Singapore is often referred to as the Silicon Valley of Southeast Asia, as most of the region’s largest startups are based there. This is due to its open business environment, access to investment funds and home to some of the best app developers, designers and marketing experts in the world. This environment helps entrepreneurs to get from idea to execution as quickly as possible. Just pitch an investor, raise the money and let some of the most talented people in the world build and market it.
Singaporeans are also hugely open to trying out new innovative technologies, so it’s easy to get to grips with if the concept is really useful and solves an everyday problem for people. The only problem is that Singapore is just a small island with a small population. Certainly in comparison with countries such as Indonesia, Vietnam and China. So to grow, most startups look to Southeast Asia. Malaysia and Indonesia have always been popular options to expand due to similarities in the 3 countries, but now startups are looking to Vietnam.
Vietnam is expected to become ASEANS fastest growing economies this year despite the effects of the covid-19 pandemic. This means that we can expect a greater number of skilled workers. Especially in areas like IT, where Vietnam is thriving. The salaries of these workers are also much lower than in Singapore, which means that startups would not only find more talent, but also reduce the cost of staff, if done in Vietnam. On the other hand, Vietnam also has a rapidly growing middle class. As the economy improves, more people will have skilled jobs that pay more and will have money to use for products and services. Startups love this and want to take advantage of it by offering products or services that can improve the lives of these consumers.
As of now, Vietnam is one of the major startup hubs in Southeast Asia, trailing just behind Singapore and Indonesia, with just under 4000 startups and 4 unicorns. Business automation, sustainability, smart cities, health and education technology seem to be the areas with the most growth in Vietnam. So any startup in Singapore with an interest in those niches will most likely step into the Vietnamese market. Investors are very open to this as Vietnam currently has extremely high investor confidence with more than USD 3.1 billion in venture capital financing last year.
Singapore is one of the best markets to test out a project, the country is small compared to most others and very efficient. Once saturation is reached, startups can expand into Vietnam, where the population is much larger. More people means more potential customers or users. If the product generates revenue, that means there will now be a lot more paying customers and you will see exponential growth. Vietnam’s economic growth is causing a lot of excitement for companies in the region, so who knows what great innovations we will see in the next ten years.
