Starting up a business has always been the top idea that entrepreneurs strive for. However, as the global economy has been affected by Covid-19, the start-up industry in Vietnam has experienced such a struggling period in 2020.
According to market research conducted by Startup Genome, approximately 74% of startups among 45 countries have been forced to lay off workers due to the effects of the pandemic. Most of them struggle due to the lack of funds and could only maintain businesses for a few months before going bankrupt. Consequently, it is projected that two-thirds of startups worldwide will have to close permanently while millions of businesses will be at risk of temporary closing until the end of the pandemic.
Start-ups ecosystem in Vietnam is no exception to dealing with such a crisis. Although the Vietnamese government has policies to help businesses overcome difficulties, start-ups are reported to deal with difficulty in accessing these support resources. Another remarkable financing sources for business are investment funds or angel investments. However, it is much more difficult for startups to ensure growth potential at the beginning of this year to receive investment from such foreign funds. In addition, the cash flow of venture capital is also decreasing significantly, leading to strict consideration and selection before making investment decisions.
At the same time, there are still opportunities for startups that can adapt and meet the market needs to benefit from the crisis, especially businesses doing IT Consulting Services, Offshore Outsourcing with Offshore Development Center (ODC), telemedicine, online education, online banking, online shopping, e-commerce, games, streaming, etc. As the impact of Covid 19, consumer behavior is changing which generates new trends of online purchasing. For instance, B’s Food, a start-up in Vietnamese cuisine, changed sales strategies from partly to 100% online, expanded the market and exported successfully Vietnamese foods to the Australian market. The main dishes are being diversified and customized, thus receiving positive feedback, especially for fresh spring rolls and Hue noodles.
Vietnamese startups are trying to recover after the COVID-19 pandemic.
All in all, the question of whether Vietnamese startups are remaining their charm or not depends on how adaptive businesses are, especially in managing human resources and finance, which lead to success or failure. Having talents who are open-minded, willing to change and embrace challenges will positively contribute to the sustainable growth of start-ups in the latter half of this year.
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