Japanese newspaper reviews Vietnam’s first unicorn firm

Illustrative photo (Source: VNG)

Tokyo - Over the past decade and a half, VNG has diversified into cloud computing, ads, digital payments and media, and built up one of the biggest digital user bases in Vietnam, said an article recently published on the Japanese newspaper Nikkei Asia.

VNG is a gaming startup-turned-tech conglomerate that has become Vietnam's first unicorn.

According to the article, which discussed the firm’s bet on AI and overseas growth, VNG’s Zalo chat app has 62 million users, putting it behind only Facebook and YouTube in terms of popularity in the country, according to We Are Social. This makes it a rare example of a local player that has bested foreign rivals – in the rest of Southeast Asia, the most popular messaging apps are imports, such as Line or WhatsApp.

Zalo boasts 39 functions (when combined with the pay feature) that allow users to do everything from make in-store purchases and buy flight tickets to pay school fees and access government services. The app is also a gateway for numerous brands to connect with customers.

The article cited Vuong Quang Khai, executive vice president at VNG, as saying:

"The next wave is AI. And we should invest."

In December, Zalo AI introduced Kiki for smart speakers, saying it was built on technology similar to Amazon's Alexa and Apple's Siri, but in Vietnamese.

Zalo AI work ranges from facial recognition, used by Viet Capital Bank to verify clients, to Kiki's playlist, which was trained via the massive song library of another VNG business, Zing Music. A service to transcribe audio messages on Zalo chat is also under beta testing.

Meanwhile, Zalo is in talks with a leading dashboard company to unveil Kiki for the mass car market by the third quarter of 2021.

Zalo's reach has helped VNG attract international backers, including two Singapore state funds, Temasek and GIC, Goldman Sachs, and two funds believed to be owned by China's Tencent Holdings, valuing it worth of 2 billion USD, said the article.

Informing that VNG reported 8.3 million in after-tax profit last year, the paper considered the company’s evolvement be in parallel with Vietnam. In 2004, it was Vinagame, a small startup capitalizing on the rise of computer games and internet cafes. Back then Vietnam, which had not yet joined the World Trade Organisation, was known less for trade.

In the interim the company became VNG and added a host of services vital to Vietnam's modern economy - payments, streaming, cloud computing - while the speed, stability and stickers of its chat app won over locals. In the same period, the country signed a bevy of trade deals and its factories moved from shirts and purses to phones and chips.