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Mon, Nov 27, 2006 - Page 10 News List

More Vietnamese setting up Internet start-ups


With a father in the military and a teaching mother, Nguyen Hoa Binh seemed destined for a career in the public sector. But this 25-year-old from Ha Tay Province, north of Hanoi, chose instead to create his own Internet start-up, PeaceSoft.

The company specializes in e-business, setting up Internet portals for businesses and administrations.

Vietnam this month received the green light to join the WTO and now attracts technology giants such as Intel and Microsoft.

And the country's youth tends to worship Bill Gates as its new idol, rather than Ho Chi Minh, the father of modern Vietnam.

"While most people still prefer a secure and stable life in a big company, there are more and more young Vietnamese people like me," Nguyen said.

"Born after the war, in a Vietnam finally opening its doors, we are fascinated with information and communication technology [ICT] and are ready to take risks and start our own company," he said.

Two thirds of Vietnam's 83 million population are under 30 and "they are Internet-savvy," said Henry Nguyen, managing partner at IDG Venture Vietnam, a US-backed investment fund specializing in the ICT sector.

The number of Internet users has increased from just 500,000 in 2000 to more than 14 million, while the number of mobile phone subscribers has risen from 789,000 to 13.5 million.

This growth is among the strongest in the Asia-Pacific region, according to a study by investment bank Rothschild. And it is far from over.

If the economy keeps growing at between 7 percent and 8 percent a year, Rothschild believes the ICT market could expand at 20 percent.

"The IT sector in Vietnam is still in its early stages, so there are a lot of opportunities for small companies to get started and thrive," said Nguyen Minh Hieu, 26, from Hanoi.

After two years at university in Sydney, this son of a civil servant last April set up DreamViet, a comparative shopping Web site.

Last month, he noted with envy how US giant Intel, along with Texas Pacific Group, invested US$36.5 million in Vietnam's leading ICT company, FPT.

This new breed of entrepreneurs gets its backing from the more adventurous investment funds rather than the traditional banking sector, which is still nervous from decades of bad loans.

"It is nearly impossible for those young people to get a bank loan. They have a job during daytime and work on their project at night," said Henry Nguyen, who gets between 50 and 60 requests for investment monthly.

"There is no secure online payment gateway system," said Nguyen Hoa Binh, whose site ChoDienTu.vn ("electronic market") sells everything from cosmetics to motorbikes.

"So payments are done by cash on delivery, ATM-based bank transfer and, more recently, by text message," he said.

IDG already has 10 companies in its portfolio, including Peace-Soft, DreamViet and VinaGame, which in just a few months has become the market leader in online gaming.

For the moment, these Internet adventurers remain pioneers. The sector suffers from a completely outdated education system and an imperfect legal system.

"You always need a license and then another one," said Phan Cong Thanh, a 29-year-old German of Vietnamese origin and boss of Mobile Solution Services, which sells advertising for cellphones, ringtones and screen savers.

"And the legal framework doesn't always say yes or no, so start-up companies have to just cross their fingers," he said.

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