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Tag: Vietnam

  • Vietnam begins to make switch to online car sales

    Vietnam begins to make switch to online car sales

    Three auto brands have begun to sell online as they seek to take advantage of the country’s e-commerce boom.

    Since January this year customers have been able to go to the VinFast website, select the model, customize color and interiors, and indicate mode of payment.

    They can then go to the nearest showroom to complete the purchase. VinFast offers to deliver the car to the customers’ doorstep. Customers who want to pay in installments can submit their profiles online. Mercedes launched online sales March. Customers can customize their vehicles and a dealership is suggested to them. The sales procedures are however completed in person.

    TC Motor, which assembles Hyundai vehicles, last month began to allow customers to compare its cars online and see how much they cost after promotions, taxes and fees.

    Auto companies are actually late in adopting technology in sales, Nguyen Trung Kien, chief technology officer at digital marketing company Novaon MarTech, said.

    “When customers become familiar with online transactions, online sales options are inevitable.”

    It has taken a long time for auto companies to start offering online sales since theirs are expensive products and customers are used to the idea of physically touching them before making a purchase decision, he said.

    But with the development of technology, auto manufacturers could now go directly to customers and gradually cut out the middlemen, and also get to know their customers’ needs more, he added.

    But industry insiders expect it to take a long time to change customers’ preference from shopping offline for cars to online.

    “There are many perks in online shopping for cars but to make the decision customers still need to come to showrooms and see with their own eyes and touch with their own hands,” the marketing director of a Japanese auto company in Vietnam, who asked not be identified, said.

    In order to reach the same level as Tesla, meaning customers do not need to test drive the cars before making the purchase, auto manufacturers need to first create firm trust in product quality, the marketing director added.

    Auto sales in Vietnam rose 53 percent year-on-year in the first five months to 126,894 units, according to the Vietnam Automobile Manufacturers Association.

  • Foreigners in Vietnam face settlement headache

    Foreigners in Vietnam face settlement headache

    The foreigner community has high expectations for quality apartments with synchronized amenities and a favorable location, though good housing options remain limited.

    According to a survey by InterNations, in 2021, Vietnam ranked among the top 10 countries with a foreigner satisfaction rating of more than 86 percent. It was proved in particular by the fact that 9 percent of expats in Vietnam had an annual income of more than $250,000, compared to only 3 percent globally, giving the domestic real estate market, particularly in the high-end and luxury segments of residential and vacation property, a certain customer base.

    To provide foreigners the best living options, Phu Thinh Green Park offers more than 500 smart apartments designed to high-quality standards by Phu Thinh Group. Located in the Ha Dong administrative center with numerous corporate headquarters and international organizations, Phu Thinh Green Park is surrounded by a series of important routes, including Quang Trung, Tran Phu, Nguyen Trai, Le Trong Tan, To Huu, Phuc La, Xa La, Nguyen Xien, and Hanoi metro stations. These customers are mostly experts, high-income employees with strict requirements for living quality, facilities, and proximity to expat communities. However, it is difficult for a foreign specialist to access suitable rental housing that meets excellent living standards and apartment quality, even in a big city like Hanoi.

    Residents can also walk within five minutes to the metro station, supermarkets, commercial centers, administrative centers, hospitals, schools, and golf courses. Foreign tenants who prefer public transportation will soon have the option of taking the Cat Linh – Ha Dong railway. Furthermore, the project is well connected to Thang Long Avenue, where tens of thousands of international professionals work.

    The internal utility system meets all living needs for residents via a 300 square meter overflowing swimming pool, A-class offices, commercial centers, landscaped parks, and rooftop cafes.

    Green Park Phu Thinh is located next to a 100-hectare sports park with four fresh seasons, suitable for recreation and entertainment. The bulk density of trees is like a natural air conditioner for the local atmosphere. The temperature on summer days is usually 2-3 degrees Celsius lower than in other regions.

    Moreover, Phu Thinh Green Park is a place of cultural interference of different countries, which creates a community with diverse lifestyles. Located between the Hyundai Hillstate area and Booyoung Residence, Phu Thinh Green Park attracts a lot of foreigners, mainly from Japan, China, and Korea.

    A square meter in Phu Thinh Green Park costs VND27 million ($1,170). The project is now open for sale during the third quarter of 2021. Documents and handovers are legally transparent to ensure the rights and profits of customers. With each apartment handed over, the basic equipment system will be installed according to standard amenities.

    “Synchronous development of traffic infrastructure of Ha Dong District is strictly guaranteed for a rental profit of 5-6 percent per year and/or a high capital growth of 30-50 percent in the next two to three years. Green Park is suitable for real estate investors expecting high profits and safety,” a project representative said.

    In early 2021, due to the sharp increase of iron and steel prices and transportation costs, the value of an apartment could exceed the purchase price, he added.

  • Inflation in Vietnam likely to be below 3 pct this year

    Inflation in Vietnam likely to be below 3 pct this year

    Inflation this year is likely to be 2.5-3 percent, well below the target of 4 percent set by the National Assembly, due to low consumer demand, analysts said.

    Global prices of strategic materials are likely to climb in the next few months due to geopolitical tensions and Covid-19, but food and foodstuff prices in Vietnam are expected to remain stable due to strong supply and weak demand, the Ministry of Finance’s price management department said at a seminar on the price and market situation on Friday.

    The consumer price index (CPI) was up 1.47 percent year-on-year in the first half of the year, its slowest rise since 2016, according to the General Statistics Office.

    The prices of some foodstuffs like pork and chicken fell, while those of petrol and commodities rose sharply.

    Nguyen Ba Minh, head of the Institute of Economics and Finance, said the CPI would rise by some 2.5 percent this year.

    Le Quoc Phuong, former deputy director of the Vietnam Trade and Industry Information Center, too expected inflation to be below 3 percent.

    Dinh Trong Thinh, an economist at the institute, said if the Covid-19 situation worsens, and Vietnam’s economy grows at 6.8-7 percent in the second half of this year, inflation would be 3.3-3.5 percent.

    If the economy grows at 7-7.4 percent, the inflation would be 3.8-4 percent, he said.

    The government expects growth of 6-6.5 percent in the second half this year depending on the Covid situation.

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  • Japanese retailer Muji opens first store in Hanoi

    Japanese retailer Muji opens first store in Hanoi

    Japanese chain retailer Muji opened its first store in Hanoi on Saturday after opening one in HCMC last November. The store, which spans 2,000 square meters at Vincom Center Metropolis on Lieu Giai Street, is the second to be opened in Vietnam.

    The flagship store in Hanoi provides around 5,000 products, ranging from fashion, cosmetics to household items, interior design and food.

    Tetsuya Nagaiwa, Muji’s head of Vietnam business, said the chain spent two years searching for a suitable location for the Hanoi store, a much longer process compared to its HCMC endeavor.

    The southern metropolis’s downtown District 1 is a no-brainer when it comes to choosing a location for a store. But Hanoi has multiple locations with different capacities for attracting customers, Tetsuya explained.

    Vincom Center Metropolis was eventually chosen since it is in an area with a big Japanese population and is wide enough to host a large store.

    Tetsuya said Muji’s current strategy is to take hold of Hanoi and HCMC, both major cities, to boost brand recognition. Afterward, depending on factors like economic development and population, Muji would consider opening more stores in other cities.

    Vietnam is among the world’s most promising retailer markets right now, Tetsuya said, adding the country has attracted a large number of investors thanks to its ever-growing economy and a young population with a middle-class income.

    Certain Muji products sold in Vietnam would be cheaper than other markets’ as they are produced by domestic manufacturers, he said, without revealing exact information regarding the domestic factories.

    Muji, founded in 1980, has over 1,000 stores in 33 countries and territories.

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  • Construction steel prices fall further

    Construction steel prices fall further

    The price of Vietnamese construction steel dropped to below VND17 million ($732) per ton, but contractors said this was still high.

    The Viet Duc Steel Company said it has lowered prices of steel bars and coils by VND300,000 per ton from July 1, while the Thai Nguyen Iron & Steel Joint Stock Corporation reduced the prices of steel coils by VND300,000 to around VND16.7 million per ton.

    The prices of a ton of steel coils produced by the Hoa Phat Group and the Vietnam-Italy Steel Joint Stock Company are VND300,000-600,000 lower than in June.

    The decline in prices of construction steel in the Vietnamese market over the past few weeks has been attributed to lower prices of steel billets in the world market.

    The most-traded steel rebar on the Shanghai Futures Exchange, for October delivery, closed down 2.9 percent at 5,014 yuan ($774.60) a ton.

    Another contributing factor is weaker demand for construction materials in some localities that have already entered the rainy season.

    However, many construction contractors said the prices of domestic steel products were still high, cutting deep into their profit, leaving them with smaller profits. Steel costs account for 10-30 percent of a construction project.

    Vietnam produced nearly 12 million tons of steel products of different kinds in the first five months of this year, a year-on-year rise of more than 38 percent while exporting nearly 2.8 million tons, up 80 percent.

    The country exported 1.1 million tons of steel to China in the five-month period, twice that of last year, according to the General Department of Vietnam Customs.

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  • VietinBank pre-tax H1 profits up 75 pct

    VietinBank pre-tax H1 profits up 75 pct

    State-owned lender VietinBank has recorded pre-tax profits of VND13 trillion ($565.2 million) in the first six months of 2021, a year-on-year increase of 75 percent.

    Its ratio of non-performing loans at the end of Q2 was 1.38 percent, chairman Le Duc Tho said, adding that the targeted non-performing loans ratio for this year was 1-1.2 percent

    The bank’s total assets value at the end of June was VND1.4 quadrillion ($60.8 billion), while its loans outstanding were VND1.06 quadrillion, according to its CEO Tran Binh Minh.

    Capital mobilization as of June reached VND1.2 quadrillion, up 3.4 percent year-on-year.

    The bank plans to increase its charter capital by 29 percent to over VND48 trillion this year by paying dividends in shares.

  • New high-end apartment supply up 120 pct

    New high-end apartment supply up 120 pct

    In the first six months, 7,040 new high-end housing units were launched in HCMC, up 123 percent year-on-year, accounting for 59 percent of new supply.

    Mid-range supply rose 295 percent to 4,908 units, accounting for 49 percent of new supply, while no new affordable unit was launched, according to a report by the Ho Chi Minh City Department of Construction.

    This shows an imbalance in the HCMC real estate market where developers focus on the high-profit, high-end and luxury market while ignoring the affordable segment, boasting strong demand.

    The HCMC Real Estate Association (HoREA) predicts the imbalance would cause negative consequences in housing security.

    HCMC plans to increase its residential area per capita to 21.04 square meters by the end of the year, up nearly 2 percent from now. To do this, it needs an additional eight million square meters.

  • Another forex trading platform swindles hundreds of thousands of dollars

    Another forex trading platform swindles hundreds of thousands of dollars

    Yet another fraudulent foreign exchange trading platform that cheated people out of hundreds of thousands of dollars has been exposed in HCMC. Nga, a resident of HCMC’s District 7 spends most of her time these days reading updates about FXTradingMarkets in a Facebook group with 4,200 members.

    On June 25, the group received a screenshot of a notice believed to be from the Lion Group, which ran the platform, that it would cease to operate from the next day onwards. Nga has invested VND1.4 billion ($60,700) in the platform; and many others have also invested billions of dong. Now, they do not know how they can get back the money.

    A month earlier, the HCMC police had warned people not to trade on currency trading platforms, saying there was a high risk of losing their money. They had found that four people from the Lion Group were hosting forums in various places to talk about how to get rich quick.

    Since 2019, the group has been advertising FXTradingMarkets as a platform headquartered and licensed in the UK and linked to another platform called UKTrade.

    An investor had to deposit at least $1,000 and would get its equivalent in FXT, a cryptocurrency the platform uses to trade.

    Investors would bet on whether a currency would rise or fall within the next 30 seconds. If they were right, they got 95 percent of the bet as profit, but lose everything if they were wrong.

    However, the platform also advertised that everyone could earn one percent a day on their investment if they allowed “experts” to make the bet on their behalf.

    Investors also got a commission if they introduced new clients.

    At first, the investors could trade the FXT currency with their leader for cash, but starting at the end of February, the platform no longer allowed this trade, and investors had to trade in other cryptocurrency markets with a rate of 1 FXT equals $0.3, meaning a 70 percent loss.

    “When similar platforms crashed, we were concerned, but the managers told us not to worry,” Nga said.

    Many celebrities endorsed FXT and so investors continued to place their trust in it, she said.

    Earlier this month the platform posted a notice saying “upgrade ongoing” and did not allow investors to see their account balance. On June 25, when the leaders gave their final notice, 1 FXT was worth $0.0022.

    That means Nga’s investment of $60,000 was then worth only $133, or a 99.78 percent loss.

    The other platform UKTrade also crashed on June 26.

    Tam of Thu Duc District said he invested VND2.8 billion in UKTrade in April but “most of the money is now gone,” adding that thousands of investors lost 95 percent of their money on May 10.

    “Because of the pandemic, our experts were not able to analyze the market,” the leaders told investors, asking them to either pour more money in to recover the loss or be removed from the system.

    Tam and around 10 other investors joined together to report the platform to the police. Together, they have lost a total of VND6 billion.

    Vo Thi Dieu Hien in the central province of Binh Thuan in early May invested VND319 million, but in less than a week she saw all her cryptocurrency gone.

    The leaders asked her to submit another 30 percent of her capital to “save” her account and promised higher profits. She did not, and her account was locked right after.

    “That’s when I realized I was tricked, so I reported it so others won’t fall into the same trap.”

    HCMC and Binh Thuan police said they have received the reports and have done initial investigations. They found that FXTradingMarkets was registered and has servers in the U.S.

    There are signs that the administrators are setting up a new website with similar user interface and functions at sp500stock.com, the police said. The website was no longer available at the time of publishing.

    This is the latest of many of forex trading platform frauds that have been uncovered in Vietnam of late. Thousands of investors have been duped, even though authorities have repeatedly warned them that these platforms are illegal and highly risky.

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  • Vietnam to trial virtual currency

    Vietnam to trial virtual currency

    The Vietnamese government has ordered its central bank to study virtual money using blockchain technology over three years amid rising interests in this type of currency.

    The State Bank of Vietnam will be in charge of studying and trialing the use of virtual money from this year until 2023 as part of key objects in mastering core technologies, according to a government decision.

    The government does not give a clear definition of virtual currency and assets.

    For now, cryptocurrencies remain an illegal means of transaction in Vietnam. However, the trading of Bitcoin and the like is popular with many investors using foreign platforms and social media to make money from this asset.

    Vietnam has the second-highest rate of cryptocurrency usage among 74 economies, according to a survey by market researcher Statista.

  • Global delivery firms increase flights to Vietnam amid e-commerce boom

    Global delivery firms increase flights to Vietnam amid e-commerce boom

    Express delivery giants like DHL and UPS are increasing their transport capacity to Vietnam thanks to rising demand due to the Covid-19 pandemic.

    Germany-headquartered DHL Express recently announced a new delivery route from Hong Kong to Ho Chi Minh City using wide-body Airbus A330 aircraft.

    There would be six one-way trips a week, each with a capacity of up to 62 tons of cargo, it said.

    This is to mainly serve the rising online shopping demand, it added.

    It will also upgrade the aircraft used on the Hanoi – Hong Kong route from Boeing 737-400s to 737-800s to serve Vietnam’s surging exports.

    Most consumers are now looking at delivery speed as a key component of their shopping experience, Bernardo Bautista, CEO of DHL Express Vietnam said.

    Last year U.S.-based UPS launched its first service to Vietnam from its hub in China to increase delivery speed.

    Vietnam does not have a dedicated cargo airline, and industry insiders estimate foreign companies hold an 80 percent aviation logistics market share.

    Johnathan Hanh Nguyen, chairman of retail company Imex Pan Pacific Group, recently announced plans to establish a cargo airline at an investment of $100 million.

    Vietnam’s e-commerce market expanded by 18 percent last year to $11.8 billion, the only country in Southeast Asia to record double-digit growth amid the pandemic, according to the Vietnam e-Commerce and Digital Economy Agency.

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  • Alibaba betting big on Vietnam e-commerce potential

    Alibaba betting big on Vietnam e-commerce potential

    Fast increasing online groceries demand and the high growth potential of Vietnamese e-commerce market are factors driving Chinese giant Alibaba’s investment in Vietnam.

    A consortium led by the Chinese e-commerce giant invested $400 million in The CrownX, a subsidiary of conglomerate Masan Group that operates retail chain WinMart.

    The investment was seen as a chance for Lazada, Alibaba’s e-commerce platform, to create a business relationship with WinMart for the online groceries business, Singapore-based technology media company Tech in Asia said.

    Kenny Ho, Head of Investment for Southeast Asia at Alibaba, said the combination of Alibaba’s online retail expertise, Lazada’s e-commerce platform in Vietnam and Masan’s leading offline network will be a strong catalyst for modernizing Vietnam’s retail landscape.

    WinMart will become the preferred grocery retailer on Lazada, while its outlets will be used as pick-up points for online orders, Ho said.

    The investment by Alibaba indicates that the company is tapping into a pandemic-fueled growth in the demand for online groceries, Tech in Asia reported.

    The pandemic has elevated groceries into the hottest e-commerce vertical. Vietnamese consumers who have tried online grocery shopping have doubled in 2020, according to a report from Google, Temasek, and Bain & Company, with over 75 percent indicating they would continue the practice even after the pandemic has subsided.

    Another reason for Alibaba’s investment in Vietnam is its high growth potential. The nation’s e-commerce market expanded by 18 percent last year to $11.8 billion, the only country in Southeast Asia to record double-digit growth amid the pandemic, according to the Vietnam e-Commerce and Digital Economy Agency.

    A report by market research company Global Data’s E-Commerce Analytics said Vietnam’s e-commerce is likely to see compounded annual growth of 18.8 percent between 2020 and 2024, with the value rising to $26.1 billion.

    Vietnam has a stable growth economy, which grew by 2.9 percent last year despite the Covid-19 pandemic. The number of middle-class households in the country is expected to reach 17 million by 2030.

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  • Fintech startup gets $2 mln seed funding from global investors

    Fintech startup gets $2 mln seed funding from global investors

    Vietnamese fintech startup Infina has raised $2 million in seed funding from five global venture capitalists.

    The investors are Japan’s Saison Capital, Indonesia’s Venturra Discovery, Singapore’s 1982 Ventures, the U.S.’s 500 Startups, and Korea’s Nextrans.

    Some Google and Netflix executives are also taking part in this round.

    The startup has developed an investment app called Infina that enables users to make term deposits, invest in certificates of deposit and exchange traded funds. Most users are between the ages of 25 to 40 and looking for alternatives to investing in long-term asset classes like real estate.

    The seed funding will be used to increase the number of users and diversify the investment portfolio, and hire experts to analyze customers’ risk preferences.

    It plans to expand into other countries in future, but for the time being is focused on the Vietnamese market.

    The company said that around 500,000 securities trading accounts were opened in the first five months of 2021, a 20 percent year-on-year increase, according to the Vietnam Securities Depository.

    This along with Vietnam’s high Internet penetration rate, which was at around 70 percent as of January, and the fact that more than three-fourths of Internet users have used online financial services before, enable apps like Infina to gain traction.

    Infina was launched in January 2021 by James Vuong, who used to be an engineer in the U.S.’s Silicon Valley before returning to Vietnam to serve as vice president of investment at Vietnam’s first venture capital fund IDG Ventures.

    Vuong said many Internet users began using digital services, including for investments, with the interest rate cuts by the central bank to help businesses cope with Covid-19 prompting many investors to look for alternatives with higher returns than bank deposits.

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  • Coffee chains race to establish global presence

    Coffee chains race to establish global presence

    Vietnamese coffee chains are moving to establish themselves in foreign markets as part of expansion plans as well as a strategy to deal with increased domestic competition.

    Tea and coffee chain Phuc Long has just announced plans to open its first store in California in July.

    TNI King Coffee last month launched its first store in the U.S. It has already opened its first outlet in South Korea with a partner.

    Highlands Coffee, one of the biggest Vietnamese coffee chains, has started branching out to other markets since 2011. It now has 39 franchised outlets in the Philippines.

    Cong Ca Phe has six outlets in South Korea and two in Malaysia, while E-Coffee opened its first store in Laos last year.

    The branching out decisions of these brands have happened in the wake of heavy competition in Vietnam’s café chain industry.

    In 2019, Highlands Coffee saw its revenue rise 32 percent year-on-year to VND2.2 trillion ($95 million), after having risen at roughly the same rate in 2018. It was followed by popular competitors like The Coffee House, Starbucks and Phuc Long.

    In terms of outlets, Highlands Coffee ranks top with 437 at the time of publishing, followed by Trung Nguyen E-Coffee with 414, The Coffee House with 180, Phuc Long with 82 and Starbucks with over 60.

    Opening coffee chains in foreign markets, particularly the U.S., is a strategy that Vietnamese chains have been thinking of and preparing for the last 10 years, said branding expert Vo Van Quang.

    “They used to have concerns of going from a small country to a big one, but now they have overcome that fear because they see a lot of potential in entering a huge market,” he said.

    One of the biggest advantages for Vietnamese coffee chains in the U.S. market is that consumers there are not as particular as European ones.

    “Most Americans do not have high standards for coffee. They consider it only as a necessity to help them stay awake to work,” he said, adding that in other markets like France or Japan consumers are more difficult to please.

    Another major advantage is that Vietnamese food and drinks have already established trust in the U.S. as a delicious and healthy alternative to fast food.

    “With two million Vietnamese in the U.S., there are now Vietnamese restaurants in every state. Pho and banh mi have become popular dishes among locals there,” said Quang, referring to the iconic Vietnamese noodles soup and sandwich.

    These types of dishes can be included in the menu of coffee chains to increase their competitiveness, he added.

    The potential of foreign markets has had Vietnamese coffee chains thinking big.

    TNI King Coffee, for example, plans to launch an additional 19 outlets in the U.S. by the end of this year and targets to hit 100 stores there by next year.

    “Opening the first store in the U.S. markets is a strong development step for TNI King Coffee in the global market,” said founder and CEO Le Hoang Diep Thao.

    The company had earlier talked about having 1,000 stores in South Korea, but mentioned no specific time frame.

    Branching out to other markets is a sensible move as local coffee chains have been fighting within a small market in recent years, Quang said, adding: “Recent moves by Phuc Long and King Coffee show that coffee chains have adopted a bigger vision to grow larger abroad.”

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  • Ride-hailing firm Grab to launch electric cars in Vietnam

    Ride-hailing firm Grab to launch electric cars in Vietnam

    Ride-hailing firm Grab plans to launch electric car services in Vietnam and Indonesia after piloting a program in Singapore at the end of this year.

    Grab is partnering with South Korea’s automotive manufacturer Hyundai Motor to encourage the adoption of electric vehicles in Southeast Asia.

    Both parties will test new business models including battery and electric vehicles leasing, thus lowering the entry barrier for its driver as the cost to own an electric car is high.

    Grab had said in an earlier report that some of the concerns that make drivers reluctant to use electric vehicles are their price, lack of charging stations and long waiting time for the battery to be fully charged.

    Russell Cohen, Grab’s managing director of operations, said that the company hopes governments will have incentive policies and essential infrastructure like charging stations so that electric vehicles will have many opportunities to develop.

    Grab and Hyundai have been partners since 2018. In 2019, the ride-hailing firm purchased 200 Hyundai Kona electric cars for its car-hiring service GrabRentals in Singapore.

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  • Tiki raises $43.5 mln via corporate bonds

    Tiki raises $43.5 mln via corporate bonds

    E-commerce platform Tiki has raised VND1 trillion (nearly $43.5 million) over the last three months by issuing corporate bonds.

    Issued from 16 March to June 13, the bonds are non-convertible with a fixed interest rate of 13 percent per annum, one of the highest rates in the local market.

    Over 97 percent of Tiki bonds’ buyers are Vietnamese individual professional investors. Two domestic institutional investors and two foreign investors also bought the bonds.

    Tiki will use the VND1 trillion to increase its working capital, expand warehouses, invest in subsidiaries, and fund advertisement and marketing campaigns, among others.

    After suffering losses in recent years, Tiki still has to spend big to grab market shares from rivals like Shopee, Lazada, and Sendo.

    Tiki reported losses of over VND750 billion in 2018, and more than VND320 billion in 2019.

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