This report provides an overview of the Vietnamese markets for Information Technology (IT) hardware and software, and highlights best prospects for U.S. suppliers in order to facilitate their market entry and business development strategies.
The IT hardware and software markets of Vietnam are growing robustly, expanding by 13-15 percent per year in the past five years. The strong growth of the Vietnamese IT market is driven by higher IT demand and growing IT outlay from the public sector, private sector and households as the country strives to modernize its economy. This market growth offers good sales opportunities for U.S. suppliers of IT hardware and software. Vietnam has been importing the lion’s share of IT hardware and software to meet its domestic market demand. This trend is expected to continue for many years to come.
The Vietnamese IT market can be segmented into three sectors: hardware, software and services. The IT hardware market encompasses IT equipment and devices, ranging from desktops, laptops, servers to all computer components and peripherals. The IT software market includes a wide variety of software, including office software, operating systems, anti-virus software, Internet software, graphic design software, network and enterprise software. The IT service market comprises personal computer services (rental, repair, maintenance, system consultancy and design) and IT training.
This report focuses on IT hardware and software. As a developing country, Vietnam is investing in technologies to modernize its economy, especially access to, and use of IT. Hence, the market demand for IT hardware and software has been on a steady rise despite the global economic downturn in 2008 and 2009. In particular, the extremely rapid growth of the Internet has contributed significantly to the market demand growth in IT hardware and software. Internet users reached 21.5 million in June 2009, up dramatically from just 40,000 in 1999 and representing an Internet penetration rate of 25 percent.
Increased spending from the public sector, the private sector and households is driving market demand growth in IT hardware and software.
The Government of Vietnam (GVN) is actively promoting the development of the IT market and industry. In 2005, the Vietnamese Prime Minister approved the Strategy for Vietnamese IT development until 2010 with orientation to 2020. This strategy focuses on four major areas: (i) enhancing the application of IT, (ii) developing the local IT industry, (iii) developing information and communications infrastructure, and (iv) developing IT human resources. Of the four areas, IT application is regarded as the most important area and carried out via four avenues: building and developing “e-citizens”, building and developing e-government, building and developing e-business, and developing e-transactions and e-commerce.
In order to boost the applications of IT, the GVN is carrying out several development master plans and projects, which include:
- Plan to apply Information Technology in governmental agencies’ operations in the period of 2009-2010, which was approved by the Vietnamese Prime Minister in March 2009
- Project to modernize the Customs in the period of 2005-2010
- Project to modernize the Tax Administration (Tax Administration Modernization Project-TAMP) in the period of 2008-2013
- Project to develop Internet in rural communities in the period of 2008-2013
To develop its IT industry, the GVN is executing a number of large-scale plans and projects, such as:
- Program to develop the Vietnamese Software Industry until 2010
- Program to develop the Vietnamese Digital Content Industry until 2010
- Plan to develop telecommunication and Internet in Vietnam until 2010
- Plan to develop Information Technology and Communications in Central major economic regions until 2010 with orientation to 2020
- Plan to develop Information Technology and Communications in Southern major economic regions until 2010 with orientation to 2020
- Plan to develop Information Technology and Communications in Northern major economic regions until 2010 with orientation to 2020.
As to the private sector, both local and foreign enterprises operating in Vietnam are investing more money in IT hardware and software in their business operations to become more efficient and competitive.
As for Vietnamese households, they will likely spend more money on buying or upgrading their IT hardware and software to meet their higher IT and communications demands, especially as per capita income continues to rise.
Higher IT demand and growing IT funding availability are expected to generate new sales opportunities for domestic and foreign IT hardware and software suppliers. In particular, foreign suppliers will find a number of sales opportunities for their products. Vietnamese IT hardware and software companies are still relatively new, and may not be able to offer the same range of solutions and technical support as foreign competitors. Imported hardware and software is generally well received due to quality, reputation and sophistication.
By Triet Huynh