing shoppers buy predominantly online
The Vietnamese online shoppers is projected to increase from 45.6 million people in
2020 to 70.9 million people in 2025 with a CAGR of 12%. In 2021, there is an
undeniable shift of online purchase behavior, the percentage of online purchase
shoppers has increased 1.2 times compared to 2020.
31
Source: Research and Markets, 2021
In addition, the Vietnamese government has unveiled a national e-commerce

development plan for Vietnam, which will see the sector growing by 25 per cent
each year to reach $35 billion in sales within the next five years. The plan will focus
on accelerating the local e-commerce market to create a sustainable and competitive
business environment while encouraging sectoral growth in less-developed parts of
the country. It also outlines to develop the export market for Vietnamese goods, with
goals including to eventually allow cross-border e-commerce transactions from
outside Vietnam.
1.3. Notable trends in E-commerce

E-Commerce continues to attract the lion’s share of investment dollars in
Vietnam. The sector is well-poised to continue generating investment
opportunities, given innovative new business models and infrastructure
enablers.
2021 experienced stable funding from both domestic and foreign investors into
the E-commerce sector
In the B2C sector, the funding speed has slowed down as 2 of 4 dominant players
(Shopee and Lazada) are already backed by regional giants, these companies are
growing closer to the mature stage and no new competitor entering directly into the
sector. The B2C e-commerce deal of spotlight in 2021 belongs to Tiki, a local e-
commerce platform in series E with $285M total funding.
There has been a rise in investment into Vietnam B2B startups, which indicates a
ripe time for B2B services, including in the e-commerce area.
Some notable deals in 2021 are listed as below:
32
Company Funding type Value Investors
AIA, UBS AG,

Tiki Corporation Series E $285M
Mirae Asset,...
VNG, GGV Capital,
Telio Pre Series B $22.5M
Tiger Global
Cocoon Capital,
EI Industrial Seed Round $670k
Beenext
Altos Ventures,
January Capital,
Kilo Pre Series A $5M
Goodwater
Capital, ,..
As the next step of developing, E-commerce players are going deeper into
financial services to offer more solutions to customers.
The time for burning money to acquire users has passed for e-commerce platforms.
Players now have to find sustainable ways to lower the cost of acquiring new users
and retain the existing users by providing more solutions, create more value to
customers, especially financial services.
From investors’ side, Vietnam's E-commerce sector is going through an

interesting churn as it is ready to usher in a new wave of e-commerce enablers.
As the market matures, there will be an increasing number of companies which
provide niche products for e-commerce.
It’s observable that the time for a VC-backed co-founding team in Vietnam to build a
B2C competitor to Tiki or Lazada probably has passed. Currently, it is evidenced that
a lot of e-commerce enablers are emerging, for example: ventures that focus on a
specific problem within the e-commerce industry.
In Southeast Asia, there is also a spate of e-commerce enablers mushrooming, such

as the use of innovative insurance solutions to enable instant returns for customers
(Return Genie) or providing multi-channel fulfillment and on-demand warehouse
services (Locad).
33
2.1. A map of Vietnam’s E-commerce
ecosystem
Figure: Vietnam's key e-commerce players
2.1.1. B2C e-commerce landscape
Over the recent years, since no new players enter this fiercely competitive B2C
market, the majority of market share is taken up by the established players.
According to iPrice
Group, the top 3 most
popular e-commerce
sites are Shopee,
Lazada, and Tiki that
took 57%, 16%, and 13%
of the market
respectively. The
remaining 14% of the
rankings were evenly
accounted for by the
other platforms.
Figure: Vietnam's e-commerce share up to Q3/2021
Source: Iprice
Shopee is the most popular player in terms of monthly visits, number of users and
number of downloads. Lazada is the second most popular digital market in Vietnam in
Q3, 2021, followed by Tiki. In terms of monthly visits, two websites Thegioididong
and Dienmayxanh ranked second and third, after Shopee.
34
Figure: Vietnam's top 10 e-commerce website in Q3/2021
Source: IPrice Insight
Tiki: Founded in 2010 as a platform for selling books, Tiki has since grown into an
e-commerce platform operating an online marketplace fulfillment centers and
logistics network. Last year, Tiki added new services to its offering including
TikiPro that helps with the installation of home equipment and raw food delivery
service TikiNgon. Tiki also operates a unit called TikiTrading to distribute certain
product categories.
Shopee: Shopee is one of the biggest e-commerce platforms and still dominates
in terms of visits throughout the year. There are 3 main development trends in
2021 including increasing adoption of digital payments, promoting logistics, and
changing the way sellers sell their products.
Lazada: Lazada has enjoyed strong growth over the past year and a half, driven
by the pandemic.Lazada has put a lot of effort into developing the logistics
system, incentive programs, shopping combined with entertainment to resonate
and attract users.
Sendo: Founded in 2012, Sendo is one of 4 big players in Vietnam’s e-commerce
market. Sendo has implemented companion programs to promote and develop
with Vietnamese brands in big events and organizes a program of free shipping
for Vietnamese goods and 100% refund for goods with purchase vouchers to
increase the number of orders for Vietnamese businesses.
2.1.2. B2B e-commerce landscape

In 2021, Vietnam as well as Asia is witnessing the B2B e-commerce sector
starting to enter the boom time and attracting more investors investing into
startups. Recently, B2B e-commerce startups are focusing on connecting business
with suppliers and trying to solve the manual and inefficient processes resulting in
wasted time and higher costs for both purchasers and suppliers when procuring
goods.
35
“As consumers are opening their wallets more to e-commerce, the move from
B2B is just an inevitability. Companies will need to be looking for efficiencies
everywhere in their business,” said Ryan - managing director Consumer
Intelligence Asia at Nielsen.
Some notable startups recently successfully fundraising are such as Telio, EI

Industrial, and Kilo. This marks an important milestone in the investment and
development process for B2B e-commerce platforms.
Telio: an e-commerce platform connecting retailers with brands and wholesalers

recently raised a total $51M from investors led by VNG (22,5 M USD); GGV
Capital ; Tiger Global,..
Vinshop: Launched by VinGroup through One Mount Group, Vinshop is an
application for grocery store owners and partners, which help them import goods
at wholesale prices directly from their suppliers.
EI Industrial: the first industrial-focused B2B marketplace in Vietnam that aims to
accelerate digital procurement in the country. The platform currently serves over
500 customers in Vietnam, including global companies such as the Esquel Group,
Heineken, Toshiba, Olam, Aqua, Oishi, Wahl, and Central Group.
Kilo: Founded in 2020, Kilo is a platform that connects wholesalers with micro,
small and medium enterprises, and wants to digitize the local retail value chain
via technology. Kilo’s platform and tools enable the local MSMEs to manage
business across multiple sales channels, such as Kilo’s app, Facebook and Zalo,
and optimize inventory turnover to save cost and reduce risk over the long-term.

3.1. Opportunities
The continuously evolving pandemic situation has strongly pushed businesses and
users to switch to online platforms, a trend that will continue in the new normal.
Accordingly, main opportunities for Vietnam's e-commerce market in 2021 include:
Increasing the leverage of social media platforms and KOL, increasing the application
of digital payments; Logistics will take the lead, innovation in retail strategies of
brands and sellers.
36
Increasing the leverage social media platforms and KOL
Facebook’s recent report noted that more than half (51%) of consumers surveyed
around the world choose to buy products that have been used by celebrities,
bloggers, vloggers, and influencers on social networks. association (KOL)
recommending or sharing experiences. The creativity, popularity, and influence of
KOLs have helped attract more users, while helping to increase the prestige of e-
commerce platforms and brands.
In Vietnam, this form started three years ago with the pioneering of Lazada. Up to
now, many major e-commerce platforms have favored this new form of promotion,
bringing bilateral benefits to both businesses and partner brands and sellers.
Digital payment become popular

Market surveys show that digital payment is the preferred transaction method on e-
commerce platforms. This will promote the trend of cashless payment when shopping
in stores.
As recorded by Shopee, the total number of orders paid through the Airpay e-wallet
across the region has grown fourfold. In which, the group with the strongest growth in
most markets is the group of users over 50 years old. This demonstrates the
accessibility of the Airpay wallet for an age often seen as hard to adapt to digital
payments.
In addition to the increase in the use of the AirPay app. The number of stores that
are partners in Vietnam using AirPay wallet payment has also doubled in 2020.
Including partners such as 7-Eleven, MyKingdom and Guardian.
Logistics will take the lead
In 2021, consumers expect more efficient deliveries. Therefore, businesses and

sellers need to use technology effectively to ensure goods are delivered quickly and
economically. To do this, it is necessary to monitor the entire process from approval
to delivery, including continuously strengthening the logistics network and warehouse
capacity.
Shipping is key to many online shopping platforms. It has been incorporated into
Tiki's growth strategy in 2021. Richard Trieu Pham, CFO of Tiki, said that the
platform invests tens of millions of dollars in technology and logistics every year, and
this number is expected to increase in the future. For Shopee, Shopee Express
expanded its reach to reach more users including users in rural areas in 2020.
Shopee saw many businesses effectively exploiting the logistics infrastructure with
the number of items shipped from the warehouse increasing by 3 times.
37
Innovation in retail strategies of brands and merchants, changing the way
sellers sell their products
The pandemic has encouraged businesses from luxury brands to small businesses to
step up their businesses online. This has led to a third trend, where businesses and
sellers must adopt an innovative digital strategy to reach users in the context of
social distance. Businesses are also applying technology to improve the lives of
users in the region. The method of direct connection between businesses and
consumers through technology is a new and potential development trend.
To better support business to sell on e-commerce platforms, big e-commerce players
have integrated entertainment games, live streaming and social networks. Due to the
period of social distancing, consumers use online platforms both to satisfy their daily
necessities and for entertainment purposes. Therefore, e-commerce platforms must
integrate interactive elements such as games and livestreams to increase connection
with users.
3.2. Challenges
The B2C e-commerce sector is becoming much more mature, which creates a
huge barrier for new companies to enter the market
With the large market share of Shopee, Tiki and Lazada, it is more difficult for
startups to enter the B2C market when consumers are used to shopping on these
channels. Moreover, these companies have to start thinking about profit-generating
instead of growth in traffic or merely number of users, or they risk meeting the same
fate of Lotte.vn and Adayroi.
E-commerce businesses are facing difficulties of disrupting supply chain and

infrastructure during Covid 19
Strict lockdown measures to suppress Vietnam’s worst outbreak of COVID infections

since the pandemic began are severely curtailing factory production, especially for
electronics, footwear, apparel and textiles, and ocean terminals lack sufficient
equipment to export goods.
38
4. Conclusion
Affected by Covid 19, Vietnam's e-commerce landscape has changed a lot in a more
positive way. To investors, the common exit scenarios could be an IPO, or M&A
with the same industry player in Vietnam or regional market. The more mature
the startups are, the clearer exit paths for investors.
In the big picture, opportunities still exist for startups and investors in the
e-commerce market in the coming years, but in a more selective way. There will
be a new wave of e-commerce enablers, which focus on a very specific problem
within the e-commerce industry and provide niche products for e-commerce.
Vietnam’s B2C commerce is still an array dominated by the 4 biggest players:

Shopee, Lazada, Tiki, Sendo. These companies have to expand their services
as well as adopt new technology to support selling and purchasing journeys
over time to adapt with the changing customer behavior. The exit path for these
companies (one of which is by IPO) is getting closer, opening a clearer
perspective for investors, typically Tiki's IPO plan. B2C e-commerce still has
niches that startups can take advantage of if they want to enter this segment.
B2B e-commerce is recently on the rise in both Vietnam and SEA market,
with positive information about the favorable development and suitable
conditions of the MSMEs economy in Vietnam as well as the capital
flowing into B2B startups in the past year. 2021 marks the suitable timing
for B2B startups. The market is gradually heating up and there are still many
opportunities for investors. In years ahead, Vietnam and SEA countries will
continue witnessing booming years for B2B startups investment.
2021 also sees other models of e-commerce emerging: dropshipping or social
commerce, with a tilt towards essentials coupled with a shift in customer
behavior. This is an opportunity for e-commerce to increase the number of
online shoppers and change themselves to capture more market share of the
larger market.
39
On - Demand Grocery
1.Market overview
On-demand grocery is a sub area of the modern grocery market, especially
online grocery market. This area in Vietnam has the promising potential along
with the big growth rate of modern channel grocery.
Grocery retail has grown by 5% yearly between 2014 and 2019, with traditional
channels (markets and independent stores) still playing the leading role and
dominating more than 90% of total market. Modern channel’s account for roughly 8%
of the overall grocery retailing, but its big growth rate of 8.5% per annum shows that
it is increasing faster than the market average.
Among the categories of
retailing, grocery is one of the
largest categories in Vietnam,
accounting for more than half of
the total retail sales in the
country (by value). Vietnam’s
retail market has the highest
growth rate in modern grocery
retail in comparison to other
Southeast Asian countries.
Therefore, Vietnam expects the
greatest potential for modern
grocery retail expansion in the
future.
40
Modern trade of grocery through supermarkets, hypermarkets and convenient stores
has become more and more popular in Vietnam with a high growth rate, challenging
the prevalence of traditional retail. In the future, the growth of omni-channel retailing,
e-commerce shopping and market consolidation are pinpointed as key trends within
the Vietnamese grocery market.
In 2020 and 2021, there was a boost of online (or on demand) grocery in terms
of online sales due to the COVID-19 pandemic.
People pay more attention to fresh food, beverages, pre-packaged items, fruits and
veggies as the searches for these items surge by 99 percent, 51 percent, 30 percent,
and 11 percent, respectively, compared to the previous quarter. Thus, social
distancing could be one of the factors driving the surge in demand for online
supermarkets. With the growing necessity of purchasing essentials online, retailers
are more likely to adapt to the digital platform.
Leading e-commerce providers in Vietnam, including Tiki, Shopee, Lazada, Sendo,
etc. expanded their product range to groceries and fresh food. Vietnam’s e-commerce
sector has already been experiencing significant annual growth of 30% over the past
two years, and now it is becoming even more clear that the rise of online shopping is
one of the major trends in the future.
Vietnam will follow the trend of increasing online grocery penetration in the
upcoming years
In Southeast Asia market, groceries' online penetration triples again, nearly half of
the sales from consumer electronics now come from online. The SEA’s growth of
online grocery penetration has increased 2.8x from 2019 to 2021, which is undeniable
evidence for a robust growth of online grocery in Vietnam for the upcoming years.
41
Figure: Grocery's penetration in SEA markets
“What we see in China and the US is more of a channel shift from offline to online,
whereas in Southeast Asia the growth in consumer spending and retail is driven by
online channels. In the future, we will be talking about digitized commerce instead of
gross merchandise value and penetration, so businesses will need to focus on driving
the most value out of the omnichannel purchase journey.” Magnus Ekbom Chief
Strategy Officer, Lazada Group
Follow the same pattern, Vietnam market, COVID-19 also accelerates take-off of
online grocery shopping
The COVID-19 outbreak has introduced e-commerce to a large number of Vietnamese

consumers who had earlier not been interested in online grocery shopping and e-
payments. By shopping online, they experience the benefits of not needing to wear a
face mask, or having to keep to distancing guidelines when physically shopping or
standing in queues. This has resulted in a surge in online demand for grocery
products, which are normally not key products for the e-commerce sector.
On Shopee’s platform, the time that Vietnamese consumers spend shopping

increased by more than 25% after the COVID-19 outbreak, as they look to purchase
groceries and other daily essentials. Most popular purchases on the platform include
items such as makeup remover, smartphones, milk, diapers, as well as pots and
pans34.
Indeed, the new online shopping habits that many Vietnamese consumers have
picked up during the COVID-19 period may become permanent changes that e-
commerce players will need to adapt to.
42
The growth of agricultural products on Sendo

+13% +45%
# of orders
+29% +50%
# of items
+30% +46%
# of stores
2020 vs 2019 2021 vs 2020

Source: Iprice
People pay more attention to fresh food, beverages, pre-packaged items, fruits
and veggies as the searches for these items surge by 99 percent, 51 percent, 30
percent, and 11 percent, respectively, compared to the previous quarter. Thus, social
distancing could be one of the factors driving the surge in demand for online
supermarkets. With the growing necessity of purchasing essentials online, retailers
are more likely to adapt to the digital platform.
Currently, on-demand grocery market in Vietnam is highly fragmented with some
pure players and also some supermarkets expanding online and offering
grocery delivery services. Almost all the companies that provide this service are in
Ho Chi MInh City.
One of the first and independent players in this field is Chopp.vn which was
established in 2016, Chopp's revenue in the very first year was 275M VND. Most of
the current players in the on-demand grocery market are invested and expanded by
e-commerce and logistics platform companies.
In a bid to survive the ongoing onslaught of the Covid 19 pandemic, e-commerce
startups in Vietnam are also increasingly gearing up to sell essential items -
especially food- to woo consumers who are reluctant to venture out.
In response to the increasing demand for online grocery retail, several non-traditional
retail players have also seized the opportunity to make their foray into the market.
For instance, ride-hailing player Grab launched its grocery e-commerce platform,
GrabMart, in Vietnam on 23 March 2020. In its second week, the company revealed
that orders had surged by 91% over the previous week, with milk instant noodles, soy
milk, soda and pork sausages among the top five most searched items35.
43
Below are some key successful on-demand platforms in Vietnam:
Pure player
Chopp: an online grocery service in HCMC and Hanoi. It currently partners

with about 40 supermarkets and commits to deliver within 1 hour when
customers request to buy things at a store.
Supermarket offer online delivery services: Coopmart, NowFresh, Bach Hoa

Xanh..
Logistics, ride hailing
Lo Ship: LoMart provides in HCMC and Hanoi

Bee, Grab, Gojek: It can be seen that while Grab Mart and Be Delivery both
have their locations in HCMC and Hanoi, Gojek also continued with GoFood
which offers ordering and essential goods delivery service GoSend. The
epidemic led to a sudden increase in the demand for household shopping, but
the logistics, delivery and infrastructure’s development could not meet the
demand. Currently, these platforms only provide services for HCMC and
Hanoi.
E-commerce
Shopee: the foreign e-commerce marketplaces also started the delivery of

fresh food items and fruits through its platform ShopeeFarm in Hanoi and Ho
Chi Minh City.
Tiki: the company is ramping up its focus on its fresh food delivery service
TikiNGON as it seeks to increase revenue. As a result, TikiNGON has
skyrocketed 2000% year-on-year in Q3, 2021.
Sendo also started selling vegetables to help customers have all necessary
items from the comfort of their homes.
Other e-commerce platforms such as Vo So (owned by Viettel Post), also
support and implement their online selling grocery.
In additional, some new model evolving from e-commerce, which is social

commerce, also start selling grocery on demand with Mio is the notable player:
Mio: Founded in June 2020, Mio is an online platform that allows middle
aged women sell groceries to their social community in smaller cities or rural
areas.
44
3.1. Opportunities
Buyer’s behavior is changing, even if the epidemic is over it suits busy people.
On-demand grocery is convenient and quick for buyers without going to market
directly. After covid-19 pandemic, the consumers got used to the convenience of it. It
is expected that this market will attract more investors and have a growth path in the
future.
Low competition, attract more startups in the future.
Recently, almost all platforms belong to e-commerce sites or logistic applications.
The top player is only Chopp. With the forecast that the economy is growing
strongly, Investing in this market will have desirable results.
3.2. Challenges
Difficulties in distribution channels and broken/disrupted supply chain affected
by the pandemic
Over the past few months, startups have adopted diverse measures to minimize the
effect of Covid on their supply chain. For example, some startups have moved from a
bigger warehouse in Ho Chi Minh to a smaller one in other cities where there are no
restrictions on movement, while others have moved from a self-operating model to a
fulfillment one.
Several infrastructural challenges will need to be overcome
Many small and medium enterprises, for example, continue to be cautious about
expanding their e-commerce distribution channels due to a lack of know-how, as well
as the fears of incurring losses or not being able to cope.
Need new feature to attract customers
Because of the familiar app, the new platform needs to invest in more apps and
delivery methods which satisfy the customers. Furthermore, more and more discount
vouchers are an attractive feature to customers.
Bargaining power of supplier
Platforms need to cooperate with large supermarkets, farms, grocery stores to ensure
the quality of products. Besides, the number of shippers cannot meet the delivery
demand during peak hours.
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4. Conclusion
Being accelerated by Covid 19, On-demand groceries are taking advantage of online
shifting purchase behavior of customers, and have a lot of upside in the future. Even
though starting with the beneficial momentum, there are still many challenges ahead,
which could be finding sustainable business models, dealing with logistics and
infrastructure problems,... Therefore, investors are still keeping an eye on this
sector.
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EdTech
1.Market overview
1.1. Vietnam EdTech market
The Covid-19 pandemic has accelerated the explosion of EdTech in the global
market, and Vietnam has emerged as a hotspot for investment in this segment.
The total global expenditure on Education Technology (EdTech) will reach $254
billion in 2021 and is estimated to grow strongly by 12.2% by 2025, reaching $404
billion (Holon IQ). Although the Covid-19 pandemic has had many negative effects on
all fields, it is undeniably a significant catalyst for the booming of EdTech, promoting
the global education revolution.
Southeast Asia, fortunately, possesses several favorable conditions to become the

most potential market for the educational technology segment. Firstly, the large
population size, about 675 million people, with an open mind and high new
technology readiness. Besides, Southeast Asian parents' willingness to spend on
their children's education is also an important factor to help turn this place into fertile
land for EdTech startups, in which Vietnam and Indonesia are the focus.
Figure: E-learning market size in Vietnam by revenue (Billion USD)

Source: Ken Research
47
Figure: Vietnam EdTech Funding history
Source: TechAsia, Crunchbase
Currently, Vietnam is in the top rising educational technology markets with high
growth speed in the world. According to Ken Research, Vietnam's E-learning market
reached $2.08 billion in 2021 and is estimated to be worth $3 billion by 2023 with a
CAGR of 20.2%. In 2021, EdTech Vietnam recorded the highest deal count, 11
deals with a total investment value of $108.4 million, in which seed round
represented 63.6% of total deals. Meanwhile, the SEA region witnessed 76 deals in
this segment and the total investment volume was $1.28 billion.

According to Justin Nguyen, Director of Monk's Hill Ventures Fund, Vietnam is a
promising market with a rapidly growing young middle class, a high priority for
education, and the proactiveness of the Government in attracting foreign investment.
Increasing demand for acquiring new knowledge
There are 24 million pupils and students in Vietnam, more than 90% of these use
mobile phones, computers, or laptops to study and quickly catch up with new
technology trends. Besides, the young labor force always actively reskill and upskill
themselves in order to meet the requirements of the job market.
High education spending
In recent years, Vietnam has been evaluated as a country with a high level of
expenditure on education and training in the world. According to Bain & Company,
the average Vietnamese family spends about 20% of their disposable income on
education for their children, compared with 6-15% in other Southeast Asian countries.
According to the General Statistics Office, annual spending on education has
increased 2.3 times in the past decade, reaching 7.1 million VND/student in 2020,
and is estimated to increase to 7.3 million VND/student in 2021.
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Figure: VIetnam annual Education Spending
Source: GSO
“Since 2008, the Vietnamese government has allocated 15-20% of public spending on
education, which is among the highest in the world and second only to Malaysia in
Southeast Asia. So, although Vietnam's EdTech market is still young, we realize that
the market is very active as founders are trying to capture untapped opportunities by
innovating, improving results and better learning outcomes,” added Mr.Justin.
Long-term orientation of the Government
In July 2021, the Vietnamese government set a target of bringing online training
to 90% of universities and 80% of high schools and vocational institutions by
2030. This will help Vietnam prepare higher-quality human resources for future
needs, especially training in digital skills.
Specifically, in the past 12 months, nearly 80% of Vietnamese students have applied
the online learning method due to social distancing policies. Vietnam was ranked
17th out of 200 countries that promptly applied information technology to
respond to the pandemic.
In conclusion, Vietnam's EdTech is a nascent sector market. However, according to
TechInAsia, this is the right time for EdTech startups to take off, taking advantage of
the opportunity to fill the strong demand of parents and students for innovative,
effective educational services compared to the traditional educational model. This is
also a solid stepping stone to help Vietnam prepare the necessary human resources
and maintain its attraction to foreign corporations in the next 10 years.
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2.1. A map of Vietnam’s EdTech
ecosystem
Vietnam's EdTech playground is quite dynamic with many players from diverse
segments. According to EdTech Vietnam Yearbook 2021, there are 179 EdTech
products/companies currently active in this segment. Formidable foreign rivals are
also present in Vietnam such as Snapask, Duolingo, Elsa, and Quizlet.
Figure: Vietnam's EdTech Landscape 2021

Source: TechAsia, EdTech Vietnam Yearbook 2021
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2.2. Existing market structure
Types of EdTech solutions
The most commonly used EdTech products in Vietnam include SMS (School
Management System), LMS (Learning Management System), and CLS (Courseware &
Learning System). All 3 EdTech products have extensive applicability at all levels of
education in Vietnam.
A brief summary of the development of EdTech Vietnam
Figure: 5 Stages of development of EdTech Vietnam

Source: EdTech Vietnam Yearbook 2021
As can be seen, the Vietnamese EdTech market has gone through the nascent stages
and has accumulated enough momentum, along with favorable conditions, to be
ready for explosive growth in the coming years.
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EQuest, a diversified education ecosystem, received an investment of $100
million from KKR in June, this is also the highest value deal in the EdTech
segment and is in the top 5 notable deals of Vietnam market. EQuest was formed
through a series of mergers between EQuest Academy (founded in 2003) and
other educational companies in the country from 2013 to present. EQuest is
currently focusing on four areas: The system of bilingual schools from grade 1 to
grade 12, the system of universities and vocational colleges, English training
centers and educational technology solutions. Mr. Chee-Wei Wong, Asia director
of the KKR Global Impact Foundation, said that EQuest aligns with their vision of
promoting “Lifelong learning” to close the skills gap and create equal access to
quality education.
CoderSchool, an EdTech startup focusing on technology learning, has
successfully raised $2.6 million in a pre-seed round led by Monk's Hill Ventures.
Other investors participating in the round include Iterative, XA Network, and iSeed
Ventures. Founded in 2015, CoderSchool offers courses in the fields of machine
learning, data science, and web development to equip students with skills that can
help them find jobs. The company automates most of the day-to-day teaching
activities such as tracking student progress, grading, attendance and
personalization of courses. CoderSchool plans to use the raised capital to develop
new training content and develop technology infrastructure for technical training
programs.
Clevai, a startup that just launched in August 2020, has received $2.1 million in a
Series A funding round from Altara Ventures, an investment fund based in
Singapore. This is an online teaching platform for high school students, applying
artificial intelligence. What makes Clevai special is the ability to personalize the
learner's experience based on learning history, thereby providing learning
resources and a tailored pathway, timely assessments to ensure progress.
Marathon - Vietnam's online tutoring startup recently announced successfully
raising $1.5 million in pre-seed funding from Forge Ventures, Venturra
Discovery, iSeed, and angel investors. is different. Targeted at an immediate
audience of students in grades 6-12, Marathon offers online lectures and "break-
out" sessions where students can split into groups and ask questions directly with
a tutor.
Educa Joint Stock Company also raised $2 million in Series A from Redefine
Capital Fund, an investment fund backed by Alibaba. Founded in 2018, Educa
brings online English learning solutions for Vietnamese students with lectures
from native teachers, learning through pictures and animations, speaking
exercises, and interactive games with applications of AI technology, Adaptative
Learning.
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Giants enter the race
The heat of the EdTech market attracts the participation of not only startups but
also large corporations, notably FPT, Viettel, and VNPT.
FPT, owning wide coverage and a range of products, is an outstanding player.
VioEdu is an intelligent online learning system, applying AI technology for data

analysis and compatible learning methods, developed by FPT Corporation's
Technology Department and ViOlympic Center. This product was developed to
help teachers to reduce the learning time of students but still increase the
effectiveness of teaching and learning.
FPT.eLearning also provides ministries, departments, businesses, schools, and

educational institutions a complete online training tool with effective learning
space and learning management. The solution helps to optimize the training
process, organize the exam as well as the learning process. Users can interact
anytime, anywhere through network-connected devices (computers, mobile
devices...).
In February 2021, FPT Corporation also successfully exported the online

education platform FUNiX to Japan. FUNiX is an online programming training
platform with a software-focused training program belonging to FPT Corporation,
100% Internet-based, providing basic courses such as “Introduction to IoT”,
“Blockchain”, “Automotive Programming”. According to Dr. Nguyen Thanh Nam,
founder of FUNiX, in a society with high self-study and training in 4.0 skills like
Japan, FUNiX has a great opportunity to be widely deployed thanks to its
reasonable cost, providing learners with initiative and an internationalized
environment.
During the time of social distancing, E-learning witnessed a galloping increase.

Specifically, VNPT E-learning of VNPT Group has 4 times more visitors,
reaching 5 million, with a peak of 100,000 visitors in an hour. ViettelStudy also
reached 41 million visits in a month and was used in 26,000 schools across the
country, including 29,000 lessons at all levels.
In general, with the advantage of abundant resources and reputations, EdTech

products from these large companies have a solid advantage over other small
and fledgling startups in the market, easily approaching corporate customers,
thereby having stable revenue.
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STEM/STEAM
As the demand for qualified IT engineers and developers is booming due to the
number of technology companies in SEA has mushroomed in recent years, the
trend of STEM/STEAM (Science, Technology, Engineering, Arts, and
Mathematics) is becoming more and more popular.
Businesses offering courses in machine learning, data science, and web

development are seeing unprecedented numbers of students. CoderSchool said
the number of students enrolling in the company's online learning has increased
by 100% every quarter since the beginning of 2020. The startup added that it
now has more than 2,000 students and more than 80% of its full-time users
landed jobs at companies like MoMo, Tiki, Shopee, Microsoft, and FPT Software
within 6 months of graduation. CoderSchool claims alumni earn 30% to 40%
higher than the industry average for inexperienced software engineers.
Learn-to-earn
Along with the phenomenon of Axie Infinity and the Play-to-earn (P2E) model
that is becoming an emerging trend in 2021, Learn-to-earn also promises to
bring a new learning model to users.
Deepview, inspired by Kahoot, an online media and learning game application, is

the first mover in the learn-to-earn model in the crypto ecosystem. Deepview will
provide learners with a virtual button that can be integrated into any video
learning website. The button will show up with suitable random questions that
have been given in advance for the learner to click on when the answers appear
in the video. Once the learner clicks rightly, she would get rewarded with
Pandend (PE) token, a crypto listed on Pancakeswap. With Deepview, learners
will stay focused longer and learn easier with higher motivation. In September
2021, Deepview's capitalization reached 3.88 billion USD and in November,
Zone Startup Vietnam signed an investment agreement and became a founding
shareholder of this startup.
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3.1. Opportunities
A profound technological transformation in education
Vietnam has made great strides in digital transformation in all aspects of life
and education is one of its top priorities. In particular, the pandemic
contributes to speed up the paradigm shift in education, both at cities and
provincial levels.
In the last five years, especially during the Covid period, many policies and
schemes promoting technology application in education have been approved by
the Government. Major policies enhancing EdTech development in Vietnam as
below:
June 2020: National digital transformation to 2025, orienting to 2030
program:
- Implementing and applying an educational model that integrates science,
technology, engineering, mathematics, art (STEM/STEAM).
- Providing Massive Open Online Courses (MOOCs) to all citizens.
- Popularize online exams, recognize the value of online learning certificates,
build a platform to share teaching and learning resources, etc.
July 2020: Official Dispatch No.4003/2020
- Schools and teachers actively build online teaching materials, focusing on
building E-learning lectures, online question banks, 3D materials, virtual
experiments, simulation software, interactive e-books, etc.
- Selecting online teaching software solutions (synchronous online teaching,
asynchronous online teaching), testing and evaluation software, digital data
warehouse software, etc.
The Ministry of Education and Training and the Ministry of Information and
Communications have signed a cooperation program to implement the National
College Program. Accordingly, the two ministries will work with digital businesses to
develop shared digital platforms in education and support schools, teachers, and
students with the conditions to deploy colleges such as internet connection,
management software, online teaching software, terminal equipment. National
databases on education and training will be fully completed to serve analysis,
forecasting, and policymaking for industry management; digital archives, open
learning materials are built with full content according to the educational program of
all subjects.
It can be seen that the Government is implementing many policies to support e-
learning and highlighting the digital transformation in education as an urgent
priority.
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Spacious room for development
Although Vietnam's EdTech market has gone through 5 stages of formation and
development, it can be seen that it is relatively young and has a lot of room for
exploitation. Startups are mainly small and fragmented, without serious investment
in building core technology and ecosystem for their products. The market segments
do not have a player that really stands out and affirms the leading position.
Therefore, the opportunity to dominate the market is still quite high. Startups need
to focus on innovation, apply advanced technologies, and connect with each other to
create a synchronous and seamless experience that meets customer expectations.
Enthusiastic investors with a large pool of capital
As mentioned above, Vietnamese people have a high willingness to pay for education
and Vietnam is currently at the top of the most vibrant EdTech markets in the world,
which are the factors that attract both domestic and foreign investment flows. The
shift of capital to Southeast Asia as investors are looking for potential unicorns in
fertile markets along with the readiness of startups and the government's approval
are important prerequisites for increasing the number and value of deals in the
EdTech segment in the coming years.
3.2. Challenges
Competing with traditional models
Although the growth rate of e-learning tends to increase (40%), the traditional
learning and teaching concepts still conserve their dominance.
Vietnamese people have a tradition of respecting their teachers, and the image of
teachers and students in the bricks-and-mortar classroom has been deeply ingrained.
Many teachers and parents believe that learning at school is more effective and
"worth the money" than online learning at home, and still appreciate the direct
interaction of teachers and students in real-life classrooms. Consequently, the
Vietnamese market for the online learning model is still premature compared to other
mature markets in the world and players in the EdTech field still have to change
perceptions and create trust among parents, who directly pay for products and
services.
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Lack of impressive products
Most of the products and services in the EdTech segment only stop at digitizing
learning materials, recording lectures, providing question banks for exams,... New
technology applications such as AI, VR, AR, etc have not been fully exploited to
create a multi-dimensional learning environment, improving the learning experience
of learners. This makes users not really immersed in learning on platforms and
applications, resulting in a rather low rate of completing courses and returning to
study. In addition, the presence of serious foreign players who not only have
modern technology but also offer reasonable prices creates fierce competition in the
market.
In addition, highly localized educational products are barriers for startups with a
long-term strategy of going global. A company can spend a lot of time and effort
researching, testing, and building content, but when it comes to the international
arena, they need to adjust the product to suit the needs of users in a new market.
Therefore, the founding team needs to outline a long-term and comprehensive
strategy for product development in order to satisfy the demanding requirements of
customers and attract investment at the same time.
Limited technology capacity and infrastructure
Many students find it difficult to have a comfortable learning environment at home.

Technical issues such as power outages or unstable internet connections are
barriers to users' online learning experience.
In addition, the teacher's ability to adapt to delivering education remotely greatly

varies. The majority of teachers are middle-aged people, not familiar with new
technology and may feel overwhelmed if they are suddenly required to use a whole
new set of technologies.
However, the Government has already drawn clear roadmaps to improve the
telecommunication infrastructure and educational institutions and the Ministry of
Education is building training programs to enhance the technological capability of
teachers, trainers, tutors, educators. As a result, these difficulties are hoped to be
handled in the near future.
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3.3. What’s next?
In terms of technology products, according to an expert of Teky Holdings
(Technology Innovation Center), from 2021 to 2025, the EdTech market in Vietnam
will continue to develop in three main phases:
Continue to flourish with units providing online learning content (online) - B2C
Studying Holon IQ’s Global Edtech 1000, the majority of companies cited as most
promising are focused on a “Direct to Consumer” model. This shows that the
individual customer segment still maintains its importance and is the first and
foremost target group businesses should focus on.
Currently, learning resources on applications and platforms are still quite limited
and have not met the increasing needs of users. Therefore, startups need to
continue to improve their pool of learning material, and diversify forms of learning
content.
Diversify digital transformation solutions for businesses and educational

institutions - B2B
Corporates and educational institutions are lucrative segments with great growth
potential for EdTech startups. With 3 categories SMS (School Management
System), LMS (Learning Management System) and CLS (Courseware & Learning
System), these are essential tools to help digitally transform traditional Vietnamese
school and training models. Enterprises with huge demand for human resource
training who ask for highly systematic and synchronous products also become
customers with high spending levels.
Dive into the most advanced technologies such as AI, AR, VR, robots,
blockchain, metaverse in teaching and learning
Rapid and continuous innovation is the recipe for success for all industries
and EdTech is no exception.
Education is characterized as a connected service, with human-to-human

interaction at its core value, and technology is now bridging the gap and optimizing
the individual's experience in the most personalized way possible. Here are a few
popular trends:
Virtual classroom to Tech-Enabled Immersive Learning environment

AR applications can help students experience models and specimens in the
most visual way thanks to AR. For example, 3D depictions of dinosaurs,
chemical elements, the human body parts (e.g. Adobe Aero)
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From Schools to Innovative K-12 homeschooling Startup & E-learning
Through technology advancements, students can now learn almost anything at the
click of a mouse or a swipe of a mobile phone screen. They expect to have well-
informed and easily digestible content at their fingertips. This shift is supported by
the increased efficacy of learning through online and distance learning
technologies. According to a study conducted by the 2020 World Economic Forum,
students retain 25-50 percent more material through online learning compared to
the traditional classroom model. Couple this with a 40- 60 percent decrease in the
amount of time needed to learn the material presented in e-learning environments.
EdTech apps and platforms will focus on providing a blend of in-person and live
online learning experiences. In addition, the uncertainty of Covid-19 causes
distance learning to become an inevitable part of student life, not only K-12, but
higher education is also moving significantly to e-learning.
Integration of AI & ML
AI is an aspirational trend in education. Applying AI, digital learning interfaces can
adapt to students' needs in real-time, providing the lessons and exercises that are
needed to fill in knowledge gaps and reinforce concepts.
AI and ML can be integrated into almost any EdTech solution including:
Making contents searchable using content-based tagging

Recognizing and extracting information from audio and video
Developing personalized learning experiences
Social-Emotional Learning
Researcher Petrea Redmond and colleagues have identified 5 important components
to increase online learning interaction: Cognitive Interaction, Behavioral Interaction,
Social Interaction, Collaborative Interaction, and Interaction Feeling. Research
shows that the perfect combination of these 5 interactive elements plays a very
important role in enhancing students' emotional self-attachment with the online
course, thereby promoting increased learning efficiency and course completion rate.
Indeed, one of the concerns associated with online learning is the lack of social
interaction among students leading to mental health problems. So, to balance the
real and virtual worlds and create an environment that encourages interaction and
discussion, social-emotional learning is indispensable. Some of the possible
solutions include:
Launching cloud-based contact centers to provide customers support

24/7
Integrating chat-bots to immediately answer questions in real-time
Analyzing student communication and work for indications of support
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4. Conclusion
The serious situation of Covid-19 has made e-learning an integral part of education
and helped maintain the learning of millions of Vietnamese students. After 2021, new
technology-based learning models have opened a new era, changing the habits of
both teachers and learners. While there are still some challenges, Vietnam will no
doubt remain one of the most promising markets for EdTech with perfect timing and
favorable conditions. Businesses in this field, if they know how to take advantage and
have a prudent strategy, will make great breakthroughs in the future.
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SaaS
1.Market overview
SaaS, which is considered as the fuel for the digital transformation,
is increasingly asserting its important position in all business fields.
In the last 2 years, SaaS is considered a business model with extremely impressive
growth rate. The global software as a service (Saas) market will reach $272.49 billion
in 2021 and will grow to $328 billion by 2022 at a compound annual growth rate
(CAGR) of 20.8%. All researchers forecast the CAGR of the SaaS segment to be no
less than 10% for the next five years. According to a report by BMC Software, 99% of
organizations will use at least one SaaS service by the end of this year. These
are all positive signals for the SaaS market.
Compared to other regions of the world, Southeast Asia is still quite early in its SaaS
adoption, its cloud computing market revenue is estimated to reach $40.32 billion by
2025 (Gartner). Here, Singapore is taking on the role of leader, followed by energetic
juniors Thailand, Indonesia, and Vietnam.
Figure: SaaS Industry Revenue Forecast

Source: Gartner
Driven by accelerating digital transformation, Vietnam's cloud service market stood
at $196.11 million in 2020 (Vietnam Cloud Service Market Report 2021), expected
to reach $233 million in 2021 with a growth rate of 18.8%/year. According to
domestic and foreign data, Vietnam currently has 39 cloud service providers, 27 data
centers of 11 enterprises, Vietnamese enterprises account for one-fifth market share,
foreign enterprises take the major share (80%).
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If in 2020, SaaS is still a relatively new term in Vietnam, just one year later,
SaaS has excellently become one of the top-of-mind solutions of not only large
enterprises but also SMEs, helping them to survive in the battle with the
pandemic.
As noted previously, the Covid pandemic proved to be jet fuel for the SaaS industry
as it made the work-from-home trend become mandatory due to the lengthy
lockdowns in Vietnam. Businesses have recognized the urgency to apply a lot of
digital technology in their operations, and cloud solutions, including infrastructure
and applications, are fast, convenient, and cost-saving in this difficult time.
In addition, the Government of Vietnam also created favorable conditions to promote

the digital transformation process of Vietnam, notably the National Digital
Transformation Program by 2025 with an orientation towards 2030. Deputy Minister of
Information and Communications Pham Duc Long said: Vietnam has set a target that
the digital economy will account for 20% of GDP by 2025 and 30% by 2030. In order
for the digital economy to account for 20% of GDP, the economy of the ICT industry
is expected to account for about 6 - 6.5%, of which Cloud computing enterprises are
expected to contribute 1% of GDP. As an economy with SMEs as the backbone,
accounting for about 98% of the total number of businesses, the Ministry of
Information and Communications of Vietnam also launched the SMEdx program with
the goal of supporting 30,000 companies after one year, providing a roadmap to
guide digital transformation for businesses.
2.1. A map of Vietnam’s SaaS ecosystem
At present, the cloud computing market in Vietnam is led by both domestic and
foreign suppliers. The key players in the Vietnamese cloud services market are FPT
Corporation, Viettel-CHT, CMC Corporation, IBM Vietnam, Microsoft Vietnam,
Amazon Web Services Vietnam, Mat Bao Corporation, NTC Cloud Computing, SAP
Asia (Vietnam), HPT Vietnam, Google LLC, and Salesforce.
The dynamism of SME businesses as well as the potential of the digital
transformation market has made SaaS platforms explode and big technology
enterprises have not missed their chance.
For example, FPT acquired Base.vn, VNPT officially launched oneSME, the first
comprehensive digital transformation platform for SMEs, providing many digital
services such as Telecommunications, IT, Business Administration, Electronic
transactions, specialized solutions for Health, Education, Agriculture,
Pharmaceutical, Logistics, Retail, Hotel management, and Viettel also started to
provide business services: IT (digital signature - VIETTELCA, electronic invoice -
SINVOICE, Declaration of social insurance - VBHXH; Telecommunication, IOT
(Management of means of transport - VTRACKING).
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Figure: Top 40 Vietnam SaaS Companies and Startups 2021
2.2. Existing market structure

There are 2 types of market expansion:
Vertical SaaS
Vertical SaaS companies focus on a particular industry, tailoring their solution to
the needs of a specific type of client. Examples: Vexere (Logistics), Mimosatek
(Agriculture).
Horizontal SaaS
Horizontal SaaS providers are the companies that serve a wide market, providing
solutions for all types of clients. Examples: Base.vn, 1Office, Misa Amis.
2.3. Notable deals in 2021

M&A deal between FPT and Base.vn - Setting the M&A trend for SaaS startups
The most prominent in 2021 is the FPT acquisition of Base.vn in May. This
cooperation is expected to promote the completion of a comprehensive digital
transformation ecosystem for hundreds of thousands of businesses, small and
medium enterprises (SME) in Vietnam, and at the same time put Vietnam on the
world digital map.
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At the time of its acquisition, Base.vn had more than 5,000 corporate customers
across Vietnam, operating in almost every field from finance and banking, education
and training, transportation, and communications. At the same time, Base.vn became
a comprehensive technology platform for businesses in Vietnam according to the
Ministry of Information and Communications, the most popular platform in Vietnam by
the number of monthly users. It currently has an average of 30 million users and 2.5
million monthly visits. In a year, Base.vn helps businesses process more than two
million proposals, 12 million jobs created, and more.
FPT and Base.vn together accelerate to promote development. By integrating FPT's

successful solutions into Base.vn's existing platform, the product launch rate will be
faster and faster. Next is promoting sales, because FPT has the advantage of a wide
customer network. The third is focusing on technology because FPT is proficient in
developing large systems and operating smoothly and securely. Finally, take
advantage of FPT's presence with 48 offices in 26 countries, to give Base.vn wings to
fly away.
It can be said that M&A with large technology corporations will be an ideal
divestment strategy for startups in the SaaS segment with Base.vn as a
successful precedent.
EI Industrial, established in 2019, successfully raised $670,000 for a seed round

led by Cocoon Capital with participation from BEENEXT in October 2021. EI
Industrial is the first online B2B marketplace in Vietnam focusing on industrial
sectors (Manufacturing & Construction), allowing businesses to sell and purchase
any industrial demands. Furthermore, EI Industrial also offers digital management
with SaaS WMS (Warehouse Management System) and E-Procurement.
Bizzi, a SaaS (software-as-a-service) platform that simplifies manual invoice data

processing through the application of AI technology and robotic process
automation (RPA). Bizzi's platform can be integrated with existing accounting
solutions and connects suppliers and customers to automate financial processes
such as checking, reconciliation, bill payment... Last October, Bizzi successfully
raised $3 million for the Pre-Series A round, led by Japanese fintech company
Money Forward, and with participation from domestic fund Do Ventures and pre-
round investor Qualgro from Singapore.
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3.1. Opportunities
Increasing use of mobile devices
SaaS products make a perfect match with mobiles: they help save space, access
information from different gadgets, update it instantly, and make team collaboration
fast and efficient. The same applies to the tablets and laptops that are used more
and more for work purposes.
According to market researcher Statista, among Southeast Asian countries,

Indonesia and Vietnam are the two markets with the highest number of users.
Vietnam had 61.3 million users and was among the top 10 countries with the largest
number of smartphone users in the world. This is a positive condition for SaaS
products to continue to reach a wide and stable customer base in the coming years.
Figure: Top 10 countries have the number of smartphone users

Source: Statista
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A sustainable upward trend in the demand for SaaS products
According to Mr. Nguyen Binh Nam, CEO of digital transformation consulting

company Opla Consulting, who has worked for many years at Oracle and Salesforce,
only about 30% of digital transformation businesses are successful. Enterprises
have not successfully digitalized because they have not clearly identified their needs
and prepared their staff awareness. However, 2021 has marked a turning point when
the management teams of companies have set the digital transformation as the top
priority and thoroughly prepared for the transformation in their businesses. Besides,
the examples of “Trail-blazers” that the group of businesses pioneered in applying
technology with optimistic results and their resilience during the pandemic is a strong
proof for the followers to accept this change. Mr. Nam added the enterprise's
investment in CRM, ERP, etc. is increasingly focused: "This is the time when
whoever owns the technology will have more advantages, such as effective internal
communication, more efficient, cheaper production costs, real-time reporting
information for more timely decisions, more effective remote sales team
management.”
Moreover, SaaS users are more and more diverse. Mr. Le Anh Bang, Haravan's
director of product development, also agreed that, if before 2000, the SaaS business
model was only used in large corporations, then right from the early years. In the
twenty-first century, many SaaS products have been chosen by many individual
users. According to Ms. Le Han Tue Lam, Director of Nextrans: “Industry factors can
affect the decision to use software, but sooner or later, all businesses in all fields
should integrate SaaS products.”
In the current context, the rapid increase in the demand for SaaS products by
Vietnamese enterprises, along with extremely favorable conditions is the perfect
timing for SaaS products to grow much faster and stronger.
3.2. Challenges
The domination of foreign enterprises
Big tech firms are dominating the market, with about 80% of the market share
providing cloud services. Big companies like Microsoft, Salesforce, Oracle, AWS
have all made a bold mark on the Vietnamese market and gained the trust of
customers due to their reputation and having an ecosystem or set of solutions for
software applications which are highly specialized and closely connected.
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In contrast, domestic solution providers seem unable to compete with international
peers. Although domestic enterprises have higher compatibility with domestic
customers than foreign ones, the vast majority of them just stop at one or a few
individual software applications, are fragmented, and lack comprehensive connection
and seamless user experience.
Therefore, in order to become more attractive to customers and win the

long-term battle with giants, SaaS businesses need to focus on building
products and ecosystems in a strategic approach. It is critical for local
suppliers to balance the domestic needs and “Go global” strategy in their
product development roadmap.
Concerns regarding digital infrastructure
Currently, the telecommunications and information technology infrastructure in

Vietnam still have many limitations.
One of the reasons why many businesses hesitate to adopt SaaS is the poor quality
and interruptions of Internet connection. Speedtest statistics showed that the
download speed of mobile networks in Vietnam reached 42.46 Mbps in July, lower
than the world average of 55.07 Mbps. In addition, in terms of fixed broadband
internet, Vietnam just stood at a download speed of 78.43 Mbps, far behind the world
index of 107.50 Mbps.
Fortunately, the Government has policies and initiatives to focus on upgrading

telecommunications infrastructure, fully exploiting the potential of cloud computing,
IoT, AI, and 5G, maintaining fast and stable connection speeds at a more affordable
cost to maximize the benefits from digital transformation, ensuring infrastructure
difficulties will be solved in the near future.
3.3. What’s next?

According to experts at Seminar on Developing SaaS models in the Green Normal of
FPT Techday 2021, 6 trends that will make the SaaS model more explosive in the
period from 2021 to 2024 are:
AI
Blockchain & SaaS
SaaS Connections & Integrations
Vertical SaaS, Mobile-First Approach
Remarkable Branding
According to Ms. Le Han Tue Lam from Nextrans, developing AI is the field that will
open up the most opportunities, not only for large companies, but also small and
medium enterprises, even startups to join the game.
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4. Conclusion
It can be said that 2021 is a spectacular breakthrough year for the Vietnamese SaaS
market. The combination of the long-term strategic direction of the Government, a
favorable legal corridor, positive indicators for the digital economy, and most
importantly a change in the perception of businesses about the urgency of digital
transformation are key factors that ensure the promising development of SaaS,
making it definitely become one of the most attractive areas for investors in 2022.
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MedTech
1.Market overview
1.1. Overview of Vietnam Healthcare industry
Healthcare spending is forecasted for experience a high growth rate in the
forthcoming years
Health expenditure in Vietnam amounted to $15.4 billion in 2020, equivalent to 5.7%
of total GDP. Last year in particular, the size of the healthcare market was strongly
boosted at 8.21% compared to average 6% of two previous terms, which is mainly
driven by the abnormal rise in demand for healthcare during COVID 19.
For the coming years, we expect this growth will be even higher backed by a large,
aging Vietnamese population and universal healthcare rollout efforts. Vietnam's
healthcare market could reach USD 22.8 billion by 2025 and USD 33.9 bn by 2030,
posting a 10-year compound annual growth rate (CAGR) of 9.2% in USD terms. At
the per capita level, healthcare spending is still modest at USD 158.4/year in 2020,
which is expected to reach USD 325.4 in 2030.
The public sector currently dominates the market
The healthcare system in Vietnam is a blend of public and commercial systems, with
the public sector playing a prominent role regarding both overall healthcare
expenditure (accounting for 56.7% in 2020) and the scale of infrastructure. Its future
is driven by the government’s intention to roll out a National Health Insurance
scheme as well as improving overall quality of healthcare services. According to the
Minister of Health, 90.85% of Vietnam’s population was covered by SHI in 2020. The
government’s goal is to pursue universal health coverage, with the next target
being 95% by 2025.
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However, the landscape is changing with increasing presence of private sector
There is growing demand for more accessible, higher-quality healthcare as the result
of overcrowded situations at public facilities, rising healthcare awareness. The
country’s growing middle class is also becoming more discerning about their own
health and their experience when receiving medical treatment. Together with that,
rapid rise of household incomes will also provide a boom for private hospitals that
generate a substantial amount of their revenue from out-of-pocket payments.
Lack of professional workforce remains to be a bottleneck of Vietnam’s

healthcare industry for years
In the next 5 years, according to the EIU, this situation could be even more serious
as Vietnam encounters difficulties in recruitment and training. The rate of doctors
per 1000 population in 2025 is expected to be 0.6, which is 5 times fewer than that of
the OECD’s average at 3.3 doctors per 1,000 people. In the meanwhile, imbalanced
geographic distribution of this workforce raises need to be urgently addressed. Many
medical personnel have moved from rural to urban areas, resulting in a lack of
qualified workforce at the grassroots level providing primary care yet overcrowded
situations in tertiary hospitals.
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And households’ out-of-pocket payments still stay at a high level
While spending a high amount of GDP on healthcare compared to regional peers,

Vietnam nevertheless still has a relatively high out-of-pocket expense ratio.
This situation implies that if Vietnam hopes to continue to expand access to quality
care and maintain sustainable health financing, the health system will need to find a
way to provide more services, while expending fewer resources per patient. The
MedTech industry, also known as “Digital health” is one answer to achieving scale
of access while improving clinical outcomes and maintaining costs.
1.2. Overview of MedTech industry

The MedTech industry is defined as the combination of all tech-enabled services,
platforms, and medical devices that simplify the prevention, diagnosis and treatment
of diseases and illnesses. The Vietnamese government recognizes the importance of
digitizing the health system and leveraging the use of digital technology to improve
healthcare services, which has been underway since pre-COVID-19. However, the
pandemic has presented an urgent need to accelerate the digital transformation of
healthcare to ensure that patients’ access to treatments is uninterrupted and increase
the system’s capacity and resilience. In the fight against COVID 19, a wide range of
digital health applications has been deployed in Vietnam to strengthen surveillance,
risk communication, diagnosis, and treatment of COVID-19. Such positive impacts not
only provide short-term solutions but also redefine the quality of healthcare services
in the long-term.
Vietnam’s digital health market can be divided into four main areas: Health
Information Technology, Telemedicine, Consumer Health Electronics, and
Healthcare Big Data & AI-based products and services. Currently, these areas are
in the early stages of development.
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How could startups leverage current issues to drive explosive growth in the
future?
The healthcare sector could benefit from scalable entrepreneurial innovations across
its value chain. Startups using digital technologies or low-cost models can
fundamentally alter how care is delivered.
By types of impacts, ACCESS, QUALITY and COST are three critical aspects

By key issues, the market presents huge opportunities for startup to disrupt
with technology-driven initiatives
The type of illness is shifting from communicable to noncommunicable illnesses

such as cardiovascular disease, diabetes, cancer,..
Telehealth is positioned to promote a healthy lifestyle and urge preventative actions.

The use of Big Data and AI allows for real-time, population-based, forward-looking
data that can help prevent or minimize noncommunicable illnesses while improving
treatment delivery.
Limitation on healthcare infrastructure, both hard (hospitals) and soft (labor

force)
By introducing technologies such as telemedicine and electronic health records,

MedTech may assist public hospitals manage capacity issues, enabling more and
simpler access to patients in rural places.
Telehealth and electronic health records can also help healthcare providers cut
cost by reducing paperwork, improving safety, eliminating duplicative tests, and
improving health outcomes.
AI and wearable tech have the potential to improve quality of care while reducing
cost of care in Vietnam. Layering AI and Big Data into the monitoring and
diagnosis process will give clinicians the ability to analyze multiple patient data to
provide timely, bespoke healthcare solutions.
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Low-quality services lead to unfulfilled patient experience throughout the
journey
Notable technology advances have been developed such as virtual assistants, online
video calls, online book appointments with doctors, … in pre-treatment diagnosis and
assessment and post-treatment.
Lack of skilled labor forces
AI & Machine Learning allows us to multiply virtual doctors to take responsibility for
far-away, grassroots care levels. Such robots or virtual assistants are trained to be
smart and knowledgeable or even more, which will help mitigate the shortage
situation of workers.
High out-of-payment ratio partly due to costly pharmaceutical products
Online pharmacies appear invaluable to better control the price of pharmaceutical

products. Such startups as Thuocsi, BuyMed provide customers with more
reliable sources of medicine at reasonable prices.
The ability to purchase and have medicines delivered to your home while sick or
busy is very convenient at any time, but during a global pandemic with movement
control orders in place, it is invaluable.
2.1. A map of Vietnam’s MedTech ecosystem
Despite being at early stage, Healthcare startup have made its move to capture
the trend
Digital health
startups exist
within a wider
ecosystem which
consists of different
stakeholders.
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Besides the government and associated organizations, private entities in various
sectors like telecommunications, IT, and insurance are also participating in digitizing
healthcare space. This creates a cooperative ecosystem between the government
and private players that will drive innovation and develop the sector.
Regarding startup stakeholders, the healthcare startup ecosystem continues to be
in its maiden phase, evidenced by limited healthcare startups, source of funding as
well as impact of their solution on traditional healthcare practice.
Although operating at a smaller scale, several healthcare startups have created
resonation in the market due to their outstanding products as well as successful go-
to-market strategies. In 2021, deriving from a sharp increase in medical demand
during the COVID-19 pandemic, healthcare technology applications have never been
more exciting than now, with the appearance of a series of applications such as We
Do Pulse, Google Fit, BMI Calculator, Vie Vie, Jio Health, Samsung Health, GlobeDr,
ICNM, ViDoctor, Doctor Anywhere, Dr.OH Pocket General Hospital...
Several key players in Healthcare startup market
Area: Pharma supply chain
BuyMed/Thuocsi: In Vietnam, it is common for pharmacies to purchase from

unlicensed agents. To tackle this, healthcare professionals spend a lot of time
sourcing drugs. BuyMed is a business-to-business (B2B) pharma distribution
marketplace founded in 2017 with the mission to leverage technology to solve the
issue of fraud and verification in pharma supplies. BuyMed has connected over
2,000 healthcare providers with verified suppliers. BuyMed won “Best Startup” at
Seedstars Vietnam 2018, raised $0.5 million in seed funding in September 2019,
and raised $2.5 million in a pre-series A round in April 2020.
Area: Outpatient clinics and health tech
Med247: Med247 is a local startup founded in 2019 in Hanoi. The startup

operates clinics, as well as a technology platform where patients can make
appointments, access medical records, or receive consultations online. In 2019,
the startup received seed funding (an undisclosed amount) from KK Fund and
angel investor Jin Hian Goh to open new clinics.
Area: Telemedicine
Vie Vie healthcare is a telemedicine company launched in 2017. The key investor
in Vie Vie healthcare has been Clermont Group, a private investment group based
in Singapore. Clermont owns Hoan My Medical Corporation, one of the largest
private healthcare networks in Vietnam. As such, one of Vie Vie’s competitive
advantages is its partnership with Hoan My Medical, a partnership which allows
Vie Vie’s online services to be integrated with the hospital network.
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Area: Doctor booking
The MedTech startup eDoctor’s platform allows users to book a doctor or nurse
for medical examinations and medical services in the privacy of their homes. The
platform offers an extensive variety of tests, like thyroid function, liver health,
cancer screening, etc. Users can view their examination results and ask questions
online. eDoctor is starting to gain a foothold in the business community, providing
regular health check-ups for large corporate clients Toyota, Honda, and FedEx.
This flows nicely into the government’s determination to find ways to support
patients who do not have easy access to medical care.
Area: Mental Health
While most MedTech startups focus on physical care, Mosia offers the first
platform in Vietnam with mental health as its priority. Using a peer-to-peer model
to connect users, it enables them to express their thoughts and emotions in a safe
space. This focus on mental health is very welcome in a country where 15% of
people are suffering from stress-related illness. During the COVID-19 lockdown,
loneliness became a major challenge, and mental wellbeing is often a forgotten
health problem. While clients can share their everyday challenges with other
customers and find support for expert advice, they can also connect with a
qualified counselor to overcome any mental issue, giving a rounded mental health
experience and real assistance for those that need it most.
Sources of funding gains momentum given digital adoption during COVID-19

might spur make this market become more mainstream
Global healthcare investment in the first half of 2021 hit $47 billion, more than double
2020’s first half pace. Fueled by venture healthcare’s rapid response to the pandemic,
venture capital fundraising boomed in H1 2021 to $21.8 billion, exceeding the full-
year venture healthcare record in 2020 ($16.8 billion ) by 30%.
In Vietnam, the situation has been nuanced since COVID 19 when Vietnam became a
shining point in Southeast Asia in the fight against the pandemic. The stressful
situation of the Covid-19 pandemic in the past two years is one of the reasons why
investors have rushed to pour capital into startups in the fields of medical
technology, pharmaceuticals, and healthcare in Vietnam.
Compared to approximately $3 million of venture capital inflow to healthcare sectors

in 2020 (According to Do Ventures), COVID 19 was a game changer to the
fundraising battle of Vietnam healthcare startups.
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Some notable deals in Vietnam’s Healthcare sectors in 2021
April 2021, Vietnam-based health-tech startup Docosan has raised $1 million in

its seed funding round led by Taiwanese venture capital firm AppWorks.
Singapore-based venture capitalist Huat Ventures and biotech entrepreneur David
Ma also participated in the round. It has recently added an online payment feature
and plans to launch tele-health and pharmacy services.
Medigo - a drug delivery application that combines advice from pharmacists and
doctors has also received an investment of 1 million USD from Touchstone
Partners Fund.
At the same time, medical start-up Medici received seed funding from Insignia
Ventures. This start-up is cooperating with more than 50 clinics and hospitals,
present in more than 30 provinces and cities with more than 100,000 electronic
medical records on the platform, 100% quarterly revenue growth and growth
monthly users reaching 20%.
August 2021, Doctor Anywhere announced the completion of a 65.7 million USD
funding round, coordinated by Asia Partners with the participation of investors
such as Novo Holdings, Philips, and OSK-SBI Venture Partners. This is one of the
largest private funding rounds of the healthtech sector in Southeast Asia.
The 315 Children's Clinic chain completed a Series A funding round.
Med247 application - the polyclinic combined with the digitization application of

this chain has had 95,000 visits for medical examination and treatment since
when released.
Growth driver for MedTech Industry in the future are highly materialized
Although currently being at the early stage of development, we could certainly expect
a leapfrogging pace of growth in the near future. The reasons include both rapid
change in demand for healthcare services, positive support from the Government and
the outstanding impacts technology could bring in to alleviate current problems in
conventional healthcare markets.
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Fast growing economy
Vietnam’s economy has been growing at a fast pace: CAGR ~7.5% for the period
2015-2020. As the economy grows, GDP per capita is expected to increase at CAGR
5.2% -5.7% till 2025. Forecasted higher personal income will likely drive spending on
healthcare service in general and Health Tech solutions particularly.
Aging population
Vietnam has one of the fastest aging population in the world. According to the World
Health Organization, the Vietnamese population is aging rapidly with % of people 60
years old will reach ~14% in 2025f and ~61% by 2050f. This trend will put
tremendous pressures on welfare, pensions and the overall healthcare system, which
raises further demand for new initiatives of services providers.
Swift change in consumer demand
The rise in disposable income and awareness of technology disruption bring in higher
levels of expectation for healthcare services as well from consumer view. As a
digital, tech-savvy citizen, they expect a more easy, transparent process of health
services, which then could get access through online channels rather than far
traveling and line queuing in hospitals.
Therefore, there are business opportunities in the creation and provision of
technologies or applications that can improve the patient experience and access to
care such as digital services such as appointment booking, doctor selection, bill
payment, and mobile health applications.
Digital readiness to support overarched transformation
Telecommunication infrastructure has grown significantly over the past five years
across both internet and mobile sectors. Daily usage of the internet in Vietnam has
become increasingly prevalent. On average, an individual spends nearly 7 hours on
the internet every day, nearly half of which on social media. The continuous
improvement of Vietnam’s telecommunication infrastructure and widespread
popularity of social media enables the country to become better positioned to adopt
digital health solutions.
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Government’s initiatives to promote national digital transformation program
The government is encouraging investors to participate in the development of digital

health in Vietnam, including telehealth. Their motivation is more specific with recent
declaration and plans:
The goveEffective on January 1st, 2021, the amended Law on Investment (LOI)
incentivizes investment in both healthcare and IT-related industries through
preferential income tax, real estate, and credit laws.
Decision No. 749/QD-TTg: Healthcare is amongst prioritized sectors for digital
transformation.
Government’s master plan for EHRs promotion (Decision No. 5349/QD-BYT) and
digitizing patients’ records at hospitals and setting up smart hospitals (Decision
4888)
rnment is encouraging investors to participate in the development of digital health
in Vietnam, including telehealth. Their motivation is more specific with recent
declaration and plans:

3.1. Opportunities
Vietnamese startups should be mindful of the trends driving healthcare
technology in the next 5 years.
Artificial Intelligence (AI) in Healthcare
AI and Machine learning has proved itself invaluable not only regarding COVID 19
prevention and treatment but also long-term impact on physical and mental health.
AI is incredibly helpful for improving efficiency with information processing and
decision making. In the healthcare industry, machine learning is extremely helpful for
the development of new pharmaceuticals and the efficiency of diagnosis processes.
In order to make artificial intelligence succeed in healthcare, the most important
element that is data. More specifically, training data. The higher the quality and
breadth of the data we give to the model, the better it will perform.
Telemedicine and the Evolution of Remote Care
Telehealth has come a long way since the beginning of the pandemic in 2020. The
infrastructure to support this has vastly improved. Telehealth is expected to grow to
$185.6 billion by 2026.
One of the most important technologies that will be needed is WebRTC, an open-
source API-based system that connects web browsers and mobile applications and
allows for transmitting audio, video, and data.
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Extended Reality in Healthcare Settings
Extended reality, a blanket term including augmented reality, virtual reality, and
mixed reality, has a great deal of potential in the healthcare industry. One of the
most popular and useful forms of this technology is the use of mixed reality headsets
which is extremely helpful in undertaking the surgery. VR can also be used in some
contexts for treatment and greatly contribute to the recovery process of patients.
IoT and Wearables in Healthcare

With wearables and IoT technologies becoming more popular, their potential in the
healthcare industry has grown significantly. There were 11.3 billion IoT devices
connected at the start of 2021. The global IoT medical devices market is projected to
reach USD 94.2 billion by 2026 from USD 26.5 billion in 2021.
The ability to monitor the status of a patient throughout the day remotely or for an
individual to monitor their own status make this technology incredibly valuable. A
survey conducted by Deloitte found that 39% of users had a smartwatch. Healthcare
providers can use this data to help advise patients and complete diagnoses.
Another profound application for IoT technology in healthcare is the concept of a
smart pill, which transforms The Internet of Things into The Internet of Bodies. Smart
pills are edible electronics that not only serve as pharmaceuticals, but can provide
care providers with valuable information about patients.
3.2. Challenges
Challenges, however, remains critical to resolve
Some notable challenges startup should notice before launching digital healthcare
services
Vietnam still lacks a solid regulatory framework and standards governing health
technology. This make investors uncertain and hesitant to invest
Underdeveloped infrastructure, especially the district health centers and the
communal level in rural areas.
Many older patients and people living in remote areas have limited access to
technology, thus require a certain level of additional infrastructure before they can
leverage digital health.
Challenges for changing the behavior of medical professionals and patients in
shifting old-fashioned paper documentation to online services.
Accuracy of patient data interpretation/ standardized data and Quality and
accuracy of current diagnoses that AI would be based on.
Availability of qualified health care professionals that can use AI products
Willing-to-spend might not be equal between different regions
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3.3. What’s next
To succeed in Vietnam, new startups in digital healthcare should consider
several important factors.
First and foremost, deciding on the best legal structure to join the market is a critical
choice that will have an influence on the establishment process, taxation, legal limits,
and overall business capabilities. Collaboration with local IT service providers or
medical device distributors can help you get to market faster. In this constantly -
changing industry and uncertain era, it's more crucial than ever for digital health
businesses to collaborate with a partner that is focused on long-term success rather
than short-term benefits. Local partners will assist with adjusting to the local
business culture and ensuring product adaptation to the local market.
Second, businesses should devote resources to raising awareness of digital solutions

by first learning about the Vietnamese healthcare industry, including its people,
procedures, and technologies.
Finally, It's just as crucial as how your product interacts with customers. Any service
product, especially telehealth care goods, should be designed with the user in mind.
If you make it more difficult for your customers to contact you or utilize your service,
they will become irritated or even fatigued, and they will seek out another supplier.
You will win if you focus on your patient's experience, providing the finest treatment
possible, and assisting them in seeing better versions of themselves and living their
best lives.
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ESG
1.Market overview
ESG stands for Environmental, Social, and Governance. Investors are increasingly
applying these non-financial factors as part of their analysis process to identify
material risks and growth opportunities.
ESG examples are often interlinked, therefore it can be challenging to classify an
ESG issue as only an environmental, social, or governance issue. This following
table provide an understanding on typical elements of each E, S & G pillar.
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The Rise of Responsible Investment
Environmental, Social and Governance (ESG) investing began with a letter and call to
action since January 2004 when UN Secretary-General Kofi Annan wrote to the CEOs
of significant financial institutions to take part in an initiative to integrate ESG into
capital markets. Since then, ESG has evolved and moved from the sidelines to the
forefront of decision-making for asset managers and institutional investors.
COVID 19 acts as a strong catalyst for ESG thrive to a prominent investment

trend globally
One of the clearest signals to emerge from 2020 in a difficult year was that
environmental, social, and governance (ESG) issues are here to stay. Instead, the
epidemic has sparked a discussion about what societies truly value, while also
revealing the depth of global interconnection and the "tragedy of the horizon," in
which nations fail to prepare for the long term and only address problems when it is
too late.
The development of awareness on systemic issues such as climate change,
inequality... has promoted the trend of investment according to ESG criteria
(Environment - Society - Governance)
Inflows into funds focused on ESG issues hit a record high of $649 billion this year
through Nov. 30, according to the latest figures from financial services firm Refinitiv
Lipper compared to the figures of USD 542 billion and USD 285 billion recorded in
2020 and 2019.
According to Morningstar, ESG funds attracted record cash flows last year, twice as
much as a year earlier. Net money from investors pouring into sustainability funds
totaled $51 billion, rising to a record high for the fifth consecutive year. Also in 2020,
in the US recorded nearly 400 ESG investment funds, an increase of 30%, and at the
same time has quadrupled in a decade.
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ESG Practice in Asia and Vietnam
The pandemic has raised awareness and focus of ESG among investors in most
markets, particularly Asian issuers who have a more environmentally and socially
focused attitude according to Sustainable Finance and Investment Survey HSBC's
2021.
In Vietnam, businesses and investors have also recently paid more attention to ESG,
not only because of the provisions of the law, but also because it is a trend and good
practice in the world.
The International Finance Corporation (IFC) even started to widely communicate

this concept 10 years ago.
Tundra Frontier, a fund specializing in investing in frontier markets, has also
focused on ESG investments since its inception.
Most recently, the AFC Vietnam Fund announced that it will start applying eight
ESG criteria to evaluate investment opportunities in businesses from 2021.
Dragon Capital has improved its ESG policy and developed a new ESG evaluation
framework. for listed companies. The Fund has established a dedicated ESG
division, with analysts regularly monitoring the companies in the portfolio,
updating the ESG checklists and ratings.
Growth drivers for ESG investment in Vietnam
The pandemic has raised awareness and focus of ESG among investors in most
markets, particularly Asian issuers who have a more environmentally and socially
focused attitude according to Sustainable Finance and Investment Survey HSBC's
2021.
3.5% 79%
The proportion of Vietnam's
Percentage of investors in
national income may decline due to
Asia-Pacific in ESG 2020
the effects of climate change by
2050, projected by World Bank
8% 51
Vietnam's target to reduce Vietnam's ranking out of 165
emissions (GHG) by 2033 countries in the SDGs Index
$128.3B $30B
Total proposed investment for Total amount of money the GGGI
Vietnam's National Energy expects Vietnam to implement the
Development (2021 - 2030) green growth strategy in 2030
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Challenges for ESG
Whilst increased advocacy has seen a growth in awareness of ESG risks, Vietnam’s
sustainability remains relatively low overall, and there is a corresponding deficiency
in effective policies to manage those risks at a micro and macro level.
Stemming in part from a lack of awareness, the adoption of international standards in

Vietnam is generally lagging. While almost all public companies in Vietnam now
perform an environmental and social impact assessment when investing in a new
project, many see this exercise as merely procedural
Until now, there has been little progress in bringing the local standards utilized in
these examinations up to international norms. And this just covers environmental
criteria, as well as the role of corporate governance in environmental issues. At this
point in the country's growth, there are a few major roadblocks.
To begin with, being a frontier market, access to information in Vietnam is always a

challenge for international investors, and this is especially true when it comes to ESG
data. There are few obligatory disclosure duties in place right now, and a strong
corporate culture of voluntary disclosure has yet to emerge. Furthermore, while there
are rules and examples of how to apply ESG criteria effectively in private
investments, the dynamic in public equities is quite different.
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88
END
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2021

An upturn was recorded in both value of investment to new projects as well as

Particularly, Vietnam saw many large-scale FDI projects in the January-September

In 2021, investment capital poured into start-ups in Vietnam has grown

Entering 2021, when investment funds and startups are

One of the areas with the most

According to Google statistics in the "Outstanding Search Trends" category, 5 of the

Most of deals invested in Vietnamese

Southeast Asia’s large population of unbanked and growing Internet penetration

There is at least $10B of unrealised value in VC-backed fintech

Interestingly, Southeast Asian startups have a faster journey to exit

Of all notable fintech startups

Vietnam accounts for 9%

Figure: Fintech Ecosystem in Vietnam, Mar 2021. Source: iDauTu.com

Vietnam welcomes more startups in the fields of insurtech (insurance technology),

2.2.1. Digital and Mobile Payment

Figure: Vietnam warming to e-wallets. Source: J.P. Morgan

VNPAY, developed by Vietnam Payment Solution Joint Stock

In March, pre-pay post-purchase startup Fundiin raised about $1.8M in Pre-

2.2.3. Wealth Management (WealthTech)

There have been a number of outstanding start-ups such as Finhay, Infina,

Peer-to-peer lending is gaining more attention, especially in Vietnam. Peer-to-

2.3. Notable Deals in 2021

Another challenge is creating a sustainable growth strategy to ensure success. Real

Taking a closer look,

Compared to other Southeast

Covid is an unexpected catalyst for growth of e-commerce recently

Although it has achieved a miraculous growth rate in recent years, e-commerce in

Covid-19 has also helped speed up digitization. Businesses instead of using

1.2. Key growth drivers

Vietnam is a fast-growing internet economy

Covid-19 has also helped speed up digitization. Businesses instead of using

Source: Google, Temasek and Bain & Company

In addition, the Vietnamese government has unveiled a national e-commerce

1.3. Notable trends in E-commerce

Some notable deals in 2021 are listed as below:

AIA, UBS AG,

From investors’ side, Vietnam's E-commerce sector is going through an

In Southeast Asia, there is also a spate of e-commerce enablers mushrooming, such

Figure: Vietnam's key e-commerce players

2.1.1. B2C e-commerce landscape

2.1.2. B2B e-commerce landscape

Some notable startups recently successfully fundraising are such as Telio, EI

Telio: an e-commerce platform connecting retailers with brands and wholesalers

3. Opportunities & Challenges

Digital payment become popular

Logistics will take the lead

In 2021, consumers expect more efficient deliveries. Therefore, businesses and

E-commerce businesses are facing difficulties of disrupting supply chain and

Strict lockdown measures to suppress Vietnam’s worst outbreak of COVID infections

Vietnam’s B2C commerce is still an array dominated by the 4 biggest players:

The COVID-19 outbreak has introduced e-commerce to a large number of Vietnamese

On Shopee’s platform, the time that Vietnamese consumers spend shopping

2020 vs 2019 2021 vs 2020

Chopp: an online grocery service in HCMC and Hanoi. It currently partners

Supermarket offer online delivery services: Coopmart, NowFresh, Bach Hoa

Logistics, ride hailing

Lo Ship: LoMart provides in HCMC and Hanoi

Shopee: the foreign e-commerce marketplaces also started the delivery of

In additional, some new model evolving from e-commerce, which is social

Several infrastructural challenges will need to be overcome

Need new feature to attract customers

Bargaining power of supplier