As one of the fastest-growing economies in Southeast Asia, Vietnam has been making remarkable strides in digital transformation, particularly in the education sector. The remarkable growth witnessed in this domain is a testament to Vietnam’s unwavering dedication to elevating its educational standards and embracing cutting-edge technology. As the country continues its upward trajectory, navigating the challenges ahead, an array of enticing opportunities beckons savvy investors to enter the scene and contribute to the exciting evolution of Vietnam’s education sector.

The dynamic surge in Vietnam’s Edtech investment

Vietnam’s EdTech market has undergone remarkable growth since its inception in 2007. In the past two years, particularly during the Covid-19 pandemic, the demand for online teaching and learning has surged, resulting in a flourishing new EdTech market. This surge has caught the attention of both domestic and international large corporations and startups.

Several factors contribute to the increasing flow of capital into Vietnam’s EdTech market, which is the country’s favorable legal framework for digital transformation, a stable and modern network infrastructure, along with advanced technology and techniques. In addition to that, the significant proportion of the population aged 15 to 24 represents a potential customer base for EdTech solutions, accounting for approximately 15.22% of the population in 2020.  

Despite the rapid growth, Vietnam’s EdTech market is still considered to be in its early stages, with its primary focus on content delivery (pre-recorded lessons and exam banks) and live classes (online classes with teachers, either one-on-one or group format). However, there are untapped opportunities in the OMO segment (online-offline model) and B2B solutions (school or educational institution process management). This indicates that the Vietnamese EdTech market has ample potential for further development, particularly in the areas of digital education platforms and school management systems. As the market continues to evolve, there will be more room for innovative solutions and investments in the digital education landscape in Vietnam. 

What makes Vietnam’s Edtech market attractive to investors?

High Rate of Mobile Device Ownership and Internet Connection

Vietnam’s high rate of mobile device ownership and Internet connection presents a significant market opportunity for enterprises, especially within the Edtech industry. According to Vnetwork, a leading Cybersecurity and Rescue Center in Vietnam, as of January 2023, there were approximately 77.93 million Internet users in the country. This figure reflects a substantial increase of 7.3% compared to the previous year, and it accounts for more than 79.1% of the population.

These statistics highlight the vast potential for online business development, particularly in the Edtech sector. With such a large number of Internet users, there is a considerable audience ready to embrace digital education solutions. The high rate of mobile device ownership further adds to this opportunity, as it enables convenient access to educational content and platforms on-the-go.

For Edtech companies, this presents a fertile ground to offer a wide range of innovative educational products and services to cater to the growing demand for online learning. Whether it’s providing interactive learning platforms, mobile learning apps, or virtual classrooms, the market is ripe for expansion and exploration.

Surging Investment in Education among Vietnamese People

In recent years, Vietnam has emerged as a global leader in education spending, with Vietnamese families showing a remarkable commitment to investing in their children’s education. According to the report e-Conomy SEA 2021 by Bain & Company, on average, Vietnamese families allocate approximately 20% of their disposable income to educate their children, a significantly higher proportion compared to other Southeast Asian nations, where the spending ranges from 6% to 15%. Only Malaysia in Southeast Asia surpasses Vietnam in education spending.

The General Statistics Office reports that annual spending on education has risen by 2.3 times over the past decade, amounting to 7.1 million VND per student in 2020. This expenditure is projected to increase further, reaching 7.3 million VND per student in 2021. The Vietnam’s commitment to education is also evident in its national budget, with the country dedicating 4.9% of its GDP to education during the period of 2011 to 2020, according to the Vietnam National Institute of Educational Sciences. Remarkably, in 2022, the government expenditure on education was reported at 15.45 % of the national budget. 

Compared to neighboring countries like Cambodia, Singapore, and Laos, Vietnam’s education spending as a percentage of GDP stands considerably higher, reflecting the nation’s prioritization of its educational system.

The remarkable emphasis placed by Vietnamese families on investing more in their children’s education creates a promising prospect for investors looking to tap into this thriving market. This heightened commitment to education highlights the significance Vietnamese society attributes to nurturing and developing its human capital. With substantial investments being made in the education sector, Vietnam is poised to cultivate a highly skilled and educated workforce, which, in turn, is expected to fuel the country’s long-term economic growth and development. For investors, this presents a unique opportunity to participate in a burgeoning market with the potential for significant returns and positive societal impact.

Government making E-learning a priority in Vietnam

Recognizing the importance of digital transformation, the Vietnamese Government has identified education as one of the eight priority sectors in its national digital transformation program from 2025 with a vision for 2030. This strategic move emphasizes the significance of leveraging technology to enhance the education system.

To support this vision, in 2021, the Prime Minister issued Decision No. 1373/QD-TTg, providing approval for the project titled “Building a society of learning in the 2021-2030 period.” This project aims to achieve specific milestones, including digitizing 70% of universities and developing digital learning materials by 2025. Additionally, it seeks to implement information technology in the management and organization of educational activities in 70% of community learning centers.

These policy initiatives highlight the government’s commitment to fostering a technologically-driven education sector, promoting online learning platforms, and encouraging investments in the EdTech industry. By embracing digital transformation and innovation, Vietnam is poised to create a more resilient and dynamic education ecosystem that better caters to the evolving needs of students and educators, while also opening up significant opportunities for growth and advancement in the EdTech market.

ICT Infrastructure Improvement

The Vietnamese government’s proactive efforts through the “National Digital Transformation Program through 2025, with vision to 2030” to enhance ICT infrastructure and cater to the growing demand for digital content are set to have a positive impact on the Edtech market in the coming years. By prioritizing ICT development, the government aims to create an enabling environment that fosters the growth of digital education solutions and improves access to educational resources.

In the education sector, this ICT infrastructure improvement is expected to provide a robust foundation for the growth of Edtech solutions. With improved connectivity and access to technology, educational institutions and Edtech companies can offer innovative digital learning platforms, interactive content, and remote learning options. As a result, students and learners across Vietnam will have greater access to quality education, regardless of geographical barriers.

Moreover, as the private sector, including educational stakeholders, adopts advanced ICT solutions, it will further drive the demand for Edtech products and services. This collaborative effort between the government and private sectors will create a conducive environment for Edtech companies to thrive and contribute to the development of the education landscape in Vietnam.

Challenges that remain ahead

Despite the promising growth potential, Vietnam’s Edtech market is not without its challenges. While market research organization Ken Research predicts significant growth, with the market reaching a value of US$3 billion by 2023 and a compound annual growth rate of about 20.2% from 2019 to 2023, experts caution that the Edtech industry presents several obstacles for investors.

One of the main challenges lies in the enduring popularity of traditional classroom learning. Despite the increasing trend of online education, many individuals still prefer the conventional classroom model. Convincing users to transition to digital learning platforms may require substantial effort and time. Furthermore, developing Edtech products is a resource-intensive process, demanding significant time and financial investment. This can create difficulties for startups seeking to generate revenue and profit in the early stages, especially when facing pressure from venture capital funds. Not to mention, the Vietnam Edtech market faces tough competition from established players in the global tech industry. Many countries worldwide have made significant advancements in technology, making it challenging for domestic investors to compete on a global scale.

Thus, to navigate these challenges successfully, investors and domestic Edtech companies need to devise comprehensive strategies to harness the full development potential of Vietnam’s Edtech market. This includes creating breakthrough products that cater to the practical needs of users and focusing on building sustainable revenue models to ensure long-term growth. By offering innovative and user-friendly solutions that address the specific demands of learners, the Edtech industry can cultivate a growing market and deliver substantial returns to investors.

Final Thoughts

Vietnam’s Edtech sector stands as a fertile ground of opportunity for savvy investors seeking to capitalize on the country’s rapid digital transformation and growing demand for online education. Given all the challenges such as the persistence of traditional classroom learning and competition from global tech players, the rewards of investing in Vietnam’s Edtech market are significant. As the government prioritizes ICT infrastructure improvement and places education as a key sector in its national digital transformation program, the landscape for Edtech companies is set to become even more promising.

For investors seeking to seize the opportunities in Vietnam’s Edtech sector, partnering with Viettonkin’s consulting service can be a strategic move towards successful investment endeavors. With our expert guidance and in-depth knowledge of the local market, investors can navigate the challenges effectively and capitalize on the burgeoning Edtech opportunities.

Now is the time for visionary investors to take action and participate in shaping Vietnam’s educational future. Embracing this dynamic and evolving Edtech landscape can not only yield attractive financial returns but also contribute to the nation’s progress in nurturing a highly skilled and tech-savvy workforce.

Unlock the potential of Vietnam’s Edtech market and secure successful investment opportunities by partnering with Viettonkin’s consulting service today. Together, let’s drive innovation, accessibility, and excellence in education while reaping the rewards of strategic investments in this lucrative sector.