Since 2000, the level of payment for education in Vietnam has increased rapidly. In 2020, the results of the population living standard survey conducted by the General Statistics Office showed that, on average, households are spending more than 7 million VND for a member who is attending school, an increase of about 7.0% over 2018.
However, this growth rate is very modest compared to online education. According to Ken Research, Vietnam is among the top 10 fastest growing online education markets globally, with a compound annual growth rate of 44.3%. This market is likely to grow at a rate of about 20.2% during 2019-2023, reaching a 3-billion-USD worth in 2023.
In two years of COVID-19, Vietnam’s educational technology market has burgeoned as the demand for online learning rapidly increased. According to Mr. Pham Giang Linh, Chief Executive of Galaxy Education and General Director of Hocmai – a big name in the e-learning industry of Vietnam, in the past two years, the growth of online education companies may have reached more than 150%.
The rise of edtech in Vietnam is a hopeful sign that the country's workforce will be better equipped for a digitalized and globalized market. Many large corporations and startups are all working to be a part of this growing business.
FPT Corporation, one of Vietnam’s biggest IT service providers, is a big name currently in edtech locally. FPT applies artificial intelligence in its app to tailor the learning experience to each student's individual needs. FPT stated that students learn faster by 30% - 50% on the app than in traditional classes.
There are about 3 million accounts on FPT’s app across 40,000 schools. Its university is also deploying an online learning service for students studying at home.
Local companies are not the only ones making leaps in the edtech industry. Australia, Japan, Canada, and Korea recognized the great potential of edtech in Vietnam and have decided to enhance their entrance into Vietnam’s edtech market.
In late 2021, Japan's Gakken Holdings cooperated with Vietnam’s KiddiHub Education Technology, an information provider for kindergartens. Gakken aims to use KiddiHub's established online presence to promote non-cognitive education for children.
In addition, startups are also driving the edtech boom. EQuest Education Group, which focuses on teaching English and digital education to a globally competitive workforce, received a 100 million USD investment from US private equity firm KKR earlier in 2021.
Previously, online teaching applications and platforms such as CoderSchool, Marathon, Elsa, AI Clevai, etc., have also been invested millions of USD in preparation for a race to attract users.
Vietnam is currently one of the most potential countries in Southeast Asia, with a strong IT workforce and close connections to the world's high-tech economies. With such a young population structure, resources for teachers, books, and equipment will need to meet that great demand. That is a potential space for the edtech market to thrive.
However, a rapidly exploding market equal facing risky consequences. First of all, it cannot be denied that online education in particular and edtech, in general, are developing at a high rate. However, the demand for face-to-face learning is still popular in Vietnam.
Second, the vibrant edtech market means that more startups will be entering and competing at all costs. Companies need to have their strategies to stand out and address the practical needs of users.
Analysts said that it is not easy for edtech investors in Vietnam because starting a business in education is often a long story, and the concept of super growth does not seem to exist in this industry. Investors must prepare for at least 5 years to see the right product-market. However, with venture capital funds, most do not have the patience because the pressure to profit is always heavy.
Vietnam’s edtech industry is at its early stage, still having large room for growth. The field of education, especially the edtech segment, is receiving much attention. There exist opportunities to further advance in one of the most challenging markets in Vietnam.
Source: Nikkei Asia, thanhnien.vn, diendandoanhnghiep.vn
Compiled by VietnamCredit