36 percent of Vietnam’s population owns a smartphone

Last week it was reported that 36 percent of Vietnam’s population owns a smarpthone. Last year, it was 20 percent. If that strong growth sustains, the country will surpass 50 percent by next year.

Vietnam’s total population is over 93 million people now. 36 percent of that amounts to over 33 million people. At 50 percent, that number will be well over 45 million.

Putting this in perspective with the rest of the region

Let’s look at Vietnam’s new numbers in comparison with the rest of the region. Thailand is at a 49 percent smartphone penetration rate (32 million people), Philippines is at 15 percent (14.7 million people), Malaysia is at 80 percent (23 million people), and Indonesia is at 23 percent (57.5 million people). That indicates Vietnam is the second most populated smartphone market in Southeast Asia just after Indonesia, whose population dwarfs it by over 150 million people. Thailand is especially bullish despite a smaller population, but it’s likely that Thailand’s smartphone numbers will slow as it hits a threshold while the Philippines and Vietnam will continue to increase as smartphones make it into rural areas thanks to ever decreasing prices.

Increased smartphone usage is a great thing for Vietnam

For Vietnam, the usage of mobile is still not sophisticated, despite growing take-up. The majority of smartphone users do not download their own apps. Instead, local smartphone stores preload new phones with apps before selling them to users. Over time, startups like Appota and its competitors have entered the space, producing third-party Android and iOS app stores that users are becoming more accustomed to in place of Google Play and the App Store. But it’s still early. Once Vietnam hits 50 million smartphone users, this will likely be enough critical mass for new companies to build services that the everyday Vietnamese smartphone user wants.

(See: In Vietnam, For Every 100 People There are 145 Mobile Phones)

We’re already seeing inklings of this. The majority of smartphone usage in Vietnam involves watching videos, reading news, and listening to music. But with a larger smartphone base, there’s a larger opportunity for Vietnamese startups to tackle more niche problems that can actually make money at scale. A local startup called Babyme.vn is is aimed at pregnant mothers; Tappy targets local clubs to connect people; mRaoVat is a mobile shopping marketplace for smartphone users – those are three good examples.

So as the market continues to grow, we’re bound to see serious innovation from Vietnamese mobile startups in this space. After all, they’ve got Flappy Bird for inspiration.