ICT to Vietnam
(Last updated: 13 Oct 2011)
Trends and opportunities
ICT business opportunities
Mobile content:
- Niche opportunities for mobile content, applications, and solutions
- Value-added services for interactive mobile, Internet, and television
Broadband IT:
- Developing alternative broadband technologies, including WiMAX and fiber
- Partnering with established network operators to provide 3G services
IT services:
- IT technical training and IT consulting
- Software/hardware development/enterprise applications
- Data centre/storage
- Web services
Digital/hardware equipment:
- Computer and its components
- Storage system and equipment
- Office automation equipment, accessories and suppliers
- Other hardware products
Others:
- Financial IT (mission critical applications, expert systems for various bank functions, banking sector and securities online trading and e-commerce)
- E-health
- E-government
- Cloud computing
Why is this market attractive for Australian companies?
Vietnam is arguably the most vibrant economy within the Association of Southeast Asian Nations (ASEAN) and has had the region’s highest GDP growth rates for the past several years. Vietnam was Australia’s 16th largest trade partner in 2009, with goods and services totalling A$5.6 billion.
Vietnam’s strong economic growth, ongoing economic reforms, and a large young population combine to create a strong demand for new technology.
Vietnam is an emerging ICT market.
- GDP growth reached 5.8 per cent on an annualised basis in the first quarter of 2010 during global crisis. The government announced that it was targeting annual economic growth rates of between 7.5 per cent and 8.5 per cent between 2011 and 2015.
- World’s second fastest growing ICT market, estimated 20-25 per cent annually. ICT revenue in 2010 reached $7.4 billion.
- Import tax reductions due to WTO commitments and AANZFTA.
- Increased investment and strong commitments from government to develop ICT and attract foreigners.
- Population is young and dynamic (60 per cent of over 88 million of population are under 35). The use and ownership of state-of-the-art hi-tech IT and telecommunications equipment are increasing rapidly.
- Vietnam's Internet user base was thought to have passed 27.5 million (ASEAN largest, 20th highest in the world).
- Telecommunications and related industries are currently among the fastest growing industries in Vietnam and Top 3 fastest growing telecom market in Asia.
- Three Vietnam companies in world Top 100 mobile service providers (Viettel, Mobilefone, Vinaphone).
- Mobile network operators were serving approximately 110.8 million subscribers at the end of 2009. This represented 85 per cent of the nation's 130.4 million telephone subscribers.
- Software industry growth averaged 33 per cent with 1,000 companies and 57,000 employees are working in.
- Emphasis on human resource development. With more than 15,000 university graduates each year, and another 10,000 college graduates, IT labour force is keeping up with quantity demand, but there is a great need to improve IT training quality. In 2009, the Vietnamese government has committed to train and supply one million skilled-IT workers up to 2020. This will be a great opportunity for Australian IT/technical training firms.
Market challenges
- Lack of a comprehensive and transparent legal system
- Inadequate skills and funds for ICT in the health sector
- Lack of key strategic investors in IT sector’s main operators whilst the pace of deregulation is irregular
- The fixed line sector remains largely monopolised
- There are an increasing number of inactive mobile subscribers
- Enforcement of all forms of intellectual property rights is weak
Marketing your products and services
Top tips to be successful in Vietnam
- Establishing contacts and networks is easier and created more confidence in customers if the first meeting is through an introduction from a known Vietnamese business contact or through an official channel such as Austrade or Australian Embassy.
- Silence: do not feel compelled to fill silences that may occur during business negotiations. Being silent is particularly useful if the Vietnamese have made an unreasonable demand or proposal.
- Time: do not be hurry if the negotiations may be lower than expected. The most important quality in negotiations with Vietnamese is patience.
- Follow up: as business decisions are not usually made during an initial meeting, it is often beneficial to send a written proposal well before the meeting if an immediate response is required.
- Most of your business contacts in the foreign invested companies will be able to speak English but this may not be the case with government ministries and state owned enterprises. You will need to speak slowly and concisely.
- Vietnamese people often smile and agree with you but that doesn’t mean your contract is finalised. Written agreement is a must.
How does doing business in Vietnam differ from Australia and what do Australian companies need to do in approaching this market?
One of the keys to business success in Vietnam is to understand that local customs and behaviours have a significant effect on business relationships. While there are few formal limitations to doing business in Vietnam, there are some informal barriers and practices that differ from Western norms.
Key ICT events in Vietnam
Vietnam International Communications Summit & Expo 2011 – www.vietnam-comm.com
Links and industry contacts
ICT-related resources
Hochiminh Computer Association – www.hca.com
IDC – Vietnam ICT market overview – www.idc.com/getdoc.jsp?containerId=IDC_P19679
Ministry of Information and communication – www.mic.gov.vn
Ministry of Science and Technology – www.most.gov.vn
Vietnam Software Association – www.vinasa.com
Contact details
The Australian Trade Commission – Austrade – is the Australian Government’s trade, investment and education promotion agency.
Through a global network of offices, Austrade assists Australian companies to grow their international business, attracts productive foreign direct investment into Australia and promotes Australia’s education sector internationally.
For more information on how Austrade can assist you, contact us on:
Australia ph: 13 28 78 | Email: info@austrade.gov.au
A list of Austrade offices (in alphabetical order of country) is also available.