Vietnam’s young invest in ideas blooming in Ho Chi Minh City

Entrepreneur Le Thanh, managing director of ShoeX, at his co-working space in Ho Chi Minh City. (AFP)
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Updated 13 July 2020

Vietnam’s young invest in ideas blooming in Ho Chi Minh City

  • The gold rush comes in spite of cumbersome regulations for foreigners

HO CHI MINH CITY: A tech-savvy population, a fast-growing economy, and the perks of being first in an emerging market — Vietnamese entrepreneur Le Thanh saw the potential in booming Ho Chi Minh City for his startup transforming coffee grounds into masks.

The 35-year-old chemistry graduate worked for two multinationals before stepping out on his own three years ago to launch ShoeX — a sustainable footwear company which nimbly pivoted to masks as the coronavirus pandemic struck. 

When he entered the workforce, Thanh was drawn to the higher salaries and no-nonsense working culture at foreign companies he assumed were a cut above local firms, tangled up in rules imposed by his country’s staid communist rulers.

“But now I see there are more openings in a place where things are a bit murky,” Thanh told AFP from his buzzing Ho Chi Minh City co-working space. He is not alone in believing Vietnam — and especially its southern commercial center — is poised to become an innovation hub thanks to its young, educated and digitally active population.

Vietnamese e-commerce and e-payment companies have been “flooded” with private equity in the past couple of years, said Eddie Thai, a Ho Chi Minh City-based partner at venture capital firm 500 Startups. Their rise has been stellar.

Vietnam-based startups made up 18 percent — or $741 million — of the capital invested in Southeast Asia in 2019, up from four percent in 2018, according to a report by Cento Ventures.

Although Indonesia remains the leader, the amount pumped into Vietnam startups pushed ahead of Singapore for the first time in 2019, the venture capital firm said.

The gold rush comes in spite of cumbersome regulations for foreigners, Thai told AFP, making it difficult to invest and repatriate capital.

Last year, popular e-wallet platform VNPay reportedly snagged the largest deal in Southeast Asia, attracting $300 million from Softbank’s Vision Fund and Singapore’s sovereign wealth fund GIC.

And although Thai said investment had paused due to the coronavirus pandemic, Vietnam is well-placed to bounce back.

Its economy unexpectedly grew in the second quarter and the International Monetary Fund (IMF) predicts a 2.7 percent expansion for the year despite the global downturn.

The country also has a huge pool of software engineers who cost substantially less than their Indian or Chinese peers.

And unlike the tech talent in wealthy startup hubs such as San Francisco or London, they understand what consumers in the emerging world want, Thai says.


Huawei: Smartphone chips running out under US sanctions

Updated 08 August 2020

Huawei: Smartphone chips running out under US sanctions

  • Huawei is at the center of US-Chinese tension over technology and security
  • Washington cut off Huawei’s access to US components and technology last year

BEIJING: Chinese tech giant Huawei is running out of processor chips to make smartphones due to US sanctions and will be forced to stop production of its own most advanced chips, a company executive says, in a sign of growing damage to Huawei’s business from American pressure.
Huawei Technologies, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. The feud has spread to include the popular Chinese-owned video app TikTok and China-based messaging service WeChat.
Washington cut off Huawei’s access to US components and technology including Google’s music and other smartphone services last year. Those penalties were tightened in May when the White House barred vendors worldwide from using US technology to produce components for Huawei.
Production of Kirin chips designed by Huawei’s own engineers will stop Sept. 15 because they are made by contractors that need US manufacturing technology, said Richard Yu, president of the company’s consumer unit. He said Huawei lacks the ability to make its own chips.
“This is a very big loss for us,” Yu said Friday at an industry conference, China Info 100, according to a video recording of his comments posted on multiple websites.
“Unfortunately, in the second round of US sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15,” Yu said. “This year may be the last generation of Huawei Kirin high-end chips.”
More broadly, Huawei’s smartphone production has “no chips and no supply,” Yu said.
Yu said this year’s smartphone sales probably will be lower than 2019’s level of 240 million handsets but gave no details. The company didn’t immediately respond to questions Saturday.
Huawei, founded in 1987 by a former military engineer, denies accusations it might facilitate Chinese spying. Chinese officials accuse Washington of using national security as an excuse to stop a competitor to US tech industries.
Huawei is a leader among emerging Chinese competitors in telecoms, electric cars, renewable energy and other fields in which the ruling Communist Party hopes China can become a global leader.
Huawei has 180,000 employees and one of the world’s biggest research and development budgets at more than $15 billion a year. But, like most global tech brands, it relies on contractors to manufacture its products.
Earlier, Huawei announced its global sales rose 13.1 percent over a year ago to $65 billion in the first half of 2020. Yu said that was due to strong sales of high-end products but gave no details.
Huawei became the world’s top-selling smartphone brand in the three months ending in June, passing rival Samsung for the first time due to strong demand in China, according to Canalys. Sales abroad fell 27 percent from a year earlier.
Washington also is lobbying European and other allies to exclude Huawei from planned next-generation networks as a security risk.
In other US-Chinese clashes, TikTok’s owner, ByteDance, is under White House pressure to sell the video app. That is due to fears its access to personal information about millions of American users might be a security risk.
On Thursday, President Donald Trump announced a ban on unspecified transactions with TikTok and the Chinese owner of WeChat, a popular messaging service.