Vietnam protech, present and futureJuly 18, 2019 / By
“Proptech in Vietnam is developing and expanding on the back of strong momentum in Vietnam real estate market, due to its benefits in improving accuracy and speed, cost savings and convenience”, said Ms. Trang Bui, Head of Markets, JLL Vietnam.
Residential and office sectors embrace proptech the most
In Vietnam, the development of proptech is more prominent in the active market segments of residential and office. These two sectors witness high levels of interest from both developers/investors and buyers/tenants and are served by more than 50% of proptech players in the market. Due to the large market share of proptech in the residential and office sectors, the majority of users in Vietnam only aware of proptech being utilized in these two sectors.
According to Finrei’s list of Vietnam proptech ecosystem, the most notable segments of proptech is related to residential market in listing and marketplaces, tech-enabled brokerage, leasing and renting and property management. The second most active proptech segment is in co-working which is now strongly growing in line with the booming office market in Vietnam.
Increasing number of players in the field
Currently, about 80% of players in the market are foreign start-ups or start-ups funded by foreign investors. However, there are several locally founded proptech companies that are well-known in the market and are growing strongly. Batdongsan.com, a listing website, is the biggest player in the market with about 7 million visitors per month on average, much higher than its competitors.
Besides proptech segments directly serving residential and office sectors, there are those developed to serve related industries such as hotel, property analysis, construction, fund raising, etc. According to Jeriel Tan, Marketing Manager at Technode.com, “These proptech segments do not solely serve consumers in the near term, but given the fast changing natural and built environment, also affect long-term government planning, sustainability and climate change.”
Furthermore, proptech companies in Vietnam have started to collaborate with fintech players. We expect the residential sector, given the level of investment and consumer engagement, to be the first to connect proptech and fintech. For example, property management companies are trying to connect and embed e-wallet into their property management apps in order to improve services and experience for their users. Listing real estate websites have announced collaborations with e-wallet providers for easier collection of service fees from their users. However, as Vietnam is still predominantly a cash economy and credit card penetration is still low, this integration may take some time.
Despite inherent barriers arising from a traditional mindset and the high requirement for trust in the real estate industry, the prospects for proptech in Vietnam are still positive, in our view, due to the young demographics, tech savvy population and available funding and incentives for technological start-ups in Vietnam.
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