CREATING A ROBUST CROWDFUNDING ECOSYSTEM IN VIETNAM (The factors influencing the crowdfunding ecosystem in Vietnam)

ABSTRACT
For the last decade, crowdfunding has been a new concept that has been receiving attention in academic research and gaining ever wider use in practice. Even though crowdfunding is in its infancy, it is not only popular in developed countries but also becoming a global phenomenon. Crowdfunding has just reached Vietnam within the last few years, thus is still a relatively new concept for the country. However, crowdfunding is showing growth and is emerging as a new trend.

This research was set out to understand this phenomenon deeper, analyze factors that affect crowdfunding in Vietnam, and develop strategic recommendations for the government, NGOs, and the private sector to deal with the challenges.

A literature review was conducted to deepen knowledge of crowdfunding, specifically to find the elements of a crowdfunding ecosystem. In the empirical research, qualitative method was employed. Primary data came from semi-structured interviews with crowdfunding platforms representatives in Vietnam.

The findings of the research reveal that there are several factors that affect crowdfunding ecosystem in Vietnam, which can be broadly grouped into four categories: cultural, social, technology, and regulatory. The most important factors required for crowdfunding to exist are broadly present in Vietnam. However, to make crowdfunding succeed, a culture of trust should be fostered not only in crowdfunding activities but also in entrepreneurial activities and online payment activities. Therefore, a list of recommendations was developed to create a robust crowdfunding ecosystem in Vietnam.

KEYWORDS:
Crowdfunding, entrepreneurship, entrepreneurship ecosystem, crowdfunding ecosystem, financing, fundraising


TABLE OF CONTENTS

LIST OF ABBREVIATIONS

1 INTRODUCTION
1.1 Research background
1.2 Research motivation and Research objectives
1.3 Research questions

2 LITERATURE REVIEW
2.1 Definition of crowdfunding
2.2 How crowdfunding works
2.3 Types of crowdfunding
            2.3.1 Donation-based crowdfunding
            2.3.2 Reward-based crowdfunding
            2.3.3 Lending-based crowdfunding
            2.3.4 Equity-based crowdfunding
2.4 Benefits of crowdfunding in developing countries
2.5 Crowdfunding ecosystems
            2.5.1 Definition of ecosystem
            2.5.2 Crowdfunding ecosystem elements

3 VIETNAM: COUNTRY’S PROFILE
3.1 Vietnam at a glance
3.2 Crowdfunding platforms in Vietnam
            3.2.1 Donation-based crowdfunding platform(s)
            3.2.2 Reward-based crowdfunding platform(s)
            3.2.3 Lending-based crowdfunding platform(s)
            3.2.4 Equity-based crowdfunding platform(s)

4 RESEARCH METHODOLOGY
4.1 Research Philosophy
4.2 Research Methodology
4.3 Data collection
4.4 Research reliability, validity, and limitations

5 FACTORS AFFECT CROWDFUNDING IN VIETNAM
5.1 Cultural
5.2 Social
5.3 Technological
5.4 Regulatory

6 RECOMMENDATIONS TO CREATE A ROBUST CROWDFUNDING ECOSYSTEM IN VIETNAM
6.1 Cultural
6.2 Social
6.3 Technological
6.4 Regulatory

7 CONCLUSION
7.1 Conclusion
7.2 Suggestions for future research

8 REFERENCES


1 INTRODUCTION

1.1 Research background

Today more than three billion people are using the Internet thus gaining access to information and communication technologies, according to a report from the International Telecommunication Union – a United Nation’s Agency (ITU, 2016a). Thanks to this widespread adoption of information and communication technologies and the rapid rise of online social interaction, people now have more chances to interact, build trust and collect funds from the crowd, which is called “crowdfunding”. For the last decade, crowdfunding has been a new concept that has been receiving attention in academic research and gaining ever wider use in practice. Even though crowdfunding is in its infancy, it is not only popular in developed countries but also becoming a global phenomenon.

Many researchers such as infoDev (2013), Antonenko, Lee & Kleinheksel (2014) and Pekmezovic & Walker (2016) agree that crowdfunding was a societal response to the 2008 financial crisis and stricter business loan regulations. Since then, crowdfunding has attracted individuals and organizations (especially NGOs, SMEs and start-ups) to create public campaigns to fund their projects, whether for charity causes or for-profit ideas (infoDev, 2013).

Crowdfunding has been receiving great attention from the developed Western world and now spreading to emerging markets too. According to a World Bank report on crowdfunding, entitled “Crowdfunding’s Potential for the Developing World” ( (infoDev, 2013, p. 10), approximately 344 million households in developing countries can pool their money and have the ability to contribute up to US$ 96 billion a year by 2025 to invest in community businesses. Considering the amount, the developing world has a significant potential to facilitate crowdfunding.


Crowdfunding has just reached Vietnam within the last few years, thus is still a relatively new concept for the country. Even though yet crowdfunding is not as common as in many Western countries, it is showing growth and is emerging as a new trend in Vietnam. (DealStreetAsia, 2015; Fintechnews Singapore, 2016b). As yet, there has not been any study regarding crowdfunding in Vietnam.


1.2 Research motivation and Research objectives
On April 25th 2015, a violent 7.8-magnitude earthquake struck Nepal, killing around 8,969 people and destroyed around 602,592 houses and buildings (USAID, 2015). One of them was the author’s friends’ school. The author raised a donation-based crowdfunding and collected money from friends from all over the world, especially from her network in Vietnam. The success of the campaign fascinated the author greatly with the concept of crowdfunding and encouraged the author to understand this phenomenon deeper and analyse its potential in a developing nation context: Vietnam. The motivation behind this thesis is to understand the concept of crowdfunding, how crowdfund investment works, the potential of crowdfunding in Vietnamese start-up ecosystem, what facilitate and restrict crowdfunding in Vietnam, and solutions to overcome challenges. The situation describes in section 1.1 led the author to explore the potential of crowdfunding in Vietnam and how to enable a robust ecosystem. These are also the main objectives of this research paper.


1.3 Research questions

Considering the objectives, these problems will be addressed by answering following main and sub-research questions. The main question is: “How to facilitate crowdfunding in Vietnam”. This research will concentrate on the ecosystem in Vietnam as a whole so the main question is broken down to these two sub-questions...

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Item Type: Project Material  |  Attribute: 62 pages  |  Chapters: 1-5
Format: MS Word  |  Price: N3,000  |  Delivery: Within 30Mins.
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