Vietnam's large Internet population draws foreign investors

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Leading Internet service companies in the region are buying shares in Vietnamese counterparts to enter what they consider a major, fast-growing market in the region, local reports say.

The Thoi Bao Kinh Te Saigon Online on Tuesday said money has been flowing into the local IT industry through mergers and acquisition (M&A) activities since the beginning of this year.

Hanoi-based PeaceSoft Solution Corporation on April 23 sold half its shares in, one of Vietnam's first electronic pocket and online payment portals, to MOL Access Portal Sdn Berhad, the Malaysian branch of MOL Global, one of Southeast Asia's biggest Internet companies that handles more than 60 million transactions every year with an annual payment volume of over US$300 million.

Ganesh Kumar Bangah, general director of MOL Global, said chances for developing e-commerce and online payment in Vietnam were aplenty, even larger than those for development of mobile devices.

Bangah said Vietnam is not only one of the fastest growing markets, but also one of the biggest Internet markets in Southeast Asia with more than 31 million users.

Hunter Arnold, Asia-Pacific chairman of US online employment giant CareerBuilder, which in February bought out DFJ VinaCapital, the main shareholder of Vietnam Online Network that owns job sites HRVietnam and KiemViec, said that having 33 percent of the population as Internet users gives Vietnam a big advantage in the online recruitment market.

Online jobs company En-japan last month bought 89.8 percent or around 9.98 million shares worth $22.11 million from Navigos Group, Vietnam's leading recruitment company based in Ho Chi Minh City.

Reuters earlier quoted the Japanese company, which has operations in China, Singapore, Hong Kong, Australia, and Korea, as saying that it would acquire the remaining 10.2 percent by March 2016.

In the data processing segment, FPT Software Company in March announced the formation of a joint venture with AGREX, a leading Business Process Outsourcing (BPO) service company in Japan.

The new company, AGREX's first joint venture in Southeast Asia, is expected to start providing BPO services in Vietnam starting this July.

Leading national IT retailer Thegioididong is expecting investments from an Asian investment fund this May, after the Ho Chi Minh City-based Mekong Capital diverted its money from the chain in March.

Chu Tien Dung, chairman of Ho Chi Minh City Computer Association and the city's Quang Trung software park, said investment in Vietnam's IT industry was increasing, especially in Internet content services.

According to the Ministry of Investment and Planning, Vietnam has attracted nearly $4 billion into IT development so far this year via 853 different projects.

Dung said many investors from Japan, Korea, Taiwan and Europe have visited the park, seeking entry into the domestic market.

"Vietnam has many factors that interest the investors, including a complete Internet infrastructure, widespread 3G network, a strong users base, and Internet services at the start of their development," he told Thoi Bao Kinh Te Saigon Online.

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