– The impact of COVID-1919 on the IT industry is relatively minimal, but the need for quality programming education is expected to increase –
– 19% transition to online communication platform amid COVID-100 situation –
– When advancing into Vietnam, it is important to set the direction for entry according to the local situation and establish a plan through periodic retrospective –
According to the 2020 Vietnam IT Market report, there were 2019 ICT workers in Vietnam in 103, accounting for only 1.9% of the total industrial population. However, the share of total gross domestic product (GDP) is 14.3%, and ICT labor productivity is 7.6 times the Vietnamese average and 18.7 times that of agriculture, forestry and fisheries. Although Vietnam’s IT industry is still led by foreign global companies, attempts and changes to enhance the competitiveness of IT and software development are taking place in Vietnam along with the Vietnamese government’s slogan of cultivating the 4th industrial revolution called ‘Make In Vietnam’. It's happening.
Accordingly, KOTRA Ho Chi Minh Trade Center interviewed Na Seong-young, COO (Chief Operating Officer), co-founder of Likelion, who is making a successful step after entering Vietnam amid the 2020 pandemic. It is hoped that this will be of practical help to Korean companies planning to enter Vietnam in the future.
Q. Please introduce your company.
A. Hello. I am Na Seong-young, co-founder like a stylish lion. He is currently the COO (Chief Operating Officer) and oversees the Vietnam business. Like a stylish lion is a company that has been helping people grow through IT education since 2013. Starting with Seoul National University in 2013, we have been providing programming education to domestic and foreign university students. So far, we have focused on programming education in the domestic market, but in the future, we want to realize our vision on a global level by providing education (programming, design, planning, business, etc.) and community necessary for the IT pandemic in the global market. Starting with the establishment of a Vietnamese corporation in January 2018, we are seeking to expand into the global market and are set to enter the US market in October 2020.
Q. I am curious about how you entered Vietnam.
A. As a startup, I always had the idea of going overseas. As soon as it was converted into this for-profit corporation like a handsome lion and the business structure and organization were established to some extent, we started to turn our vague ideas about overseas expansion into concrete action plans. And I decided to start the first one in Ho Chi Minh, Vietnam. Various articles and research materials such as Vietnam's high education fever, large young population, startup craze, developer supply, and demand imbalance were talking about the need for IT education in Vietnam. Edutech startups like Qanda were showing good results in Vietnam. However, as a small startup, we could not afford to invest valuable time and money based only on examples of other companies and newspaper articles. So, I decided to check if there is a demand for IT education in Vietnam. First, we created promotional content and lecture introduction pages, and then conducted pre-recruitment for lectures through Facebook and Instagram to identify demand. We also carefully reviewed the potential demand we saw online through interviews with local competitors and prospects to determine whether the actual demand was real. As a result, we decided that if we provide high-quality IT education by applying the education method that has been conducted like a fashionable lion in the current Vietnamese market, we can expand beyond major Vietnamese cities such as Ho Chi Minh and Hanoi to neighboring Southeast Asian countries. I decided to dispatch.
Q. What were the practical difficulties in entering Vietnam?
A. Actually, nothing seems to have been easy. It was not easy from the initial setting process, such as establishing a corporation and finding an office. With Korea, the administrative process is complicated, so it is often possible to go beyond the planned schedule, and this has forced us to constantly revise our business plan. In addition, due to Vietnam's special political and economic situation, it was necessary to completely revise the plan that had been made before departure to Vietnam and even detailed action plans at the beginning of the entry. I had a plan to establish and operate a club like a fashionable lion in each university, but I was able to confirm later that the procedure for establishing a club is difficult in reality, unlike in Korea. It would have been nice to have identified the above problem in advance through a more thorough market research, but I had no choice but to face the market and learn that there are many cases where common sense in Korea is not common sense in Vietnam.
Q. What are the characteristics of Vietnamese consumers?
A. Like Korea, in Vietnam, payment using online platforms is also active. However, due to the low card penetration rate, direct cash payment or bank transfer is mainly used. We also use message advertising as our main selling strategy. Vendors utilize Zalo, Facebook messenger to communicate directly with consumers. One peculiar thing was that no matter how well the product description was written, there were many cases where a message was sent immediately without reading it. It is said to be a way to check whether the seller is actually selling the product or just posting an advertisement. Finally, there is 'experience'. Providing a period during which goods or services can be used has a high sales rate. In addition to being able to check what is actually good or not, the experience is free, so many people applied and it was more advantageous to secure a DB for purchase.
Q. What have you accomplished in Vietnam?
A. For the past year and a half, 1) we have been solidifying our position as a credible educational institution, and 1) we have been rapidly expanding our education target by building an online education platform.
LIKE LION VN has established strategic partnerships with 10 educational institutions in Vietnam, such as Baekhwa University, Institute of Technology, Economics University, Insa University, and Environment University, as well as the Entrepreneurship Promotion Agency, and provides education. To date, it has provided programming education and internship programs to more than 500 college students. We are discussing the operation of long-term education programs, such as requesting department-level education rather than just one-time education. Through this, various references were secured as a credible educational institution in the local area.
Also, in a situation where the educational environment is rapidly shifting to online due to COVID-1919, we are launching a programming education platform to respond to the situation and rapidly expand the target of education. Currently, in Vietnam, there is a severe shortage of quality online programming education content compared to demand. Considering customer needs and market conditions, we launched a platform in the form of an MVP (Minimum Viable Product) in March 2021 and currently provide in-depth education programs such as Deep Learning from basic languages such as Python. We plan to rapidly expand in the future through securing additional content and full-scale marketing.
Q. Vietnam is focusing on nurturing IT developers through the 4th industrial revolution. What do you think of the vision of this market?
A. I think the growth potential of this market is clear. The supply of IT developers worldwide is not keeping up with the demand, and the gap between supply and demand is widening as the COVID-1919 pandemic has led to a surge in demand for digital services across society. To bridge the gap between supply and demand, we expect the need for quality programming education to grow. We also see the fact that there are not many companies in Southeast Asia that provide quality programming education as a huge opportunity for us.
Q. What is the biggest change before and after the COVID-19 outbreak?
A. In fact, there is no significant difference because the COVID-1919 situation broke out right after we entered Vietnam. However, from the perspective of the IT education industry as a whole, the fact is that the transition to online education and various attempts to overcome the limitations of online education have become a necessity rather than a choice. I think all IT education players should think together about how to effectively increase the effectiveness of education in an online environment.
Q. What advice would you give to Korean companies that will enter Vietnam?
A. We can't say that we are doing great business in Vietnam yet, but what we've learned in a year and a half is that constant localization efforts are important. Since the start is a Korean company, there is a business model that has worked well in Korea, and the people who lead the team are Koreans, I have made the mistake of continuously looking at the Vietnamese market with the experience and perspective of the Korean market. We recommend that you check whether we are looking for the right answer for the Vietnamese market through periodic retrospective in the process of setting the direction and implementing the plan through intense thinking about how to achieve the company's vision in accordance with the local market. do. We are always trying to do that.
And it does not seem that many IT companies and startups have entered Vietnam yet. Many Korean companies are mostly manufacturing based. This may be my greed, but I hope that many IT companies can advance to Vietnam to share their concerns and collaborate to create synergy. I think that the experience and domain knowledge we have accumulated now can be a good nutrient for Korean startups to advance into the global market.
implication
Globally, the supply of IT developers is not keeping up with demand, and the gap between supply and demand has become wider as the COVID-1919 pandemic has led to a surge in demand for digital services across society. It is noteworthy that while all industries in Vietnam have been hit hard economically during the pandemic, the impact of COVID-1919 on the IT industry has been relatively minimal. In a similar vein, as the pandemic accelerates the “digital economy,” companies that quickly and proactively adapt to these changes are likely to reap economic benefits.
Although the Vietnamese economy has not yet fully reopened, Korean companies seeking to advance into Vietnam will need to set an entry direction that suits local conditions and conduct periodic reviews during the process of executing the plan to meet the demands of the Vietnamese market, as the country has declared an “with COVID-19” strategy.
Source: Comprehensive data from KOTRA Ho Chi Minh Trade Center, including 2020 Vietnam IT Market, company interview, Likelion, etc.