Recent Study: Vietnam Information Technology Report Q3 2013

We forecast IT spending will increase by 17.6% in 2013 to reach a total value of VND62,082bn (US$2.97bn). This is a slight downgrade from the Q213 update on the basis of a slightly weaker economic environment, however, the macroeconomic environment remains supportive of fast IT market growth over the medium term. Household PC penetration remains low, meaning an opportunity for vendors to record sales growth over the medium term as incomes rise. Meanwhile, a range of government ICT initiatives and a campaign to develop Vietnam's domestic IT industry will also boost growth. In the enterprise market there is strong demand for ERP and security solutions, as well as medium-term opportunities in cloud computing services as telecoms infrastructure improves. Finally, the outsourcing market is also expected to expand rapidly over the medium term as enterprises, particularly in Japan, switch business away from China in search of cost savings.

Full Report Details at
- http://www.fastmr.com/prod/648420_vietnam_information_technology_report_q3_2013.aspx?afid=303

Headline Expenditure Projections:

Computer Hardware Sales: VND44,389bn in 2013 to VND68,935bn in 2017, CAGR of +12.5% in local currency terms. Low PC penetration provides opportunities for sales to first time buyers while the influx of cheap tablets from Android and Windows 8 vendors and notebooks are expected to provide a growth avenue over the medium term.

Software Sales: VND5,610bn in 2013 to VND10,378nn in 2017, CAGR of +17.5% in local currency terms. Potential for strong growth in licensed operating systems, business software and security software - however this outlook depends on the success in bringing down illegal software use.

IT Services Sales: VND12,083bn in 2013 to VND22,812bn in 2017, CAGR of +18.2% in local currency terms. Services will be the outperforming segment of the IT market as demand grows in several verticals, including banking, telecoms, energy and government. Additionally, there is a potential boom in outsourcing from Japanese enterprises to drive outperformance of services segment.

Risk/Reward Ratings: Vietnam scores 41.1 out of 100 in our Asia Risk/Reward Ratings table. This places the country 11th, ahead of Sri Lanka and behind Indonesia and Thailand.

Key Trends & Developments

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