Will Vietnamese companies be sidelined in the AI race?

Applied AI startups and companies in Vietnam are late to the game, but they’re catching up.

The debate between Jack Ma and Elon Musk at the World Artificial Intelligence forum earlier this month set Vietnamese social media abuzz. In a country with a burgeoning tech-savvy population, it’s understandable that AI is being discussed everywhere—in government officials’ speeches that cover their usual Industry 4.0 rhetoric, to companies and corporates proclaiming that their products and services are powered by AI.

The entire Vietnamese tech scene is still evolving, and AI development in the country is still at a very early stage. Local companies and startups are racing to keep up with their foreign counterparts.

“The opportunity is there if we can understand our customers better and harness the data that we have and Google doesn’t,” said Do Van Hai, a speech processing expert at the Viettel Cyberspace Center. He has been leading efforts within Viettel, the country’s largest telecom provider, to apply AI in building speech applications.

Natural language processing for the Vietnamese language

Formally established in 2015, Viettel Cyberspace Center has been tasked with research and development for applications in big data, artificial intelligence, data mining, and deep packet inspection. For now, the center’s AI section particularly focuses on speech processing to improve Viettel customers’ experiences and harness the potential of telecom data owned by the conglomerate.

Viettel’s voice recognition service is considered tip-top in the country. When it comes to processing the Vietnamese language, Hai said, Viettel’s algorithms are more accurate than Google’s. Originally, Hai’s team was set up to analyze data from Viettel’s customer service center, which often receives 500,000 phone calls in a day, as about two-thirds of Vietnam’s population subscribes to Viettel’s services.

Source: Viettel Cyberspace Center.

In the past, content of customers’ phone calls to Viettel were checked by Viettel’s top leaders randomly to develop a better understanding of customers’ complaints. Progress made in speech recognition and data mining over the last few years has allowed Viettel to monitor half a million phone calls from customers—transcribing the conversations if needed—to detect snags.

Globally, virtual assistants have not been able to fully replace call agents. His team, however, saw the potential in transferring voice recognition services to other platforms. Viettel’s applications have been used by several online newspapers for text-to-speech functions, and they were adopted by state agencies to automatically transcribe meeting notes. In the future, other applications could also include virtual announcers and automatic movie voice-overs in Vietnamese.

“Obviously, we still have a lot of work to do to improve the level of accuracy,” Hai said. “But when it comes to the Vietnamese language, we do have some competitive advantages.” He was referring to access to data that is not available in the public domain, as well as preferred access to contracts offered by the state, which will only use domestically developed AI solutions due to national security concerns.

Take your pick

Smaller players have also made fresh developments in this arena. Tuan Trinh founded NextSmarty in 2016. The startup applies AI and deep learning algorithms to build recommendation services, targeting medium enterprises that do not have the resources and data to develop their own algorithms like those of Amazon or Netflix.

In 2017, Tuan co-authored a paper detailing how his solution generates real-time recommendations even if a user does not create a profile, or when a platform doesn’t have enough data that covers the user’s past transactions. Simply put, Tuan developed a method to capitalize on the order of a user’s clicks.

He recalled that the idea first materialized when he was working as a deep learning engineer in Silicon Valley.

“You can always find something on Amazon, but what about a much lesser-known website? You can easily leave after two or three clicks. This is the pain point for many websites that do not have enough data on user interactions in the past and with far fewer loyal customers,” Tuan said.

NextSmarty’s first client was a foreign luxury jewelry e-commerce website, which according to Tuan was struggling to increase sales because conventional AI-powered recommendation approaches did not work. There simply wasn’t enough data that covered user interactions for the AI system to interpret because “most users don’t buy jewelry very often.”

Tuan said NextSmarty’s algorithm helped the jewelry website boost sales by 50% after one month, opening new opportunities for his startup. The company recently received seed funding from investors from the US and South Korea, including 500 Startups, to focus on e-commerce customers in Southeast Asia.

“I think the key here is how we can adapt and leverage AI technologies based on the data that we have to understand user behavior and their intentions,” Tuan said.

Building digital identities

Facial recognition is a hot topic when we discuss AI. In a country where most people still pay in cash and cashless payment methods are only beginning to take off, it isn’t easy to convince consumers to pay using their faces.

But one man is on a mission to build a future in Vietnam where everyone can “pay with their smiles.”

Earlier this month in Hanoi, Vietnam’s An Binh Commercial Joint Stock Bank (ABBank) launched [email protected], giving users the option of utilizing their faces as identifiers for transactions. The man behind this is serial entrepreneur Christian Nguyen, founder of Wee Digital, a buzzing startup in Ho Chi Minh City that aims to transform Vietnamese consumers’ offline experiences using biometric security technology and deep data analytics.

Source: Wee Digital

In March, Wee Digital bagged its first round of institutional funding from VinaCapital Ventures. Raised in France, Nguyen returned to Vietnam more than a decade ago. He said the idea came to him after he had “very bad experiences” with using a foreign bank branch in Vietnam. Through Wee Digital, Nguyen has ambitions to make facial recognition convenient, smooth, and secure enough for consumers so that they won’t need cash, cards, or even e-wallets on their phones for transactions or other offline experiences.

Though it is still an early stage startup, Wee Digital has sealed a deal with Vietnamese conglomerate Vingroup to apply its technology at some Vinpearl resorts, using face scans to give clients access to services at the resorts. Wee Digital is spending time and resources on developing its technology as well as convincing enterprises and institutions to come on board.

The key is to move fast in your own market before foreign providers jump in, Nguyen said during a recent interview with KrASIA in Hanoi. “In order to impact consumers’ lives in perhaps the next three years, you have to start somewhere.”

Still a long road ahead

Even though AI is already making an impact on many industries in Vietnam, most applied AI startups are still at a very early stage of development. According to the 2018 Vietnam AI Landscape Report published by Nexus Frontier Tech initiative RubikAI, 59% of AI companies in Vietnam have been in business for up to two years, and only 34% have raised more than USD 200,000 from external sources. RubikAI’s researchers also found that a shortage in talent is the biggest constraint for Vietnam’s AI ecosystem.

Hajime Hontta, a partner at Hanoi-based G&H Ventures, a fund focusing on early stage AI startups, said Vietnam might have lots of talent in machine learning and data science, but it’s hard to find business talent to push these solutions out to the market.

The government has seized on AI as a frequent talking point, recognizing that it will be a pillar in the fourth industrial revolution. At the Vietnam AI Summit held in August in Hanoi, Deputy Prime Minister Vu Duc Dam said AI is “no longer the story of science but of socioeconomic importance for Vietnam to develop because there’s no other choice.”

That being said, Vietnam currently does not have a top-down AI strategy. The state’s role seems to be limited to “encouraging” its development, leaving actual research and deployment of new solutions to the private sector. Some insiders, however, have warned that this gives unscrupulous individuals and enterprises the chance to use (and abuse) the term “AI” as a branding tool, shifting focus away from the actual technology that can advance the country’s Industry 4.0 ambitions.