South Korean startups eye Vietnam takeover

September 14, 2022 | 17:00
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In preparing for digital transformation acceleration in Vietnam, South Korean startups are increasing expansions in the country to tap into growing demands.

Many South Korean startups and investors gathered on August 30 at the Vietnam Korea Startup Entrepreneur Network Meet-Up hosted by The Invention Lab in Hanoi to discuss how to make success in the local market and their future plans here.

South Korean startups eye Vietnam takeover
Recent successful startups range from tutoring platforms to online motorbike stores, Le Toan

David Kim, CEO of The Invention Lab said, “Vietnam is a huge market for startups, especially international ones, including those from South Korea. That market has become tiny with stiffening competition. Therefore, South Korean companies seek huge potential markets.”

The company invests in South Korean startups that want to step into the Vietnamese market and it has invested in 15 companies already. “We welcomed 10 at this event and the others will meet by the end of October to show their programmes in Vietnam,” Kim added.

Not only The Invention Lab, Yaho Lab, an online platform matching children with trustworthy play tutors, is also planning to swell its niche in Vietnam.

“As a startup based in Ho Cho Minh City, we launched in May 2021 and are growing rapidly. After our mobile app launch last month, we are looking to expand to five big cities in Vietnam and then further into Southeast Asia after that,” said founder and CEO Young Wook Kwon. “Vietnam’s tech market is growing rapidly and so we are looking at edtech companies that provide face-to-face services, taking advantage of new technologies.”

Reviewty, meanwhile, is a startup running a cosmetics community and commerce platform targeting female consumers. “Our mission is to improve Vietnamese’s awareness about beauty and healthcare and to become a healthy community where users can share their experiences and concerns,” said Reviewty CEO Jin Kam Park.

“Our next step is to create an e-commerce platform where buyers can experience a seamless shopping process from the step of deciding which product to buy to the final step of making a purchase, as well as creating a channel where brands, sellers, and consumers are all connected,” Park added.

Vietnam has emerged as a promising market for the startup ecosystem. Last year, investment in startups and innovations in Vietnam reached an all-year record high, hitting over $1.3 billion.

In addition, other South Korean startups have been making waves for several years now.

Motorbike sales platform OKXE Vietnam was introduced in 2018 to help connect buyers and sellers of used motorbikes via a smartphone app and a website. According to a representative of OKXE Vietnam, it is now the country’s top second-hand motorcycle trading platform with seven million app users as of June.

Its transaction quantity also saw strong growth from 60 in 2019 to 400 in 2020 and 9,000 last year. For 2022, OKXE Vietnam is aiming for 10 million app downloads and 40,000 total transactions.

Similarly, online sales platform GoMi, which was established in Vietnam in 2019 selling South Korean products, has signed several exclusive sales contracts with South Korean brands to venture afield into Vietnam and then Thailand and India.

Gomi is now Vietnam’s top e-commerce marketplace for South Korean consumer product goods with an average monthly turnover exceeding $371,000.

Elsewhere, Go2Joy started in Vietnam in 2016 and is a mobile online-to-offline commerce platform in Vietnam that connects local hotels and guests. Last year, it received $1.3 million from SV Investment and $2.5 million from other investors, bringing the total series A funding round to $6.1 million.

In 2021, Vietnam ranked 44th out of 132 countries and territories in the Global Innovation Index as announced by the UN’s World Intellectual Property Organisation. Vietnam’s startup ecosystem ranked 59 out of 100 countries, and ranked third by international organisations among the three most dynamic startup ecosystems in Southeast Asia, just behind Indonesia and Singapore.

Hong Sun, vice chairman of the Korea Chamber of Business in Vietnam told VIR, “There has been a trend of investing in Vietnam among South Korean startups after they saw many successful companies in the market. Many newcomers will come to Vietnam in the near future.”

Sun added that the market has become tough in South Korea so startups eye expansions in other countries. “Vietnam’s economy is recovering rapidly, while progress in the EU, the US, Japan, and South Korea is a little slower. Moreover, the internet economy is developing strongly here among young people.”

He elaborated that besides traditional sectors like manufacturing, startups are now eyeing other sectors including banking, finance, and e-commerce.

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