Speaking at the post-match press conference, he said: "Vietnam did not play 100 percent in this match. They left at least five key players on the bench. The Laos players tried, but Vietnam were more skillful and experienced.
"Nevertheless, we have learned to adapt and carried out some counter-attacks in the second half."
Vietnam dominated with 77 percent of possession, 23 shots (six on target) and goals from Nguyen Cong Phuong and Phan Van Duc.
It was Laos's 10th consecutive defeat against Vietnam in the AFF Cup.
Selvaraj said further: "The quality of their passes was excellent, with proper ball distribution on the two flanks. They really are a strong team and a title contender this year."
He was not too disappointed with losing to the defending champions, and his team would continue to play counter-attacking football, he added.