South Korean startups are banking on their country’s similarities with Vietnam — a shared popular obsession with education, similar rituals, a history of a divisive civil war, and a current focus on manufacturing and integration with international trade — to give them an advantage in expanding their business there as Vietnam looks to follow in South Korea’s steps to become one of the next Asian tigers.
South Korea is already a big investor in the Southeast Asian nation, however now it is startups in areas like cosmetics and hotel smartphone apps that are joining in on the investment.
“I think Vietnam startup [investment] is really going up now,” Jisoo Kang, chief executive officer of Fluto, a South Korean startup that conducts user testing on digital products, said.
Next conquest
While South Korean behemoths have conquered international television and automobile markets, the next phase of growth is in developing nations such as Vietnam. Its gross domestic product growth rate is 7% annually, compared with South Korea’s growth rate of 2%.
However, the path taken by Korean behemoths could also help startups. A Korean logistics startup called 2Luck said it would look for opportunities to cooperate with companies already in Vietnam’s industrial sector.
“There are many Korean manufacturers here,” Kim Seungyong, chief executive officer of 2Luck, said.
His company aims to increase logistics efficiency by, for example, connecting truck drivers who have delivered cargo with clients for their return trips.
Other startups are looking at commonalities between Vietnam and South Korea; Vietnamese give high ratings for everything from Korean pop music to Korean drama shows, and intermarriage between the two nationalities is common.
Approach to education
One commonality is education. Just as Korean students obsess over tests and spend hours outside of school preparing for them, so too do their Vietnamese counterparts, and Vietnam has the high international test scores to show for it. The KEII Platform, an education company, calls itself South Korea’s first “edtech,” or education technology, business, and its services include teaching math to students via video and having students record themselves doing math on a smartphone app.
“We want to be the No. 1 education platform in Vietnam,” Peter Lee, chief executive officer of the KEII Platform, said in October.
However they have a lot of competition — they are not the first startup to seek opportunity in the market for education services. Vietnamese companies such as Topica, Elsa, and Yola are in the market here already.