VIETNAM
MIS648 - Country IT Profile and Analysis
Geoff Duff
Todd Herman
Joe Hench
Christina Scantland
Vietnam: Demographics
 Population
 Health
 Literacy
83.5M
70 yrs.
90.3%
POPULATION (PEOPLE)
VIETNAM POPULATION
66%
60000000
50000000
40000000
30000000
28%
Female
Male
20000000
6%
10000000
0
0-14
15-64
AGE (YEARS)
65+
Avg. Age:
25.5
Vietnam: Socio-Culture
 Language
 Vietnamese (official)
 English (increasingly favored as a second language),
 Ethnicity
 Kinh (Viet) 86.2%,
 Religion
 NONE 80.8%
 Buddhist 9.3%, Catholic 6.7%, Hoa Hao, Cao Dai,
Protestant, Muslim
Vietnam: Socio-Culture
 Education
 High Respect for Learning
 Politics
 Communist legal theory
 French civil law system
 Government IT Commitment
Vietnam: Economics
 GDP $227.2 billion, 7% annual increase
 Gini 36.1
 Primary Industries
 Agriculture 21.8%
 Industry 40.1%
 Services 38.1%
 Labor Force 43 million
 Unemployment 1.9%
 1 USD = ~15,000 Vietnam Dong (VND)
Vietnam: Economics
 Trade
 EXPORTS $23.7 billion
 US 19.8%, Japan 13.7%, China 8.4%
 IMPORTS $26.3 billion
 China 13.6%, Japan 11.5%, US 4.1%
 Debt 66% of GDP
Vietnam: Physical
 Geography
Vietnam: Physical
 Geography
Vietnam: Physical
 Geography
Vietnam: Physical
 Weather
 4-10’ annual rainfall
 Topography
 40% mountains
 40% hills
 75% forests
 Transportation
 Highways, Railways,
Waterways
 Natural Resources
 phosphates, coal,
manganese, bauxite,
chromate, offshore oil
and gas deposits,
forests, hydropower
Vietnam IT Industry
 9 phones per 100 people
 15-18 phones per 100 people by 2010
 Focus on mobile phone technologies
 3.5 million (4.3% of population) internet users
 200% annual growth in internet users
 IT revenues = US$685 million in 2004
 33% increase compared to global increase of 5%
 Education and Training spend: $45.8 million 02-05’
GLOBAL INTERNET STATISTICS, DECEMBER OF 2003
Country
Population
Internet users
Percentage
%
ASEAN
Singapore
4,225,000
2,100,000
49.70%
Malaysia
24,000,000
8,629,000
35.95%
Thailand
63,300,000
6,031,000
9.53%
Vietnam
81,000,000
3,500,000
4.32%
Indonesia
231,340,000
8,000,000
3.46%
ASEAN
555,772,000
31,868,000
5.73%
1,287,000,000
79,500,000
6.18%
292,300,000
200,500,000
68.59%
Other countries
China
US
Continents and the World
Asia
3,808,790,000
243,406,000
6.39%
World
6,315,820,000
715,350,400
11.33%
Vietnam IT Industry
Strengths
• Export Software, $60m 2004
• Government IT Blueprint
(ASEAN, VPTC, Education)
Weaknesses
• Global skills, language capabilities
• Rural population and IT affordability
• IT centers, software parks
(Saigon Software Park)
Opportunities
• Japan Partnership, 40% of exports
• Government regulation changes
enable foreign (Private) investment
Threats
• Asia-Pac region competition
(China, Singapore, Malaysia)
Vietnam vs. China
 Regional similarities
 Long-Term orientation
and Masculinity differ
 Rigorous foreign
investment in China
 Behind China in
embracing capitalism
Vietnam IT Industry
 Ministry of Post and Telecommunications
(VPTC) oversees IT strategy
 Blueprint to invest US$4 billion from 2002-2010
 Telecom infrastructure, HR, IT access and usage
 Forecast IT revenues of US$6-7 billion by 2010
 www.mpt.gov.vn
 Association of Southeast Asian Nations
 e-ASEAN: regional initiative to promote electronic
government
Vietnam IT Industry
 6 State owned Telecom providers
 Government initiative to open 40-50% to non-state
ownership by 2010
 Drives international investment, competition and
growth
 Result of 2001, Bilateral Trade Agreement (USA)
Vietnam IT Industry
 Local IT resource limitations
 72 percent are inexperienced
 46 percent lack knowledge of the IT industry
 42 percent are unable to work in groups and are
bad at foreign languages
 41 percent have limited skills and are bad at
presentations
 28 percent are unconfident in their work.
 Government focus on Education, Training, HR
Vietnam Economy & IT
 IT industry producer characteristics
 Of the US$685 million in 2004, hardware
expanded 32.9 percent, and software increased
33.3 percent, the highest since 2001.
 Software
 Prior to 2004, Singapore led importers of
Vietnamese IT products. In 2004, Japan
purchased 40% of total and became a strategic IT
development partner in Vietnam.
 IT software companies lack skilled and foreign
language-speaking workers.
Vietnam Economy & IT
 PC manufacturing
 Viettronics Tan Binh Electronics Corporation (VTB)
a member of Vietnam Electronics and Information
Technology Corporation (VIEC), Hanel and Vietronic
Thu duc
 As of 2003, 20 companies assembling Vietnamese
brand computers; 25-30% of market of 350,000
units.
 612 Domestic companies and 117 Foreign-invested
firm engaging in computer assembling and
production.
 As of 2003, domestic market share was 75-80% of
market.
Vietnam Economy & IT
 Internet Service Providers (ISPs)
 Currently 12 ISPs with 3 Internet exchange
providers (IXPs)
 Vietnam Data Communications Company
(VDC), Saigon Postel, Vietel, ETC, and
Hanoi Telecom.
 www.saigonpostel.com.vn/
 Tariffs on Internet and telecom services
have been gradually decreasing in will
continue.
Vietnam Economy & IT
 IT industry consumer characteristics
 Retail Computer Sales
 Previous years only 40% of sales targets were met
within first 6 months. In 2005, 60% sales targets
were met within same time frame, approximately
260,000 desktops sold.
Vietnam Economy & IT
 Business Climate of Vietnam
 1986, Central planned to Market based economy.
 Total number of fixed and mobile subscribers in 2005 is
approximately 13.5 million.
 In 2002, 150 of 5600 remaining state owned
enterprises (SOEs) were reformed. The government
plans to reduce the number of SOEs to about 2000 by
2005.
 Non-state Telecom sector increase market share 2530% by 2005. 40-50% by 2010.
 Corporate monopoly is expected to be removed by
2006 due to Bi-Lateral Trade Agreement between
Vietnam and USA.
Vietnam Economy & IT
 Key factors to emerging IT market
 Investment in IT development by Ministry of
Post and Telecommunications.
 Government is concentrating on upgrading IT
networks in government and private sectors.
 Government is committed to opening the
Internet sector to private sector.
 Government gives strong support by building
up numerous hi-tech and software parks.
 Saigon Software Park www.ssp.com.vn
Vietnam Economy & IT
 Main deterrents to trade and investment are:
 the lack of a comprehensive and transparent legal
system
 restricted land usage rights
 complex foreign investment laws
 continued corruption in infrastructure projects
 the poor state of the financial system
Current Free Trade Trends
External Factors
U.S.-Vietnam Bilateral
Trade Agreement (BTA)
ASEAN Free Trade Area
(AFTA)
WTO Negotiations &
Compliance Plan
Internal Factors
“Doi Moi” Policy-1986
Decree 55 – Internet
Policy 2001
Creating a New
Market Environment
Trade/Investment Risks
• Heavy State Control in Business
– Minimal Privatization (though improving)
– State Control of Telecommunications (DGPT)
• Intellectual Property Rights
• Access & Understanding of Vietnamese
Law
• Lower Quantity and Skill Level of IT
Personnel
Investment Opportunities
Outsourcing of Software & Hardware –
Low Risk
 Currently Japan & Singapore are Heavy
Importers of IT Products
 Japan has become a Development Partner
 Low Level of IT Skilled People in Vietnam –
Means Lower Level of Complexity in Product
Investment Opportunities
Telecommunications Infrastructure – High Risk
 Government Control is Loosening
 Initiatives/Goals are in Place to Increase Access
 Consumer Demand is High & Growing
 Risk of Government Interference and Corruption are
Still High
Project management & IT Education – Low Risk
• Local Teams Lack Professional Skills to Implement
Significant IT Systems
• Application Opportunities and Training Initiatives
Investment Opportunities
Logistics & Import / Export Services –
Medium Risk
• High Volume of Import and Exports…growing
• Good Opportunity for IT Enabled Logistics for
Improved Efficiency
Call Centers – Medium Risk
 Inexpensive Business Venture
 Number of Literate English Speaking Employees
Increasing
 Call Center Ad - Link
Recommendations
While investment opportunities do exist it is recommended
to selectively choose a specific area where the risk is
minimal.
1.
In Terms of Supply & Value Chain, Biggest Market is
Currently Simple Software and Basic Electronic
Components
2.
Vietnam’s Commitment to IT Diffusion will also Create
High Demand for Project Management and Education.
3.
In Short Term would be Cautious of Heavy Investment
into Infrastructure or Facilities in Vietnam Due to
Government Control
Website Examples
Vietnamese Websites
• http://www.vietnamstamp.com.vn/
• http://www.petrolimex.com.vn/
• http://vietnamnet.vn/
• http://english.vietnamnet.vn/ - English.