Vietnam builds innovative startup ecosystem crucial for its development

Taking advantage of digital transformation

At a recent conference entitled “Developing the market for e-commerce enterprises in the context of digital transformation”, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said the Covid-19 pandemic and the fast-moving industrial revolution makes digital transformation a vital issue for business development.

According to the deputy minister, digital transformation will help Vietnamese enterprises, especially small and medium-sized firms, identify a more flexible business model, saving costs and optimizing resources. In order to develop the market for e-commerce business in the context of digital transformation, the National Assembly and the Government are considering new legal documents relating to electronic transactions and information technology, similar to Prime Ministerial Decision 645/QD-TTg on the National E-commerce Development Master Plan for the period of 2021-2025, and Project 844 to support a national innovative startup ecosystem.

Nguyen Huy Hoang from Lazada Vietnam said many Vietnamese businesses are not well prepared in terms of a business mindset for digital platforms, making it incumbent on state management agencies to provide appropriate support policies facilitating adaptation to social developments and meeting consumer needs.

Deputy Minister of Science and Technology Tran Van Tung told the gathering that many young businesses are highly interested in e-commerce operations. The Ministry of Science and Technology’s (MoST) Project 844 has also proposed solutions to help develop the market for innovative start-ups, bringing products to the market in Vietnam's innovation startup ecosystem.

Expanding the market for startup products

Given the current strong wave of startups, experts recommend that if innovative startups in the field of consumer goods and food want their products connected to modern retail channels, the goods need to be guaranteed with clear origins and high standards and quality, thereby gradually forming a chain of sustainable production and consumption.

At a seminar on “Connecting innovative startup products to supermarkets and distribution channels”, Deputy Minister of Industry and Trade Do Thang Hai said, connecting supply and demand is an important contribution to the success of the Buy Vietnamese Goods campaign.

For over 10 years, the Ministry of Industry and Trade (MoIT) has sought to mobilize consumers to prioritize Vietnamese goods, investing in production and supplies of high-quality products through domestic and foreign retail distribution channels. So far, the proportion of Vietnamese goods in retail distribution systems accounts for up to 90 percent at domestic supermarkets and over 70 percent at foreign-owned or invested supermarkets.

Deputy Minister Do Thang Hai emphasized that projects in the food sector have contributed to meeting urgent community needs and ensuring an abundant supply for distribution channels. Many startups have successfully brought to the market safe high quality food products, gaining consumer trust and penetrating modern distribution systems such as MM Mega Market, Lotte, Vinmart, and Coopmart. “Joining in the modern retail distribution chain is not easy as small-scale innovation start-ups have not met the basic criteria like legal documents, and quality, packaging or design certifications,” – Deputy Minister Hai said.

Meanwhile, Deputy Minister of Science and Technology Tran Van Tung said that the retail sector in Vietnam is growing strongly with a market size of US$180 billion projected within the next three years. Currently, the MoST is asking the Government and State management agencies to adopt support policies for the startup ecosystem, including young and inexperienced businesses that have little experience of engaging with the market.

MoIT’s Domestic Market Department Deputy Director Le Viet Nga said the ministry in coordination with other relevant ministries has been helping firms bring goods into distribution systems since 2009 when the Buy Vietnamese Goods campaign was launched by the Politburo. The MoIT will continue to promote connection programs, strengthen trade promotion and communication and help Vietnamese enterprises develop markets through retail distribution channels to bring consumers the best products.