Japanese IT firms zone in on Vietnam

Many Japanese firms are seeing opportunities in Vietnam’s ICT sector Photo: Le Toan

Japanese-backed information and technology firm SETA International Asia Company is among many Japanese information and technology firms who see opportunities in Vietnam.

“In 2014, our main focus was on the export of Vietnamese manufactured products to Japan. However, in 2015, SETA will target three sectors including website production, security and cloud services, with expected revenue of $1 million. We will also open a branch in the central city of Danang next year,” SETA’s marketing representative Nguyen Huong Giang told VIR.

Earlier this month, Japan’s Econtext Asia Limited announced a subscription agreement with Japan’s SBI Holdings, Inc. and Beenos Inc. to co-invest in FPT Corporation’s Sendo. The three Japanese firms will hold a 33 per cent stake of the domestic firm.

“Vietnam becomes the fourth country in Econtext Asia’s outreach strategy to develop its business in Asia after China, Indonesia and India. In the future, we plan to develop Sendo to become the largest online marketplace in Vietnam and contribute to the growth of e-commerce market by enhancing online payment and related infrastructure and services through Sendo’s SenPay payment system,” said an Econtext Asia statement.

“Many Japanese information and communications technology (ICT) companies are interested in Vietnam. We would like to highlight that Vietnamese ICT engineers are laborious and skillful. That is why Japanese ICT companies select Vietnam as their business partners,” senior economic researcher of the Japanese Embassy to Vietnam Hirotsugu Terado told VIR, while citing the Ministry of Planning and Investment as reporting that there were 117 Japanese ICT projects in Vietnam in 2013, occupying 7.6 per cent of the total Japanese investment in the country, and 58 projects in this year’s first half, accounting for 8.8 per cent of the total Japanese investment in the country.

At the Japan ICT Day 2014 held in Hanoi in late October, 167 Japanese IT firms came to Vietnam in search of investment and business opportunities, including many big firms like NTT, Canon, Panasonic, Toshiba and Sumitomo.

NTT Data Vietnam gained the revenue of $7.5 million in 2013, up 33 per cent on-year. This year it has established its third office in Danang, increasing its workforce to 190 people.

According to the IT Promotion Agency of Japan (IPA), Vietnam has remained Japan’s second largest IT partner since 2012 with 31.5 per cent of Japanese firms preferring partners in Vietnam compared to 20.6 per cent for India and 16.7 per cent for China in a recent IPA survey.

Japan’s Sapporo IT Front recently agreed a deal with the Vietnam Software and IT Services Association to implement a project on developing IT human resources in Vietnam. The Japan International Co-operation Agency also agreed to provide 60 million yen ($510,000) for the project between 2014 and 2016, aiming at providing IT training courses for Vietnamese companies.

According to the Vietnam Software and IT Services Association during the 2012-2013 period the local software revenue increased 52 times to reach nearly $3 billion, while the hardware revenue grew 70.5 times to reach $36.8 billion.

Last year, Ho Chi Minh City was ranked 16th and Hanoi 23rd in the list of the top 100 outsourcing destinations by Tholons, an advisory firm for global outsourcing and investments.