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Tag: Vietnam

  • Airlines want minimum fares, no one else does

    Airlines want minimum fares, no one else does

    While economists fear having lower limits for airfares will distort competition, some airlines worry safety is at stake.

    If fares do not makeup even the fuel costs of a flight, aviation safety would be affected, Dang Ngoc Hoa, chairman of Vietnam Airlines, said at a meeting held on Monday to get feedback from economists on proposed minimum fares.

    The Civil Aviation Administration of Vietnam (CAAV) has proposed minimum fares of VND320,000-VND750,000 ($14.06 – $32.95) for domestic flights between November 1 and October 31 next year to help airlines overcome the difficulties caused by the Covid-19 pandemic.

    Too low prices would weaken all airlines, Hoa said. Many countries like China and India have floor prices for air tickets, he pointed out.

    He said amid the pandemic fares are very low at just 40 percent of those in 2018-19, and 250 airplanes are parked in airports, some of which are running out of parking space.

    But despite the low fares, airlines have to keep operating to maintain parking space, minimum cash flows and planes, he said.

    During the first Covid outbreak in March 2020, there were three flights a day in total, while during the fourth wave starting in April 2021, especially July-August, “there were no flights”, he said.

    All carriers have been hit and most airlines are facing losses, he said.

    Vietnam Airlines made a loss of VND7 trillion ($301.7 million) in the first half of the year, while private airlines reported losses of a trillion dong, he added. But despite his impassioned argument, economists at the meeting said minimum fares are not acceptable.

    Can Van Luc, chief economist of BIDV, said floor prices could cause confusion and be unfair to both state-owned and private enterprises, and even violate the Law on Prices and the Law on Enterprises.

    Nguyen Sy Dung, former deputy head of the Office of the National Assembly, said: “it is unfair to impose a floor price on air tickets”. If minimum fares are applied, a three-star airline must sell at the same price as a five-star airline, and no customer would spend money to travel in the former, he pointed out.

    “We might kill an airline through price policy. It’s unacceptable”.

    In a recent communication to the Ministry of Transport, three airlines agreed to apply floor prices airfares while two others disagreed.

    The Department of Transport admitted that since costs and services are not comparable, it would be difficult to determine common minimum fares applicable to all airlines.

  • Hotels become quarantine facilities to survive Covid

    Hotels become quarantine facilities to survive Covid

    Some 10 percent of hotels in big cities are used exclusively for quarantining Covid-19 patients and those who were in close contact with patients, according to Savills.

    They include 25 in HCMC with more than 3,000 rooms, mostly in Districts 1 and Tan Binh, 20 with 1,600 rooms in Hanoi and 34 with 3,000 rooms in Da Nang.

    The fourth wave of the Covid pandemic led to the lowest occupancy rates in a decade and a drop in room rents.

    Average occupancy rates at 3-5-star hotels in Hanoi regularly topped 74 percent in the decade before the pandemic.

    In 2020, it fell to 30 percent, and the average room rent to $81 from $113.

    In the first half of this year, they declined further to 25 percent and $72.

    In HCMC, the rate this year has been only 18 percent due to stringent social distancing regulations, and the rent fell to $69.

    The switch as medical isolation areas has thrown all of them a lifeline.

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  • Vietnam’s carmaker VinFast eyes more countries for its European strategy

    Vietnam’s carmaker VinFast eyes more countries for its European strategy

    Vietnamese carmaker VinFast could add other markets in 2023 to expand its European strategy beyond a planned debut in Germany, France and the Netherlands next year.

    The company, a unit of Vingroup Jsc, Vietnam’s largest conglomerate which some have called “Vietnam’s answer to Tesla,” will debut in Europe next year with two battery-electric SUVs models, the midsized VF e35 and the seven-seater VF e36, both designed by Italy’s Pininfarina.

    The two models launch in Vietnam, North America and Europe around mid-2022, after an unveiling planned later this year.

    VinFast became Vietnam’s first fully-fledged domestic car manufacturer when its first gasoline-powered models built under its own badge hit the streets in 2019.

    VinFast’s B2B Sales Vice President Emiel Hendriksen said on Thursday it was also looking at Italy, Scandinavia, Switzerland and Austria for a second step in its European strategy.

    “We’re considering those countries for 2023,” he said during a presentation at Pininfarina headquarters in Turin.

    VinFast will initially rely on a direct distribution model in Germany, France and the Netherlands, based on property showrooms, but could later consider an agency model for sales in other countries, Hendriksen said.

    The company sold about 30,000 vehicles domestically last year and had set a target of selling 15,000 electric vehicles in 2022, although its representatives did not provide detailed forecasts for the European market on Thursday.

    Earlier this year sources said parent Vingroup JSC was considering an U.S. initial public offering (IPO) of its car unit that could value VinFast at about $60 billion, though an initial second-quarter deadline for the deal mentioned by one of the sources was delayed.

    VinFast Europe CEO Bich Tran said any IPO decision was up to the company’s headquarters in Vietnam.

    “Our European plans are independent from any IPO. We’re carrying on with our plans, everything in Europe is moving as planned,” she said.

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  • Rocket Internet-backed Flash Coffee plans Asia-wide rollout

    Rocket Internet-backed Flash Coffee plans Asia-wide rollout

    The tech-enabled coffee chain, Flash Coffee, is accelerating its Asian expansion plan, making its Hong Kong debut this month and committing to opening its first stores in Japan and South Korea later this year.

    Launched last year, Flash Coffee already operates more than 100 locations across Indonesia, Thailand, Singapore, Taiwan and Hong Kong. The chain aims to increase its network to more than 300 stores, expanding its footprint into Malaysia, Vietnam and the Philippines next year.

    The Hong Kong launch follows Flash Coffee’s Series A funding round led by tech investment firm White Star Capital last April where it successfully secured US$20 million from a range of investors, including Rocket Internet, whose subsidiaries include Global Fashion Group and HelloFresh.

    Located at Golden Centre in Sheung Wan, the chain’s first Hong Kong store is – like its others – designed to “fit the needs of the ‘new normal’ and cater to a bustling lifestyle”. Customers can order through a mobile app and pay before picking the order at the store or have it delivered. Meanwhile, Flash Coffee connects its customers and baristas through individualized consumer and barista mobile apps, matching the order with a nearby pick-up outlet.

    The chain also offers a digital coffee loyalty program on the app, offering gamified challenges and personalized rewards.

    “Hong Kong is already recognized as a city that is willing to embrace technology,” said Jonathan Tsao, MD at Flash Coffee. “Over the past few decades the city has also built up a reputation for its love of premium coffee – but so far, this has only been available at premium prices.

    “Flash Coffee intends to shake things up, by offering a new coffee culture built around technology, affordability, and digitally-driven customer-focused solutions.”

    The launch of Hong Kong’s first Flash Coffee store will be followed by a series of new store openings in Causeway Bay, Mong Kok and Wan Chai by the end of next month. The coffee chain aims to reach 50 stores in the territory by mid-next year.

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  • Masan to leverage retail, telecom synergy by acquiring Mobicast

    Masan to leverage retail, telecom synergy by acquiring Mobicast

    The Sherpa, a subsidiary of Masan, has announced a 70 percent acquisition of Mobicast shares with a total cash consideration of VND295.5 billion ($13 million).

    Investment in Mobicast is the next step taken by Masan to integrate its third piece, digital services, into its ecosystem, after the successful inclusion of grocery and financial services.

    This was carefully mapped out by Masan in 2019 when the group revealed its plan to build a one-stop-shop that satisfies consumers’ essential, financial, educational, social, entertainment, and healthcare needs. For Masan, this is a unified off to online platform, “Point of Life”.

    The entry into the telecommunication and essential service sectors on a digital platform will enable Masan to gain access to approximately 80 percent of the consumer wallet share.

    Operating under the brand Reddi, Mobicast is a Vietnamese start-up, full-serviced Mobile Virtual Network Operator (MVNO). MVNOs are wireless communication service providers that do not have their own frequency spectrum allocation or wireless network infrastructure.

    MVNOs partner with traditional Mobile Network Operators (MNO) to use their wireless network infrastructure to provide telecom and data services to consumers. MVNOs use an asset-light business model by leveraging existing transmission and network infrastructure. MVNOs are a common business model in the telecom space globally. For example, MVNOs command a nearly 20 percent market share of the total United Kingdom mobile market.

    When incorporated into “Point of Life”, Reddi stands to benefit from exclusive access to Masan’s consumer base and physical and online touch points nationwide. This will significantly lower Reddi’s consumer acquisition cost, enabling it to reinvest savings to develop unique digital consumer solutions, given that 44 percent of subscribers predominately use voice and SMS in Vietnam, and customer service experience platforms.

    Masan Group CEO, Danny Le, said: “Reddi is the first step to digitalize our “Point of Life” platform and synchronize our products and services into a unified offering. While we are in the early innings, we have all the strategic components to develop the most cost effective consumer acquisition model, thereby lowering the costs of our services and products for the benefit of our consumers – this is the definition of Point of Life.”

    Previously, in June 2021, Masan launched its first CVLife store that integrates financial services offered by Techcombank and Phuc Long Kiosk into WinMart+ supermarkets (formerly known as VinMart+). As shared by Masan, the current number of over 2,300 WinMart+ stores would be expanded to more than 3,001, with around 700 new stores to be launched, by the end of 2021. The Phuc Long Kiosk model will be integrated into 1,000 WinMart+ stores, thus boosting revenue and profit margins and bringing in more modern customers.According to Masan, Reddi’s target market is modern consumers who are digital savvy. This group of customers is willing to change and try out new products and services to refresh their consumer experience.

    Masan has a wide distribution network as its first advantage, with nearly 2,400 WinMart/WinMart+ supermarkets and stores nationwide to serve more than 300 million customers annually. Added to this is Masan’s strong consumer relationship with 300,000 general trade (GT) retailers. Masan’s distribution network “weaves” across the country, offering convenient and fast access to its services.

    Masan also has a loyalty customer base of nine million WinMart/WinMart+ members, including a large number of young, urban and digital-savvy customers from Phuc Long, five million affluent consumers from Techcombank and millions of customers from other Masan partners.

    These two strategic factors allow Reddi to maximize its cost and time savings in building a distribution network, while optimizing its consumer acquisition and retention cost.

    According to MIC’s Department of Telecommunications, Vietnam had nearly 133 million mobile subscribers as of the end of 2020, while its population is more than 97 million. Of these 133 million subscribers, 56 percent have 3G, 4G and 5G coverage.

    According to the We Are Social 2021 report, the most used mobile apps include: chat apps (94.7 percent), entertainment and video apps (83.4 percent), music apps (58 percent), game apps (57.2 percent), shopping apps (68.5 percent), banking and financial services apps (40.1 percent).

    Entry of a retail company into the telecommunication sector has become a huge success in India, as in the case of Reliance Jio, the largest mobile network operator in the world’s second-largest mobile market. Reliance Industries is India’s largest retailer with nearly 11,000 points of sale, 23 distribution centers and a database with more than 110 million loyal customers.

    In 2016, Reliance stepped into the digital services and electronics telecommunication sectors by launching the Jio network operator. To date, Jio has raced past competitors to become India’s largest mobile operator thanks to its reasonable pricing, good signal quality and appealing, differentiating service plans. Jio currently has about 400 million paying subscribers for services in their ecosystem

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  • Bamboo Airways launches ‘historic’ direct Vietnam-US flight

    Bamboo Airways launches ‘historic’ direct Vietnam-US flight

    Bamboo Airways conducted its first direct flight from Vietnam to the U.S. Thursday night. The QH9149 flight, using the Boeing 787-9 Dreamliner aircraft, took off at 7:55 p.m. from Hanoi’s Noi Bai Airport for San Francisco.

    The flight, the first of 12 direct flights between Vietnam and the U.S. that Bamboo Airways has won approval from the Transportation Security Administration (TSA), is expected to take over 14 hours.

    The flight crew included four pilots, 14 flight attendants, and several technicians and ground controllers to perform necessary functions at the San Francisco Airport.

    Before the flight took off, a commemoration ceremony was held at the airline’s headquarters on Cau Giay Street the same day.

    Nguyen Manh Quan, deputy general director of Bamboo Airways, said the flight was a historic one, not just for Bamboo Airways also for Vietnam’s aviation industry itself.

    “We will once again affirm the capability for operation, safety, security and infrastructure for Vietnamese airlines and the entire Vietnamese aviation industry in general,” he said at the meeting.

    Nguyen Ngoc Trong, another deputy general director of Bamboo Airways, said the flight’s goals were to serve tourists in both Vietnam and the U.S., foster commercial, diplomatic and cultural exchanges, and to affirm the status of Bamboo Airways, considering that direct flight to the U.S. is among the hardest flight paths to achieve.

    “In the last two years, we’ve managed to see opportunities in developing flights not just within Vietnam, but also in Southeast Asia and Northeast Asia like Japan, Taiwan, and even reaching towards Europe and Australia. And now, to the U.S.,” he said.

    “By introducing direct flights to the U.S. at this moment in time, we’re showing that we are ready to operate commercial flights once the pandemic dies down to meet customers’ demands in both countries,” he added.

    Bamboo Airways had earlier announced plans to organize three direct flights to the U.S. each week, gradually increasing the frequency to 5-7 flights, and then to daily flights.

    Vietnam Airlines has conducted several direct U.S. flights for Covid-19 repatriation purposes. The national carrier said this week it is set to receive its final permit from U.S. authorities.

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  • Nike’s Vietnam supply hurdles in focus ahead of quarterly results

    Nike’s Vietnam supply hurdles in focus ahead of quarterly results

    Nike’s updates to its full-year sales outlook on Thursday will likely answer that pressing question for Wall Street as the world’s largest sportswear maker deals with unprecedented supply challenges ahead of the holiday season.

    Three months ago, Nike gave a rosy outlook for the rest of the year as it benefited from consumers splurging on sneakers for running and hiking as they returned to their routines after over a year of staying at home.

    Still, some analysts have cut their outlook for Nike’s sales, predicting that lockdowns and factory closures in Vietnam, where about half of all Nike footwear is manufactured, will cause shortages during the crucial shopping season.

    “We believe the risk of significant cancellations beginning this holiday and running through at least next spring has risen materially for Nike as it is now facing at least two months of virtually no unit production at its Vietnamese factories,” BTIG analysts wrote in a note.

    Many factories in Vietnam’s manufacturing hubs have been shut or are operating with drastically fewer on-floor workers since mid-July as a surge in Delta variant cases forced the government to implement tight containment policies.

    Other apparel companies including Abercrombie & Fitch and Adidas AG have taken a hit to their businesses due to production issues in Vietnam. read more

    Some analysts, however, see Nike using its scale to offset the sales impact from Vietnam shutdowns.

    “The company should be able to mitigate some headwind by shifting production to other countries, like China, and prioritizing top sellers, key products, and its DTC (direct-to-consumer) channel,” Telsey Advisory Group analysts said.

    Since the start of September, analysts have cut their full-year sales expectations for Nike to $49.81 billion from $50.34 billion due to worries about supply shortages

    Full-year earnings per share estimates have also fallen to $4.24 from $4.33, according to IBES data from Refinitiv.

    Nike’s revenue for the reporting quarter is expected to have risen 17.7 percent to $12.46 billion from a year earlier.

    The blue-chip stock has gained 11 percent this year, but is down about 10 percent from its record high hit in August.

  • Vietnam considers lifting Boeing 737 Max ban

    Vietnam considers lifting Boeing 737 Max ban

    The Civil Aviation Authority of Vietnam has proposed that the Boeing 737 Max aircraft be allowed to operate and imported to the country after a ban of over two years.

    The CAAV petitioned the Ministry of Transport to consider greenlighting the aircraft after 178 out of 195 global aviation authorities had lifted the ban on the jet.

    Over 360 Boeing 737 Max aircraft of 35 airlines have resumed service, it said.

    As of Sept.15, the aircraft has operated over 150,000 flights with over 370,000 hours of safe performance.

    Vietnam in April allowed the Boeing 737 Max to pass through its airspace, two years after it was grounded worldwide in March 2019 after 346 people were killed in two crashes in the space of a few months in Indonesia and Ethiopia.

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  • Vietnam Airlines ready for US direct route

    Vietnam Airlines ready for US direct route

    Vietnam Airlines is set to receive its final permit from U.S. authorities to conduct regular direct flights to the U.S. after nearly two decades of preparation.

    The national flag carrier has completed all necessary documents to be approved by the U.S. Transportation Security Administration (TSA), it stated.

    It is set to receive the permit from Federal Aviation Administration (FAA) soon. The airline did not specify a date.

    Vietnam Airlines said the permit is different from that given earlier for international special charter flights between Vietnam and the U.S.

    The carrier had earlier received permits to conduct 12 charter flights last year and another 12 this year.

    Bamboo Airways had also received a permit to fly 12 charter flights to the U.S. from this month to November.

    Last month, Vietnam Airlines was planning to operate regular flights between Vietnam and the U.S. starting October.

    The airline in 2003 was ordered by the Ministry of Transport to begin direct services to the U.S. by 2005. However, concerns about profitability kept the carrier from realizing the goal until now.

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  • Vietnam’s Bamboo Airways to sign $2 bln deal with GE for engines on Boeing jets

    Vietnam’s Bamboo Airways to sign $2 bln deal with GE for engines on Boeing jets

    Vietnam’s Bamboo Airways will sign a deal valued at nearly $2 billion with General Electric to purchase GEnx engines to power Boeing 787-9 Dreamliner aircraft, the airline said on Tuesday.

    The GEnx engines, due to be delivered in 2022, will be used on the airline’s wide-body Dreamliner fleet to operate planned non-stop routes between Vietnam and the United States, the company said.

    “This new signing agreement will be an important milestone for the airline to expand its transcontinental flight network, connecting Vietnam with medium- and long-range markets,” the statement said.

    The airline said it will open a representative office in the United States and sign agreements with San Francisco International Airport and Los Angeles International Airport this week, paving the way for its first test of a non-stop flight between the countries on Thursday.

    Bamboo said it aims to finalise procedures for non-stop commercial flights to the United Sates early next year, pending government approvals.

    Bamboo said it is also seeking to expand its international flight network and open more routes to Australia, the United Kingdom and Germany, using its Boeing 787-9 Dreamliner aircraft.

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  • Thai packaging firm eyes $353-mln expansion in Vietnam

    Thai packaging firm eyes $353-mln expansion in Vietnam

    Thai company SCG Packaging has announced plans to invest $353 million to expand in Vietnam.

    It will build a new plant in the northern province of Vinh Phuc, which will increase its capacity by 74 percent to 870,000 tons of packaging paper a year when it goes on stream in 2024.

    It will be operated by Vina Kraft Paper, a joint venture with Japan’s Rengo Company in which SCGP holds 70 percent.

    Vietnam is both a big consumer and exporter in the region, making it a big draw for multinational investors, CSGP’s chief executive, Wichan Jitpukdee, said.

    The country’s demand for packaging paper and related products is expected to grow at 6-7 percent a year in 2021-24, SCG Packaging estimates.

  • Seafood companies fear lack of raw materials as Covid hits farm output

    Seafood companies fear lack of raw materials as Covid hits farm output

    The decline this year in shrimp and fish farming in the Mekong Delta threatens to cause a serious shortage of raw materials for processors in the coming months.

    “We have increased shrimp prices, but many farmers are still worried that Covid outbreaks will affect prices later, and so have reduced their production,” Le Van Quang, general director of Minh Phu Aquaculture Group Joint Stock Company, said.

    Speaking at a conference held online on Friday to discuss how to restore processing and exports of agricultural and aquatic produce, he forecast a big shortage in the next three months, and said businesses would be unable to meet foreign orders.

    In Tien Giang and An Giang provinces, farmers have been unable to sell their fish, shrimp and crab harvests for months due to Covid-19 restrictions.

    Many processing plants have been running at 30-40 percent of capacity as stay-at-work requirements cause a labor shortage.

    Nguyen Hoai Nam, deputy general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said the government should come up with policies to encourage shrimp farmers right now so that they could harvest in November to enable exports.

    He also wanted it to prioritize Covid-19 vaccination for seafood companies’ workers so that normal production could resume.

    The southern provinces and Ho Chi Minh City could be divided into three in terms of likely resilience if certain epidemic prevention measures are adopted after September 15, he said.

    The first, where the infection rate is lowest, includes Ca Mau, Bac Lieu, Hau Giang, Soc Trang, Ben Tre, and Vinh Long provinces. Businesses in this shrimp processing hub are expected to return to 60 percent of capacity by October and 80 percent by year-end.

    The second, where the epidemic is gradually being controlled, includes An Giang, Kien Giang, Tra Vinh, and Dong Thap provinces and Can Tho city, and here the rates would be 50 percent and 70 percent.

    The area with the highest risk of infection, including Long An, Binh Duong and Tien Giang and Ho Chi Minh City, would recover to 40 percent and 60 percent.

    Vietnam’s seafood exports were worth $5.5 billion in the eight months of 2021, a year-on-year increase of 6 percent, according to the Vietnam Association of Seafood Exporters & Processors (VASEP).

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  • Vietnam Steel exports surge

    Vietnam Steel exports surge

    Steel exports increased by 43.4 percent year-on-year in the first eight months to 8.54 million tons, and were worth US$7.1 billion, a 127 percent rise.

    In August, for a second month in a row, the billion-dollar mark was breached, with the value of shipments increasing 2.5-fold to nearly $1.5 billion.

    The main export markets were Southeast Asia, which bought 2.7 million tons and China (1.8 million tons).

    Exports to the E.U. and U.S. skyrocketed 7.5-fold and four-fold from 12 months earlier as demand there continued to soar.

    Exports to Europe also benefited from the EU-Vietnam Free Trade Agreement, with many companies taking advantage of lower tariffs.

    According to the Vietnam Steel Association, the country’s production capacity is around 24 million tons a year. Output this year is expected to reach 21.2 million tons, enough to meet domestic and export needs.

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  • E-pharmacy startup Medigo raises $1 million

    E-pharmacy startup Medigo raises $1 million

    E-pharmacy startup Medigo has received a $1 million investment from venture capital firm Touchstone Partners.

    The med-tech company, which helps users order medicine from pharmacies in the comfort of their homes, plans to expand its offerings to telemedicine and other healthcare services amid growing healthcare spending in Vietnam.

    Medigo, launched in July 2019, has partnered with over 200 medical institutions in Ho Chi Minh City, Hanoi, and Da Nang.

    In the past six months, it saw gross merchandise value increase eight times. Medigo currently has over 200,000 users on its platform.

    Touchstone Partners is an early-stage Vietnamese venture capital firm that launched its inaugural $50 million fund earlier this year.

    Speaking of the investment, co-founder of the firm Ngo Thuy Ngoc Tu said that amid the pandemic, Medigo has offered sustainable solutions to help Vietnamese access healthcare services at reasonable costs.

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  • Vingroup launches Big Data research company

    Vingroup launches Big Data research company

    The Vingroup Corporation (VIC), Vietnam’s largest private conglomerate, has set up a new firm – VinBigData Jsc – with a chartered capital of VND470.8 billion ($20.29 million).

    The group will hold a 99 percent stake in the new company. The formation of VinBigData is based on the separation of a part of science and technology functions (scientific and technological services) of the Big Data Research Institute – under the Vintech Technology Jsc.

    This new company has registered to function in 25 fields, focusing mainly on scientific research and technological development.

    Vingroup had established last month an artificial intelligence research and application company, VinAI.