In recent years, Vietnam has emerged as a beacon of economic growth in Southeast Asia, with a rapidly evolving digital landscape. For Software as a Service (SaaS) companies eyeing global expansion, Vietnam presents a unique and promising market ripe with opportunities. This article delves into why SaaS companies should consider entering the Vietnamese market, and the opportunities it presents.
Vietnam is currently one of the fastest growing economies in the world, consistently seeing a year on year growth rate upwards of 5%. The country has witnessed a remarkable surge in its digital economy, fueled by an increasing number of internet users and a tech-savvy population. With nearly 80 million internet users and counting, the demand for digital solutions is soaring.
As technology becomes more ingrained in daily life, the tech literacy of the Vietnamese population is on the rise. Businesses and individuals are becoming more comfortable with digital tools and solutions. This shift in mindset creates a fertile ground for SaaS companies to introduce their products and services across various sectors, meeting the evolving needs of a digitally literate population. SaaS companies have the chance to capitalize on this trend by offering innovative and scalable solutions to businesses and consumers alike.
Additionally, Vietnam’s startup ecosystem is gaining momentum, especially in the technology sector. Ho Chi Minh City holds the third position in ASEAN concerning ecosystem value, contributing an economic impact of USD 5.2 billion, following Singapore and Jakarta. The country’s early-stage funding stands at USD 198 million, making it the fourth-highest in the region. Foreign SaaS companies entering the market have the opportunity to collaborate with local startups, fostering partnerships that can drive mutual growth. This collaborative environment allows for the exchange of ideas, expertise, and resources, creating a vibrant ecosystem that benefits all stakeholders.
Small and Medium Enterprises (SMEs) form a significant majority in Vietnam, comprising over 98% of the country’s approximately 800,000 enterprises, as reported by the Vietnam Association of Small and Medium Enterprises. Recognizing the financial constraints of SMEs, the Software as a Service (SaaS) model is emerging as a prospective technology solution. This is particularly relevant for SMEs, which often operate with limited budgets and resources.
Moreover, SaaS companies entering the Vietnamese market can benefit from the country’s cost-effective workforce. Vietnam offers a skilled pool of software developers and engineers at competitive rates. Foreign companies can capitalize on this advantage to efficiently scale their operations, develop innovative solutions, and bolster their global competitiveness. The SaaS model, by eliminating the need for extensive physical system investments, aligns well with the budgetary considerations of SMEs, saving them substantial amounts of money, time, and resources.
The Vietnamese government has actively embraced technology as a driver of economic growth. Initiatives aimed at fostering a technology-driven economy, coupled with supportive policies and infrastructure development, create an environment conducive to business success. Foreign SaaS companies entering Vietnam can benefit from government support, including tax incentives and a regulatory framework that encourages innovation and investment. A key example of this is how certain softwares and software products are exempt from value added tax (VAT), subject to meeting certain requirements.
Vietnam stands as a promising frontier for SaaS companies seeking expansion opportunities in Southeast Asia. With a growing digital economy, a thriving startup ecosystem, an increasingly tech-literate population, a cost-effective workforce, and government support, the Vietnamese market holds the potential for foreign companies to establish a strong presence and contribute to the nation’s evolving tech landscape. As the global SaaS industry continues to evolve, Vietnam represents not only a market but a strategic gateway to the dynamic and burgeoning economies of the region.
In Vietnam’s diverse market, SaaS providers may face challenges, which can be navigated seamlessly with the assistance of ASEAN Business Partners. Our regional expertise aids in customizing solutions, ensuring compliance, and overcoming hurdles. This collaborative approach not only distinguishes SaaS platforms but also establishes trust by providing localized, reliable solutions. With the support of ASEAN Business Partners, SaaS providers can effectively tap into Vietnam’s burgeoning market and contribute to its digital evolution.
Kavita Panda is our Chief Operating Officer and Country Manager for India. Kavita was Executive Director of The Walt Disney Company India, wherein, she spent a decade and half in various business roles across Content Syndication, Licensing and Merchandising, Solution Sales and Advertising Sales.
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