Connect with us


Gaming startup VNG aims to launch Vietnam’s answer to ChatGPT

Vietnam’s VNG plans to roll out a ChatGPT-like artificial intelligence service tailored for speakers of Vietnamese as the gaming company searches for a new cash cow.



The tech unicorn, backed by Tencent and Alibaba’s Ant Group, already has a chat app that is more popular in its home market than Facebook and recently expanded it with a translation function. VNG said it next will add a generative AI feature, which could allow users to do everything from writing emails to finding answers to queries.

Locals flocked to ChatGPT earlier this year but said the chatbot’s replies in Vietnamese were less accurate than those in English, leaving room for a domestic challenger in the fast-growing market of 100 million.

In August, VNG filed for an initial public offering on Nasdaq — the venue for Vietnamese EV maker VinFast’s IPO the same month — but then shelved the debut amid “challenging” stock market conditions. An overseas listing would put Vietnam’s strict capital controls to the test.

“I want the world to clearly see there’s a company that deserves the title of ‘global technology company’ that is based in Vietnam,” VNG founder and CEO Le Hong Minh told Nikkei Asia. “The strength of VNG is we’re both romantic and practical at the same time.”

He would not comment on the IPO timeline.

VNG said in the August filing with the U.S. Securities and Exchange Commission it was building a Vietnamese large language model for “content creation, language translation and chatbots.”

Analysts, however, say digital censorship — an ongoing issue in Vietnam — creates a hurdle for large language models, which are trained on mountains of text data.

Founded in 2004, VNG has grown from a video game publisher to a group spanning 34 subsidiaries, with businesses including fintech, data centers, the Zing music service and Zalo, a messaging app with 75 million users.

Beyond creating a ChatGPT rival, the company has an array of other uses for AI: powering an Alexa-like voice assistant, generating visuals and sound in games, and reading face scans for entry to its Ho Chi Minh City campus.

“We try to incorporate AI into all our products, whether it’s games or Zalo or payments or cloud,” Executive Vice President Vuong Quang Khai, who has led VNG’s move into AI, told Nikkei.

Minh said new regions are challenging the decades of U.S. dominance in the tech industry, describing it as a “natural evolution” that there would be “a lot of companies coming out of different countries.” A prime example, he said, is the diversity in semiconductor chips, a sector with giants in Taiwan, South Korea and China, as well as the Netherlands and the U.K.

He is among the executives who are trying to push Vietnam into the tech leagues and past its image as a postwar communist country.

For VNG, that requires long-term strategies, especially as the areas where it faces the fiercest rivals are two of its newer businesses: data centers and developing its own games instead of licensing content from others.

The company has not found a profit driver to cut its external reliance on games, which bring in 80% of its revenue. Game royalties are one of its biggest expenses, costing 784 billion dong ($32 million) in the first six months of the year, slightly more than it spent on salaries. Besides increasing the games it creates in-house and sells abroad, the startup will try more “cross-selling,” such as converting players into ZaloPay wallet users when they make in-app purchases.

ZaloPay, meanwhile, is a loss leader that gives users perks for making purchases in a push to gain market share against Momo, GrabPay and other apps that have “greater financial resources than we do and are able to incentivize users,” its SEC filing said.

The company reported a loss of 650 billion dong in the first half of 2023, versus a loss of 390 billion dong a year earlier.

Its filing also said its corporate structure is “unprecedented and has not been tested in any court.” It plans to list its Caymans-registered holding company, which has a stake in VNG Corp. of 49% — Vietnam’s limit on foreign ownership — plus a 21% indirect interest.

Temasek’s Seletar, GIC, Tencent and Ant Group are slated to receive shares once VNG goes public.

“Foreign investment restrictions are always a concern, as well as outbound investment requirements,” so “a myriad of structures have proliferated,” Nu Thi To Nguyen, an associate at the law firm Tilleke & Gibbins, told Nikkei.

VNG used to have one of the most-read outlets, Zing News, which Vietnam suspended in July with little explanation. The one-party state is among the world’s most restrictive environments for news media and social media, often demanding organizations in both sectors block unfavorable content.

“Any country is going to have regulations to make sure that the online content is safe,” Minh said when asked about such policy risks.

“VNG Cloud may benefit from a ‘home court’ advantage” because Hanoi requires data to be stored on “servers located within Vietnam,” the SEC filing said.

But it warned, too, that the internet company will need state consent to transfer data abroad, user consent for advertising, and other steps under local privacy laws that may “negatively” affect the business.

In Vietnam, 90% of those online use Zalo, compared with 77% for TikTok and Facebook Messenger, according to DataReportal. It said the Southeast Asian country had 78 million people online as of January.

Source: Nikkei Asia



Digital capabilities have no shortcuts

Even though they are only ranked average in terms of digital capabilities, most Vietnamese people are optimistic about the future of technology.



“The two areas we are most concerned about are online safety and digital content creation. Because they have the lowest scores in the 5 survey areas”, Associate Professor Nguyen Quang Trung, Head of the Smart Transformation Management Research Group at RMIT University, commented on the results of the survey digital capacity research. in Vietnam was conducted recently by his team. “Safety is always important in many fields. In cyberspace, it is even more important,” Mr. Trung analyzed. “At this time, according to our survey, safety in the online environment for people in Vietnam is still quite low,” he added.

Sharing the same opinion, Mr. Hoang Quang Huy, Director of Palo Alto Networks Vietnam (PAWN), commented: “In Vietnam, the rate of internet users is high, which means the possibility of them being exposed to cyber risks is also high. much”.
Improve digital capabilities
Big data, machine learning, artificial intelligence (A.I)… all of these technologies use data, which is considered a new gold mine for economic growth. However, survey results on digital content creation show that Vietnamese people are still weak in creating data. “Therefore, we need to know how to create and exploit data better,” Mr. Trung emphasized.
Also according to this research result, overall, people’s level of digital proficiency is average. On some other rankings, Vietnam’s digital skills ranked relatively low. In 2022, Vietnam will rank 82/133 countries according to the World Economic Forum’s (WEF) Global Competitiveness Index and only 11% of the domestic workforce has high skills, according to Report of the Ministry of Labor, War Invalids and Social Affairs.

To improve digital capabilities, according to Mr. Trung, there will be no shortcuts. “In the past, we often said we had to take shortcuts in many areas. But in reality, for digital skills, especially with experience from countries that are successful in developing digital skills, we think there will be no shortcuts. Instead, we must build a methodical strategy and organize good management and implementation,” he said.

From the model of four countries that have succeeded in developing digital capabilities for their people such as Singapore, South Korea, Estonia and Finland, his team offers a solution group of 6 main points. The first step is to start with education programmes, followed by government and government digital initiatives, followed by an inclusive strategy to leave no one behind, all the way to increased collaboration. public-private, then building a culture of lifelong learning and finally promoting innovation and flexibility. These are the solutions mentioned in the report and are also a long journey that requires careful planning.
The global digital economy is expected to reach 20,800 billion USD by 2025. The outstanding growth of the domestic and world digital economy motivates the Vietnamese Government to set ambitious goals for the future. By 2030, the Government aims for the digital economy to contribute 30% to GDP, e-commerce to account for more than 20% of total retail sales and 100% of businesses to apply electronic contract platforms. In addition, the proportion of digital workers in the workforce will exceed 3%.

Challenge and opportunity
According to RMIT, digital capabilities not only promote business growth but also create many other economic opportunities, including overcoming inherent weaknesses of the Vietnamese economy such as low productivity and a large number of workers. seasonal unemployment in the agricultural sector. Strong digital capabilities also help individuals and businesses have the ability to run online marketing, conduct e-commerce, analyze data, interact with customers and deploy new business models. .
It is estimated that Vietnam currently has about 14 million people in the rural agricultural sector recorded as having jobs, but many of them are seasonally unemployed (only work seasonally). This is also one of the reasons why labor productivity in Vietnam is still very low,” Mr. Trung said. The number of workers in the agricultural sector alone is more than double the population of Singapore. Therefore, if there is a systematic training program to improve, develop and enhance digital capabilities, this force will create more wealth and labor productivity will increase significantly.

Currently, Vietnam is still in the golden population structure, but the population will age extremely quickly in the next 1-2 decades. Therefore, the challenge for Vietnam in the coming time will be huge if the current period is not well taken advantage of. Even the digital gap still exists between regions, between ages in the population and between ethnicities, especially ethnic minorities.
However, a report on PwC’s digital readiness shows a more optimistic outlook on the future of digitalization in Vietnam. Nearly all (89%) respondents feel positively about the impact of technology on their work, higher than the 61% of the global survey. A similar proportion think technological advances will help improve future job prospects, which are believed to change in the next 6-10 years.

Mr. Le Minh Tuan, Deputy General Director of Transaction Advisory Services at PwC Vietnam, commented: “I think optimism is a good thing we have.” That number shows that people care about technology and see it as important for themselves, and he thinks businesses do too. To accelerate on this positive psychological foundation, Mr. Tuan proposed that businesses should open a runway for those who are ready to develop themselves.
Businesses will tend to defend against risks. So the challenge lies in overcoming defenses to create runway for the next 5-10 years. “This is not easy but it is what we should do,” the Deputy General Director of PwC emphasized.


Continue Reading


High-quality manpower could level up semiconductor development

Vietnam is in need of high-quality engineers for the semiconductor industry, which holds great potential to create a breakthrough for sustainable economic development.



According to market research company Technavioa, the semiconductors market in Vietnam is estimated to grow at a compound annual growth rate of 6.5% between 2021-2025. 

Technavio’s report pointed out that the growing consumption demand is driving market growth. To meet the growing demand for hi-tech and smart equipment using semiconductors, manufacturers in the region will open more factories in the country, resulting in surging demand for manpower. 

However, the lack of skilled labour in Vietnam is a major challenge impeding market growth, according to the report.

Assoc.Prof.Dr Nguyen Van Quy from the International Training Institute for Materials Science under the Hanoi University of Science and Technology said that many international reports showed Vietnam is short of high-quality engineers capable of holding key roles in semiconductor design and manufacturing.

Tech giants such as Samsung and LG said they are willing to recruit hundreds of design and manufacturing engineers every year, he stressed, adding a shortage of skilled workers will affect investors’ plan to expand production in Vietnam.

Minister of Information and Communications Nguyen Manh Hung said that each year, the country needs about 150,000 engineers for the information technology and digital sectors, but only 40 – 50% of the demand has been met. Notably, the semiconductor industry needs some 5,000 – 10,000 engineers each year, but just 20% can be met. 

The big manpower shortage, over 80%, is a major problem needing to be addressed as more than 50 FDI businesses have invested in this industry in Vietnam and they are in need of a large number of personnel.

Experts forecast the semiconductor industry in Vietnam will require about 20,000 personnel holding the bachelor’s or higher degrees in the next five years and about 50,000 engineers in the next 10 years.

FPT Chairman Truong Gia Binh suggested the Government invest in training 30,000-50,000 semiconductor experts to meet the industry’s increasing demand, adding that FPT University wants to receive investment to train semiconductor design and AI engineers to improve the capacity of the workforce in this important sector.

Nguyen Thanh Yen, administrator of the Vietnam Semiconductor Community Group, said that Vietnam should channel investment in human resources training, and the result would be seen in the number of newly established semiconductor firms and the number of students getting jobs in the field every year.

Assoc. Prof. and Dr. Hoang Minh Son, Deputy Minister of Education and Training, said though the semiconductor area is not a new training branch, the number of students and graduates remains very low, leading to a manpower shortage in terms of both quantity and quality.

Facing that fact, the Ministry of Education and Training is building an action plan to step up training to increase the quantity and quality of human resources, particularly integrated circuit (IC) designers, for the sector.

Vietnam has more than 5,570 IC engineers at present, over 85% of whom are in Ho Chi Minh City, 8% in Hanoi and 7% in central Da Nang city. Every year, only about 500 – 600 students graduate from semiconductor training courses of domestic universities, according to data from the National Science and Technology Information Portal.

To quickly raise the number of semiconductor engineers, Son suggested training students who are enrolling in close branches such as electronics engineering, electrical engineering, automation, and mechatronics engineering into those specialised in semiconductor engineering in order to increase the graduates in this field to 3,000 – 4,000 each year.

In addition, many electronics and telecommunications graduates have experience in working for IC and semiconductor-related companies. If receiving more specialised training, they can become a source of high-quality manpower for the industry, he said.

The Deputy Minister also considered re-training the engineers of close majors as a measure for quickly increasing new semiconductor personnel to 5,000 – 6,000 each year.

In 2024, Vietnamese universities will take in 1,000 students and provide them with comprehensive training in integrated circuit design.

Source: Vietnamplus


Continue Reading


Vietnam’s mobile money trial program to be extended till 2024

Mobile phone accounts can now be used to pay for low-value goods and services until the end of next year.



Authorities told the State Bank of Vietnam to review and report to higher ups before May 2024 the release of legal papers related to Mobile Money services. 

They were to work with the Ministry of Information and Communications, the Ministry of Public Security, the Ministry of Justice, and other relevant agencies.

To make the government work better, Deputy Prime Minister Le Minh Khai asked these ministries and other related groups to take steps to make sure that the pilot use of the service follows the rules that are already in place.

The head of the Vietnamese government had earlier said that the Mobile Money service could be tested across the whole country for two years, starting on March 9, 2021.

Customers of this service can use their cell phone accounts to do a variety of things, like pay for low-value goods and services, send money, top up their phones, withdraw money, and more, all without a bank account, a smartphone, or an Internet link.

According to statistics from the Ministry of Information and Communications, more than 3.9 million people used Mobile Money in the first five months of the year. This is three times as many as used the service during the same time last year.


Continue Reading