Can Asia’s Golden Triangle Displace Silicon Valley?

The people of Vietnam love Apple products. That’s what Vietnamese Prime Minister Pham Minh Chinh told Apple CEO Tim Cook during a visit to the company’s headquarters in Cupertino, California, in May. It turns out this love is requited. Apple suppliers, such as Taiwan’s Pegatron, are planning to expand their investments in Vietnam too. Intel and Samsung are other global titans that have directly invested in Ho Chi Minh City’s Saigon Hi-Tech Park, which is home to 46 tech businesses in all. Nhung Nguyen, marketing and communications manager of Hanoi-based Sun Asterisk, said the foreign investors have played a major role in funding Vietnamese startups: Vietnam attracted investments from 72 nations in the first four months of 2022. The overseas Vietnamese diaspora is emerging as a key source of investments in the country’s tech sector — including the initial investment in Saigon’s $40 million tech park. Meanwhile, funders originally from Silicon Valley are setting up bases in Hanoi and Ho Chi Minh City, Vietnam’s two big urban hubs.

While China and India have been grabbing global headlines, Vietnam has quietly been witnessing a surge in e-commerce, with five of Southeast Asia’s most-visited platforms — Lazada, Sendo, Shopee, Thegioididong and Tiki — operating in the country, including three that only serve Vietnamese consumers. In all, Vietnam’s e-commerce sector is expected to be worth $33 billion by 2025. The sector was already growing by as much as 30% annually even before the pandemic, which further enhanced the appeal of the digital marketplace over the traditional marketplace.

Gaming is also a fast-growing sector: In 2014, Hanoi-based .GEARS developed Flappy Bird, which became one of the most downloaded apps in the world and brought the company $50,000 a day from in-app advertisements and sales before the creator killed it amid concerns that it was too addictive. Unlike young people from many other developed countries that might hope of becoming CEOs of big firms someday, a Vietnamese teenager today is likely to harbor bolder dreams, said Ngan Sau, partner at Vietnam-based ThinkZone Ventures. “I want to become my own boss or establish my own company,” is what Sau predicts the Vietnamese youth might say. “This is what I love about the entrepreneurial spirit of the Vietnamese.”

In Vietnam, 36% of consumers make online purchases via chat — what is known as c-commerce or conversational commerce. Facebook’s leaning into this trend, partnering with Vietnamese company Decision Lab to best understand how to tackle the country’s market. French cosmetics company L'Oréal has also used c-commerce to gain traction throughout Southeast Asia, particularly in Vietnam, where its sales increased by 22%.

Known for the famous Dragon Bridge that’s popular among tourists, Da Nang is an emerging tech hub where the government has poured increasing billions into infrastructure projects. Although Hanoi and Ho Chi Minh City command the lion’s share of foreign direct investment, their increasing land and labor costs are diverting many investors to Da Nang.

Large companies are making big bets on the city. Giants like Mitsui, NTT Data and Cisco operate in Da Nang, which also houses six startup incubators. Spread over an 842-acre campus, a $121 million IT park is the centerpiece of Da Nang’s strategy to challenge Hanoi and Ho Chi Minh City. The signs are promising: Over 2018 and 2019, more than 10,000 new businesses opened in Da Nang.

And Da Nang isn’t slowing down. The city is now proactively seeking potential investors from Japan and India to turbocharge its startup ecosystem. And the city’s University of Science and Technology is providing a steady stream of trained, fresh talent to serve this blossoming sector. According to Nguyen, the Vietnamese government too has established a number of funds at state and provincial level to support startups. “The entrepreneurship and innovation skills of Vietnamese have been improved by taking part in a wide range of national and international contests and campaigns,” he said.

That’s the motto appearing alongside the logo of BSD City, arguably Indonesia’s most ambitious urban planning project. Owned by a subsidiary of the Sinar Mas Group, one of the country’s largest conglomerates, the township was originally largely residential, with gated communities targeted at upper-middle-class Indonesians. But in 2017, it decided to pivot: With a $496 million budget, it’s now aiming for a future as a digital hub with an ecosystem geared to support startups, technology leaders, educational institutions, creative industries players and large multinational companies.

In 2019, Grab, Southeast Asia’s leading superapp, launched its first electric scooter service, GrabWheels, in BSD city. Meanwhile, Sinar Mas Land, the city’s developer, doesn’t want this ride to end: In May, it partnered with venture capital firms to set up a fund dedicated to supporting startups that will use artificial intelligence and data analytics to offer smart tech solutions for the transportation, property and retail sectors.

Others are picking BSD City as their base too. In April, Monash University inaugurated Indonesia’s first foreign university campus, with the township its base of choice. The school will be a part of a broader “ knowledge hub. ” KlikDokter, an Indonesian company that facilitates health agencies to serve the public digitally, moved its head office from Jakarta to BSD City to be “more innovative” with the support of the tech hub.

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Singapore is a place where Asian, European and American influences converge. With major international banks, multinational organizations and financial institutions based in the city state, Singapore has been one of the world’s leading finance capitals. Now it’s increasingly marrying those New York-like credentials with a Silicon Valley vibe: The tiny country boasts the highest per capita venture funding in the world, ahead of Israel, Estonia and the United States. With a deep-rooted innovation culture and strong intellectual property laws, the country also hosts major offices and research centers for global tech firms — from Alibaba and Amazon to Facebook and Google.

A wave of health-tech startups has emerged from Singapore in recent years. Doctor Anywhere allows customers across Malaysia, the Philippines, Singapore, Thailand and Vietnam to consult doctors and get e-prescriptions through a single app. The patient intelligence company, DocDoc, provides an AI-powered search engine to find doctors, as well as options for telemedicine and cashless transactions with health providers. And Aevice Health makes AI-powered wearable stethoscopes that record and analyze lung sounds to detect early signs of chronic respiratory disease.

The city is also home to 38 blockchain-enabled media and entertainment startups. Among them is Marvion, which is a blockchain-based metaverse platform that allows users to make cameos in movies and series, share photos and advertise products. SingSing, another blockchain-based platform, allows music artists to sell non-fungible tokens (NFTs) for their songs.

Do you think any of these emerging tech hubs in Asia could one day genuinely rival Silicon Valley?

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