WHY IS VIETNAM THE NUMBER ONE OFFSHORING DESTINATION FAVORED BY JAPANESE BUSINESSES?
Offshoring is a form of enterprise using resources from another country to serve its business activities, these resources do not necessarily belong to the organizational structure of the enterprise. Today’s Japanese leaders often tend to use offshoring solutions to reduce costs and improve the competitiveness of the products or services they provide. Before deciding to invest in offshoring, choosing the country is absolutely important. The country that Tech Town recommends here is Vietnam, and this article will show the reasons why Vietnam is a top offshore destination.
Vietnam and the “great leap” in the offshoring market
Although India and China have dominated the offshoring market in Asia for a long time, that has gradually changed. Countries in Southeast Asia have joined the game and proven to the world that their solutions are more cost-effective and more consistent in quality.
Covid-19 has completely changed the business landscape, the impact of the pandemic has caused most offshore markets across Southeast Asia to close. Surprisingly, Vietnam has managed to keep the pandemic under control and develop a strong business ecosystem. According to research by Tech JDI – Technology Linkage Development Initiative (Singapore), Vietnam is the most reasonable offshoring destination in terms of technological potential, surpassing both Thailand and Malaysia.
Offshoring in Vietnam is famous for its cheap labor and living costs, the number of IT human resources fluent in English, Japanese and well-trained is increasing day by day. Most of the big technology corporations in the world such as Intel, IBM, Microsoft, Apple have invested in Vietnam or at least have investment plans.
Specifically, here are 3 main advantages that promote many international businesses to offshoring in Vietnam:
Good human resources with affordable cost
According to TopDev statistics published in 2020, Vietnam currently has about 400,000 active IT engineers and more than 50,000 graduates from more than 153 IT training institutions every year. According to the Vietnam Economic Times, Vietnam’s population is also classified as highly educated with a literacy rate of 96% and 80% of university graduates earning a bachelor’s degree.
The field of STEM (Science, Technology, Engineering and Mathematics) education in Vietnam is also highly appreciated, creating highly skilled, flexible and adaptable human resources in difficult markets. harshest.
However, such an abundant IT workforce is not all the country can put on the table. For businesses that care a lot about quality, offshoring companies in Vietnam provide skilled programmers fully capable of meeting world-class standards. Their expertise covers areas from mobile apps, web apps, quality assurance to emerging fields like Big Data, business intelligence, blockchain, AI.
Labor costs in the technology sector in Vietnam are also much lower than in neighboring countries (15% – 50% cheaper than Thailand and Malaysia). The cost of hiring a Vietnamese data engineer or software engineer ranges from $9,600 to $18,000 per year, while this cost in Singapore can be up to $38,000 to $84,500 per year. That is also the factor that makes offshoring Vietnam especially attractive to many startups, small and medium enterprises in Japan.
Stable economic environment
Many Asian countries are currently facing economic difficulties and instability due to various reasons, but Vietnam is one of the rare exceptions. Not only that, the country also achieved strong economic growth thanks to the government’s unconditional support for business activities.
In addition, the government of this country also focuses on orienting and encouraging young talents to start up, creating conditions for young and potential markets to be developed. Startups and small businesses contribute up to 50% of jobs across the country. Vietnam also offers supportive policies, tax incentives and favorable laws, creating an ideal environment for production and business activities.
According to Nikkei newspaper, one of the reasons Japanese businesses are so fond of offshoring Vietnam is due to cost, qualifications, professional working style, proficiency in Japanese and above all, a stable political and economic environment. established for more than 30 years – the foundation for strong development in technology and engineering.
The geographical feature of Southeast Asia is frequent natural disasters, which makes many international businesses hesitant about offshore investment here. However, Vietnam is the least affected country by natural disasters compared to other countries in the region, such as the Philippines.
The climate in Vietnam is also relatively pleasant compared to other ASEAN countries. In southern regions such as Ho Chi Minh City, the weather is warm year-round with average summer temperatures ranging from 25 to 30 degrees Celsius. Because of good geographical conditions, business activities in Vietnam are seldom disrupted and disrupted the economy.
Tech Town – The “core” offshoring partner of Japanese enterprises
Tech Town is a technology company from Ho Chi Minh City – the most dynamic and developed city in Vietnam, a reliable IT offshoring partner of businesses in Japan. Since its establishment, Tech Town has given special priority to Japanese partners, wishing to provide modern and friendly technology products to customers here.
Thanks to our long-term cooperation experience with Japanese partners, we gain the trust of our partners through perfect products, which are always completed earlier or on time as committed, with affordable costs attached. tight support and warranty, even after the product is delivered. Tech Town wishes to create a long-term relationship, contributing to the development of partners according to Win – to – Win criteria.
Tech Town provides business partners in Japan with support from Vietnamese technology experts with high qualifications, long experience, and proficiency in many programming languages such as: Ruby on Rails, Node JS , PHP, Java, Python…, applying modern technology in software development such as: AI, Machine Learning, Blockchain… always dedicated and professional in project implementation, especially flexible working style, Fast, suitable for Japanese businesses.
Outstanding projects that we have successfully implemented for Japanese business partners:
- Blockchain web app development project Revollet International Limited: We build our own Blockchain platform for Revollet with full on-demand transaction features, flexible cryptocurrency (crypto) conversion, electronic wallet integration ( e-wallet), interbank transfer 24/7… Achieved more than satisfaction level from Revollet partner.
- Project to build Rev-EC e-commerce platform with full functions of buying and selling products, online payment, accepting crypto payments, integrating content management system (CSM) and many other functions other customization.
- Website design projects for Quintet, InKrone, Revollet,… and many other partners in Japan, the delivered website products always have a modern interface, good UX/UI efficiency, SEO optimization, integration Combining functions of content management (CSM), business management (CRM)… as required, increasing marketing efficiency, creating a beautiful brand image in the eyes of customers.
- Along with other projects in many fields: Fintech, EdTech, E-Commerce, Gaming, Entertainment,…
With a representative office in Japan, this is a new step to help Tech Town get closer to the software outsourcing market in Japan, to businesses in the digital transformation process, and at the same time promises to bring the to the software services as well as the best support policy for our customers here.
Tech Town is a technology company from Vietnam, specializing in providing technology solutions with the application of the most modern technology techniques such as Blockchain, AI, machine learning… Tech Town is also an application development company. and professional blockchain platform has cooperated with partners from many countries around the world such as the United States, Japan, Netherlands, Canada, New Zealand, and Singapore,… and other developed coutries.
Please contact us if your business has any technological challenges. Contact us if your business has any technological challenges.