Vietnam, known as the Land of the Ascending Dragon is fast entering into a new phase of growth. Experts project that the real estate market of Vietnam will achieve a valuation of approximately $ 4.4 trillion in 2024. Vietnam’s economy presents exciting opportunities and 2024 might be the year when Vietnam’s PropTech industry takes the giant leap forward. The PropTech industry in Vietnam has already made significant headway in the marketing and management of real estate, offices, smart homes, retail malls, logistics and leisure properties. Nearly 150 international and domestic PropTech start-ups have launched successful enterprises in real estate Fin-Tech, digital brokerage, and data-driven property management systems. The PropTech market of Vietnam was valued at $ 446.08 million in 2021 and is estimated to grow at a CAGR of 16% in the coming years.
– The real estate market of Vietnam can achieve a valuation of approximately $ 4.4 trillion in 2024.
– Nearly 150 PropTech start-ups have launched successful enterprises in real estate Fin-Tech, digital brokerage, and data-driven property management systems in Vietnam.
– Deep-dive into Vietnam’s Proptech Ecosystem with Mr. Tran Tuan Cuong (CEO, YouHomes)
– The PropTech market of Vietnam was valued at $ 446.08 million in 2021 and is estimated to grow at a CAGR of 16% in the coming years.
– The rising purchasing power of Vietnam’s urban populace and high technology adoption rates are factors contributing to the growth of PropTech.
– Companies like Microsoft and IBM, top investors from the West and Asia and start-up accelerators and networks are steadily increasing their presence in Vietnam.
Rever, a digital brokerage platform launched in 2016 has raised over $ 16.5 million in three phases with the last funding round exceeding $ 10.5 million. In less than five years, Rever boasts of over 50,000 verified property listings across the prominent cities of Vietnam. Rever, like many other Proptech start-ups, caters to the growing tech-savvy population of Vietnam.
APlus Homes is a shining example of what unorthodox thinking paired with technology can achieve. Launched as recently as 2021, APlus Home (part of the Beta group) targets millions of youth looking for affordable rental options in the bustling cities of Vietnam. The idea of co-living introduced by APlus Homes has caught the imagination of the tech-savvy youth of Vietnam. According to the co-founder and CEO of APlus Home, Mr. Dao Quy Phi, APlus Homes broke even just after one year of inception. The company even clinched a $ 2 million investment in Shark Tank Vietnam, the biggest deal since the beginning of the show’s season 6.
The demand for smart homes and fully-furnished rental properties is fuelled by the rising purchasing power of Vietnam’s urban populace. Apart from homes, Vietnam’s industrial and logistics properties have attracted foreign investors looking for profitable assets globally. Vietnam’s luxury properties are also much sought after as Vietnam develops as a major tourist destination. But are these demands for faster and smarter property transactions currently met by the traditional real-estate industry in Vietnam? According to Mr. Tran Tuan Cuong, CEO of YouHomes, the answer is no.
Before launching YouHomes, a full-service platform and big data powerhouse with the largest broker collaboration community in Vietnam, Mr. Tran Tuan Cuong ran a successful traditional broker distribution firm for a decade. In an exclusive interview with PropTechBuzz Media, Mr. Tran emphasized the importance of understanding the finer nuances of Vietnam’s market, economy and most importantly, people. After establishing one of the top broker distribution firms in Vietnam, the idea of disrupting the traditional real estate market with technology catalyzed Mr Tran’s PropTech enterprise.
“One of the first challenges for PropTech was to streamline the obsolete processes of the unorganized broker market”, says Mr. Tran.
PropTech brought along transformations in multiple arenas. The problem of fake property listings was tackled through stricter verification processes and the PropTech ecosystem helped to standardize price fluctuations to a great extent.
Today, customers, brokers, and property sellers enjoy the benefits of technologically advanced brokerage and leasing, better listings and virtual property tours. In his start-up YouHomes, Mr Tran initiated a two-pronged strategy based on scale and efficiency. On one hand, he utilized big data to drive market demand and simultaneously created efficient supply chain management with the help of technology.
Today, apart from improving customer experience and satisfaction, PropTech offerings in Vietnam extend to real-time property management solutions, FinTech-driven investments and financing, and data analytics-powered business intelligence. Hundreds of PropTech firms are engaged in providing these diverse services to a wide demography of customers, brokers, and sellers in Vietnam. But how successful have they been?
In 2022, Propzy, a Softbank-backed major PropTech start-up ceased its operations due to a financial crunch. There were news reports of another 40 – 50 start-ups shutting down in 2023. According to experts, these start-ups wound up as they were unable to tackle the barriers posed by the traditional Vietnam real estate market. The global volatility accompanying the COVID pandemic also cannot be ruled out as a factor behind the shutdown of these start-ups. According to Mr Tran, an important strategy for PropTech firms will be to adapt to the transitioning phase of Vietnam’s economy.
PropTech is at an advantageous position in Vietnam with the country’s digital economy growing at the fastest rate in Southeast Asia. According to a joint report by Alphabet (Google’s parent company), Temasek Holdings (a global investment company owned by the Government of Singapore) and Bain & Company consulting, Vietnam’s digital economy is set to grow 20% per year between 2023 and 2025 reaching a total of $ 45 billion. The rapidly rising digital adoption rate is what makes PropTech in Vietnam an attractive option for foreign and domestic investors.
Vietnam’s growing trust in the PropTech industry is evident in the shifting dynamics of the real estate industry in Vietnam. Big players like the Dat Xanh Group have pioneered PropTech applications like iHouzz to provide comprehensive real estate services across Vietnam—their FinTech platform FINA serves over 20,000 customers and has disbursed loans of over $ 409.3 million. Batdongsan.com.vn, the popular Vietnamese property portal that attracted strategic investments worth $9 million from PropertyGuru (Singapore-based real estate Technology Company) in 2018 continues to inspire trust in the potential of Vietnam’s real estate economy. Batdongsan.com.vn’s recent report on customer sentiment in the real estate market in Vietnam stated that almost 78% of consumers used online channels to gather information on real estate. Vietnam-based PropTech start-up Homebase raised $30 million from global investors like Y Combinator and others in 2021. Houze raised $2 million from DKRA Group, a real estate services company in Vietnam in 2022. Realizing PropTech’s potential to transform the real estate market in Vietnam, companies like Microsoft and IBM, top investors from the West and Asia and start-up accelerators and networks are steadily increasing their presence in the country.
For business innovators and leaders, Vietnam offers exciting opportunities and an environment conducive to PropTech.
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By Proptechbuzz
By Ravi Kumar
