April 20, 2024

Internet of Things in Vietnam: Opportunities and Challenges

Vietnam’s Internet of Things (IoT) market is growing rapidly and revenue is expected to exceed US$13 billion by 2028. In this context, we analyze the opportunities and challenges of foreign investors entering this market in Vietnam.


Internet of Things (IoT) technology covers any Internet-connected device that exchanges data with other hardware devices and responds accordingly.

For example, a home with an autonomous lighting system that can be managed remotely or that uses motion detectors to turn on or off as needed. This technology is becoming big business. In fact, IoT in Vietnam is expected to generate $13.11 billion in revenue, between 2024 and 2028, with a CAGR of 14.83 percent, according to Statista. In 2024 alone, it is expected to reach $7.54 billion.

That said, while there are more than 15 billion IoT-connected devices worldwide, or an average of about two IoT-connected devices per person, in Vietnam that number is less than one per person. However, this just means there is plenty of room to grow.

The IoT landscape in Vietnam

Regulatory support

Decision 36/QĐ-TTg, issued earlier this year, sets out a plan for the infrastructure needed to grow Vietnam’s IoT industry.

Specifically, according to point A, clause 2 of article 1 of the Decision, all high-tech parks, research, development and innovation centers in Vietnam should be able to connect to the Internet with a minimum speed of 1 Gb per second by 2025.

Additionally, Vietnam aims to provide 5G mobile broadband network coverage to 99 percent of the population by 2030.

High-tech zones

In recent years, several high-tech zones have been developed to encourage foreign companies to invest in technological manufacturing in Vietnam.

Hoa Lac High-Tech Park (HLHTP) was one of the first high-tech parks in Vietnam. HLHTP mainly focuses on research and development in four areas: information technology, biotechnology, new materials technology and automation technology.

Another example is the high-tech park in Ho Chi Minh City. This has been one of the most successful technology parks in Vietnam, with more than 12 billion dollars invested.

Foreign ownership in telecommunications

While there are generally limits on foreign investment in telecommunications in Vietnam, in core IoT-related fields such as cloud computing and data center development, there are none. See: Telecommunications Law amended for foreign companies in Vietnam.

Opportunities

Consumer goods

A growing economy, combined with increasing urbanization, has created high demand for IoT products in Vietnam. This includes smart devices and technology, such as home security systems that connect remotely to mobile devices and TVs that connect to home Wi-Fi, allowing users to share content between their home theater systems and devices. mobiles.

Foreign electronics companies may find a lucrative opportunity in the retail sale of IoT-related products, ranging from mobile telecommunications devices to more complicated and responsive monitoring systems.

With several large electronics retail chains and stores spread across the country, IoT device manufacturers can reach Vietnam’s burgeoning consumer market with relative ease.

Education

Vietnam currently lacks experts with deep knowledge of IoT, according to Minh Duc Nguyen, associate professor and doctor at Hanoi University of Science and Technology.

Nguyen says this shortage of highly trained human resources is a result of the lack of training programs in Vietnam that teach IoT development.

Therefore, foreign educators could find a profitable investment opportunity in establishing comprehensive IoT education and training programs. While these programs are already on offer, they are currently limited and there is plenty of room for more.

Challenges

Standardization

Since IoT devices are most effective when connected to other IoT devices, technical standardization is necessary. Fragmentation in the development and deployment of IoT devices can lead to inconsistencies and integration issues. This can reduce performance and make it more expensive to operate.

Security

The proliferation of IoT devices raises cybersecurity concerns. Hacks, for example, can cause significant losses for both consumers and businesses. As a result, investors and companies in this industry should spend a significant amount of time and resources updating their security systems.

Key IoT Companies in Vietnam

FPT Software

FPT Software is part of FPT Vietnam group. It is a software solutions and services provider with a global customer base. The company provides software solutions to several of the world’s largest corporations, including Hitachi, Unilever and Deutsche Bank.

Vietnam Post and Telecommunications Group (VNPT)

VNPT is a company with network infrastructure and mobile service coverage throughout Vietnam. VNPT’s flagship IoT product is VNPT IoT Guard. According to a company spokesperson, this is one of the first commercially used products in Vietnam to protect IoT devices.

Viettel

The Military Industry and Telecommunications Group (Viettel) has the most extensive telecommunications network coverage in Vietnam. Viettel has used this to effectively develop a connectivity management platform (CMP) that improves the connection and data collection capabilities of IoT devices.

Looking to the future

IoT devices are becoming increasingly popular in Vietnam and this has not gone unnoticed. The government is actively promoting investment and development of the industry and several homegrown IoT products have already come to market.

However, it is still a relatively small industry in Vietnam compared to the rest of the world, with plenty of room to grow. With this in mind, foreign companies producing IoT devices and services can find lucrative opportunities in this fast-growing country.

For more information on how to tap into Vietnam’s IoT market, contact the business advisory experts at Dezan Shira and Associates.

About us

Vietnam Briefing is a publication of Information about Asia, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Eurasia, including ASEAN, Porcelain, India, Indonesia, Russia & he Silk Road. For editorial matters please contact us here and to get a free subscription to our products, click here.

Dezan Shira & Associates Provide business intelligence, due diligence, legal, tax and advisory services throughout Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh, as well as throughout China, Southeast Asia, India and Russia. For help with investments in Vietnam, contact us at vietnam@dezshira.com or visit us at www.dezshira.com

Leave a Reply

Your email address will not be published. Required fields are marked *