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Tag: Vietnam

  • Venture funds commit $815 mln to Vietnamese startups

    Venture funds commit $815 mln to Vietnamese startups

    Vietnamese startups earned pledges of $815 million over the next five years from 33 foreign and domestic venture funds.

    The pledges, announced at the recent Vietnam Venture Summit, came from several foreign funds who’ve been active in Vietnam in recent years, like CyberAgent Capital, AlphaJWC, Monk’s Hill Ventures, as well as several domestic funds like VinaCapital Ventures, Do Ventures, and Viet Capital Ventures.

    At the same event last year, 18 funds had committed $415 million to Vietnamese startups for three years, and $220 million of this was disbursed in the first half of this year.

    Investment in Vietnamese tech startups in the first six months fell 22 percent year-on-year to $222 million due to the Covid-19 pandemic, according to a report by Ho Chi Minh City-based venture capital firm Do Ventures.

    Among six major economies in Southeast Asia, Vietnam accounted for 16 percent of the latest investment pledges, ranking third behind Singapore (37 percent) and Indonesia (30 percent), it added.

    A recent report by U.S.-based consulting firm McKinsey & Company says 12 large digital ecosystems (companies providing services across sectors) will be established across retail and services in Vietnam by 2025, creating a revenue pool of about $100 billion.

  • Amazon has over 100,000 Vietnamese sellers

    Amazon has over 100,000 Vietnamese sellers

    Over 100,000 Vietnamese sellers have successfully debuted on Amazon, with fashion and household goods being some of their best-selling products.

    Gijae Seong, head of Amazon Global Selling Vietnam, said amid the Covid-19 pandemic, sellers have been focusing on products with high demand such as kitchenware, sports gear and house decoration items.

    The world’s largest e-commerce company has also been working with Vietnamese exporters to sell medical masks to the U.S., and would continue this partnership to sell masks, gloves and protective clothing, he said.

    Before demand surged for pandemic-related products, the most popular items sold by Vietnamese sellers had been women and children’s fashion, 3D cards and paper flowers, he added.

    Tran Van Tuoi, CEO of Sea Grapes Vietnam, which sells sea grapes on Amazon, said this year his company participated in the Black Friday and Cyber Monday promotions for the first time and saw sales rise by 300 percent. They rose by 500 percent on Thanksgiving, he added.

    Amazon has in recent years been recruiting Vietnamese sellers by organizing workshops to teach them how to reach out to global customers.

    Eric Broussard, Amazon’s vice president of international marketplaces and retail, said Vietnam is a country with strengths in manufacturing and a large number of good sellers, which is why his company has been investing and expanding there in recent years.

    Amazon Global Selling on Tuesday unveiled a task force in Hanoi to support Vietnamese sellers and launched a Vietnamese version of its sellers’ information center.

    But their initial success notwithstanding, Vietnamese sellers need to make improvements to reach more customers.

    Lai Viet Anh, deputy head of the Ministry of Industry and Trade’s Vietnam e-Commerce and Digital Economy Agency, said local firms need to educate themselves on e-commerce, study foreign customers’ preferences and overcome language barriers as cross-border sales require direct interaction with buyers.

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  • Acecook to open instant-noodle buffet restaurant in Vietnam

    Acecook to open instant-noodle buffet restaurant in Vietnam

    Called ‘Acecook Noodles Cup Buffet’, the store allows customers to create and mix instant noodles to their own preference. Customers can also customize their noodles cup design with stickers and pencil crayon provided.

    Besides providing the buffet service, the store also has a dedicated display area for Acecook’s new noodles range as part of its marketing plan. The store is scheduled to launch on December 19.

    “This is also a tribute to the companionship and support of customers for Acecook Vietnam over the past 25 years,” said Kajiwara Junichi, general director at Acecook Vietnam. “I hope the restaurant will be an attractive destination for our customers, who love instant cup noodles and want to experience new things.”

    The launch is part of Acecook’s strategy to increase the cup noodles sales in the country. According to Nikkei, the Japanese instant-noodle maker aims to achieve about 350 million servings by 2022. Acecook estimates cup noodles will account for 9 percent of its sales in the country by then.

    Prior to creating the instant-noodle buffet concept, Acecook Vietnam entered the retail market with its Japanese restaurant chain Ringer Hut.

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  • Vietnam to purchase more power from Laos

    Vietnam to purchase more power from Laos

    National utility Vietnam Electricity (EVN) has signed three memoranda to purchase power from Laotian companies amid expected energy shortages.

    EVN will buy power from two hydropower plants and one coal-fired power plant in neighboring country Laos starting 2024, according to the memorandums of understanding signed Sunday.

    The 84-megawatt Nam Yeuang hydropower plant and 300-megawatt Nam Phan coal-fired thermal power plant developed by Phongsubthavy Group are set to transmit electricity to Vietnam starting 2024 and 2025.

    Another hydropower plant, Nam Neun 1, with a capacity of 124-megawatt and developed by Kong Sup Hydro Development of Nam Neun 1 and Nam Neun 3, will also start delivering power to Vietnam in those two years.

    EVN in January signed five deals with two Laotian companies to purchase 1.5 billion kilowatt-hours of power each year in 2021 and 2022.

    The Ministry of Industry and Trade had earlier warned of power shortages of 3.7 billion kWh in 2021 and nearly 10 billion kWh the following year, as the construction of new thermal and gas-fired plants fall behind schedule.

    2023 will be the most stressful with the shortage expected to be around 15 billion kWh. From then on, it will decrease, with shortages expected to drop to 7 billion kWh and 3.5 billion kWh in 2024 and 2025 respectively.

    The ministry stated the only way out is to import more from Laos and China, although this is only a band-aid solution. In the long run, it would be necessary to speed up work on large power generation projects, it added.

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  • Vietcombank set for lower profit as lending slows

    Vietcombank set for lower profit as lending slows

    Vietcombank’s profits are set to decline for the first time since 2013 due to slower credit growth amid the Covid-19 pandemic, a brokerage forecast.

    The country’s most profitable lender’s pre-tax profit could fall by 1.6 percent to VND22.75 trillion ($984 billion) this year after credit growth in the first nine months virtually halved year-on-year to 6.5 percent, RongViet Securities Corporation (VDSC) in Ho Chi Minh City said in a note.

    Provision for bad debts in the period rose 25 percent to VND6 trillion as companies suspended business.

    Its investment in securities resulted in a loss of VND14.5 billion as against a profit of VND116.5 billion last year.

    RongViet forecast 16 percent growth in pre-tax profit next year at VND26.37 trillion if the pandemic is under control by then.

    The bank signed an exclusive bancassurance deal with insurance firm FWD, which will give it $400 million in prepaid fees for the next five years.

    That will help increase the bank’s top line this quarter by 23 percent year-on-year, the brokerage said.

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  • Vietnam rationalizes tax regime for ride-hailing companies, to treat them as transporters

    Vietnam rationalizes tax regime for ride-hailing companies, to treat them as transporters

    Vietnam has imposed a 10-percent value-added tax for each trip by a ride-hailing company vehicle as it seeks to create a level playing field for traditional taxi firms.

    According to a new decree, with effect from December 5, the tax will have to be paid on the full fare unlike earlier when companies paid the 10 percent rate only on their share of the fare after paying off the driver.

    Thus, as Grab drivers get to keep 80 percent of the fare, the company only pays 10 percent tax on its 20 percent income. The driver pays 3 percent VAT on his 80 percent.

    The new tax rate is thus more than double the old one of around 4.4 percent, and according to Grab’s calculation, drivers’ income would have been reduced by around 7.3 percent.

    It has hiked its fares by 5-6 percent to reduce drivers’ loss of income to around 1 percent, a spokesperson said.

    Vietnamese officials have long been pondering whether ride-hailing companies are technology service providers or transport companies, but the new decree makes it clear they are the latter.

    Ta Thi Phuong Lan, deputy head of the department of tax administration for small and medium enterprises and individuals, said VAT rates for companies like Grab and Gojek have hitherto been too low and tax authorities need to raise it to the correct level.

    Luong Huy Ha, CEO of legal consulting firm Lawkey Vietnam, said the 10 percent rate is appropriate for ride-hailing firms since they operate like transport companies.

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  • Vietnamese telcos begin testing 5G services in earnest

    Vietnamese telcos begin testing 5G services in earnest

    Vietnam’s three major telecom companies are racing to test 5G services to achieve the government’s goal of making the country one of the earliest to adopt the technology.

    State-owned Vinaphone last week became the first to conduct 5G commercial tests in both Ho Chi Minh City and Hanoi.

    In Hanoi, VnExpress reporters using 5G devices were able to reach download speeds of 721 megabit per second (Mbps), or 10 times higher than 4G speeds. In HCMC, it reached 1,000 Mbps, with downloading a 1.16 gigabyte (GB) app taking around 34 seconds.

    Vinaphone also unveiled its 5G routers developed in partnership with Finland’s Nokia.

    The device collects 5G waves and broadcasts it as wifi signals, enabling Internet use in households without the need for fiber-optic cables.

    Military-run Viettel commercially tested its 5G broadcast in Hanoi on November 30, achieving 10 times the download speeds of 4G when the user is in one place and five times when traveling in a vehicle.

    Viettel has put up 100 base stations in the city’s three downtown districts, and users with 5G devices can start experiencing the technology without the need to change their sim cards.

    Of the 100 stations, it produced 15 in-house and bought the rest from Sweden’s Ericsson.

    The company plans to expand to Da Nang and HCMC soon.

    Le Dang Dung, the chairman of the company, said when 5G transmission is stable it could help doctors perform surgeries through the Internet and factories could be completely automated.

    Another state-owned telecom firm, MobiFone, began commercially testing 5G services in HCMC on November 27, achieving average speeds of 600-800 Mbps, going up to 1,500 Mbps.

    The company plans to install 50 stations in the city this month.

    But it will take time for smartphone makers and networks to perfect 5G operations.

    Some Huawei, Xiaomi, Asus, Nokia, and Oppo devices can use 5G, but Samsung devices have to wait until the end of the year at least, and it is unclear when iPhone devices will be able to connect in Vietnam.

    The subscription rate is a concern among users. Currently, operators are providing free data to promote the new technology, but it is unclear what the tariffs will be.

    During the commercial test period, the Ministry of Information and Communications has limited the rates to the same level as for 4G, but operators can later change them.

    Pham Ngoc Tu, head of Vinaphone’s services research and development department, said it is still too early to determine 5G rates, and the company needs to establish around 50,000 stations to calculate prices.

    Communications minister Nguyen Manh Hung said in 2018 that Vietnam would be one of the first countries in the world to launch 5G services.

    It was seven or eight years behind in adopting 3G and 4G technologies, but not with 5G, he promised last month, adding that it would be widely available in the country from next year.

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  • Banks continue to cut deposit interest rates

    Banks continue to cut deposit interest rates

    With the Covid-19 pandemic acting as a drag on credit growth, banks are continuing to cut deposit interest rates.

    State-owned lenders BIDV, Agribank and VietinBank this week reduced their 12-month rates by 0.2 percentage points to 5.6 percent.

    The other “Big 4” state-owned lender, Vietcombank, kept its 12-month rate unchanged at 5.8 percent but cut the 24-month and 36-month rates by 0.2 percentage points to 5.7 percent and 5.4 percent.

    The largest private lender, Techcombank, reduced its 12-month rate by 0.4 percentage points to 4.5-5 percent depending on the deposit amount.

    The rates have thus dropped by 0.4 percentage points within two months.

    Banks have reported high liquidity but difficulty lending as the pandemic hits businesses.

    Banking credit growth in the first nine months of this year was just 5.12 percent, far below the double-digit figures recorded of the last three years, according to the General Statistics Office.

    In August the State Bank of Vietnam revised its credit growth target for this year from 14 to 10.1 percent. It has also cut its policy rates four times so far this year to pump-prime the economy.

  • Sugar producers accuse Thai firms of dumping

    Sugar producers accuse Thai firms of dumping

    Thai companies are allegedly dumping sugar in Vietnam and hurting farmers, according to Vietnamese producers.

    Nguyen Van Loc, general secretary of the Vietnam Sugarcane and Sugar Association, said citing figures from Thailand’s Office of Cane and Sugar Board the average export price of Thai raw and refined sugar is $334 per ton though the cost of sugarcane alone to produce a ton is $410.

    The Thai government in April unveiled a support package of $325 million to sugarcane farmers hit by drought though Brazil had earlier filed a complaint to the World Trade Organization that Thailand had given support to cane growers that was inconsistent with international trade agreements, Loc said at a forum on Monday.

    A decree issued by the Thai government in March showed signs that it was limiting imports to protect domestic producers, he said.

    The influx of cheap Thai sugar is hurting Vietnamese companies and farmers.

    Tran Ngoc Hieu, CEO of Soc Trang Sugar Jsc in the southern province of the same name, said the area under sugarcane in his province has dropped by over 71 percent since 2017 to 2,400 hectares, and is set to fall to 2,000 hectares next year.

    Annual production has fallen 64 percent to 170,000 tons this year, he said. The competition from Thai sugar is the main reason for the declining figures, he added.

    Thai sugar is also smuggled into Vietnam, and whenever smuggled goods are seized, domestic sugar sales rise.

    Tran Thi Yen, a sugarcane farmer in the central province of Phu Yen, said: “Many sugarcane farmers have reduced their farming area or abandoned the farming due to losses.”

    The Trade Remedies Authority of Vietnam is conducting anti-dumping and anti-subsidy investigations into Thai sugar.

    Under ASEAN commitments, Vietnam has to allow unlimited sugar imports from member countries at 5 percent tariff.

    Imports of sugarcane in the first nine months surged five fold year-on-year to 1.06 million tons, with nearly 90 percent of it from Thailand, according to the Trade Remedies Authority.

  • Digital payment firm Vietnam’s second startup unicorn

    Digital payment firm Vietnam’s second startup unicorn

    VNPay has become the second unicorn startup in Vietnam and one of 12 companies in Southeast Asia with a valuation of $1 billion.

    The payment company was listed as a unicorn in the recent “e-Conomy SEA 2020” report by Google and its partners, alongside well known firms like Indonesia’s ride-hailing firm Gojek and Singapore’s e-commerce platform Lazada.

    VNPay, which manages a network of payment systems using QR codes in major cities, is currently partnering with over 40 banks and 20,000 companies. The company has over 15 million monthly users who access its app to transfer money, pay utility bills and buy bus tickets.

    The company was one of the startups that attracted the highest investments in the Southeast Asian fintech industry last year, with a total of $1.7 billion being poured into this industry, up 40 percent from 2018, the Google report said.

    VNPay reportedly received $300 million from Japan’s Softbank Vision Fund and Singapore’s sovereign wealth fund GIC last year.

    The first Vietnamese startup with a valuation of over $1 billion was tech firm VNG in 2014. Its valuation has now increased by over 50 percent to $1.5-1.7 billion.

    Vietnam targets having five unicorn tech firms by 2025 and 10 by 2030 as part of its Industry 4.0 advancement plans, the Ministry of Planning and Investment said in a report last year.

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  • Thai company buys Vietnam solar farm

    Thai company buys Vietnam solar farm

    Thai energy firm Gunkul Engineering Plc has acquired the 50-megawatt Phong Dien II solar power plant in the central Thua Thien Hue Province for $39.9 million.

    The plant is set to begin commercial power generation on December 15 with a feed-in tariff of 7.09 U.S. cents per kilowatt-hour for 20 years.

    The acquisition is part of the company’s plan to expand in Southeast Asia in the renewable energy sector, which it says has low risk and high growth potential

    Other Thai investors have also made moves to buy solar power plants in Vietnam, taking advantage of the country’s incentive feed-in tariffs to promote solar energy amid growing demand for electricity.

    Other Thai energy firms have also been busy in Vietnam.

    Gulf Group increased its ownership of two solar farms in the southern province of Tay Ninh from 49 percent to 90 percent during the second quarter of this year.

    Super Energy Corporation has invested $457 million in four solar power plants in southern Vietnam.

    Power production by Vietnam’s 100 odd solar plants surged 2.3 times year-on-year in the first 10 months to 7.95 billion kilowatt-hours, according to Vietnam Electricity.

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  • Startups need partnerships to participate in bigger ecosystems

    Startups need partnerships to participate in bigger ecosystems

    Vietnamese startups need to expand their partnership network with domestic and regional firms for functioning deeper in big firms’ ecosystems, industry insiders say.

    Nguyen Anh Duc, CEO of retail chain Saigon Co.op, said among its 2,500 partners and suppliers in ASEAN, nearly 60 percent are young entrepreneurs in Vietnam who contribute about 28 percent of Saigon Co.op’s annual revenues.

    However, the contribution of young entrepreneurs to the company has been falling in recent years, he said Monday at the ASEAN Young Entrepreneur Carnival held in Hanoi.

    Saigon Co.op is constantly looking to improve it ecosystem and expand its market size, and for this, it needs more contributions from young entrepreneurs, Duc said.

    “There are gaps in the business environment among ASEAN countries, and young entrepreneurs need to fill those,” he said, adding that this process will lead to the creation of more unicorns in Vietnam and other ASEAN countries.

    Other forum participants said Vietnamese startups need to implement their ideas faster in the modern market to improve their ecosystems.

    Nguyen Dang Quynh Anh, chief operating officer of media giant Yeah1 Group, said a key factor in improving a company’s ecosystem is digital transformation, which requires young entrepreneurs to make quick decisions to make their services and products match the demand of modern customers.

    The pandemic will create new shopping habits among consumers who now are more familiar with sitting at home and ordering products to be delivered to their doorstep, and startups need to take advantage of this new trend to expand their market, she added.

    Although one of the biggest challenges startups face in expanding their network is mobilizing funds, experts say that there are many funding sources available now for young entrepreneurs with potential.

    Nguyen Phi Van, chairwoman of startup support organization Vietnam Angel Network, said that a group of angel investors in ASEAN this year has established a financial company to support startups with the biggest potentials in the region. So, if a Vietnamese and a Malaysian investor decide to fund a startup, it will be able sell its products to both markets.

    “Vietnam is currently one of the markets receiving great attention from investors in ASEAN thanks to its growth potential,” Van said.

    Investment in Vietnamese tech startups in the first six months fell 22 percent year-on-year to $222 millionfrom 40 dealsdue to the Covid-19 pandemic, according to a report by Ho Chi Minh City-based venture capital firm Do Ventures.

    Among six major economies in Southeast Asia, Vietnam accounted for 16 percent of the total investment, ranking third behind Singapore (37 percent) and Indonesia (30 percent), it added.

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  • Vietnam wants to cut logistics cost to improve goods competitiveness

    Vietnam wants to cut logistics cost to improve goods competitiveness

    The government wants its agencies and businesses to reduce logistics cost to enhance the competitiveness of the country’s goods, Deputy Prime Minister Trinh Dinh Dung has said.

    Speaking on Thursday at the Vietnam Logistics Forum, he said the cost for logistics remains high, leading to higher product costs and lower competitive advantages for Vietnamese goods and its economy.

    Heightened costs stem from reliance on land-based transport and inefficient delivery systems. Take the Hai Phong – Bac Ninh waterway for example. The waterway allows ships with a capacity of 120 TEU (20-foot equivalent units), and they can cover the distance in 8 to 11 hours, three times longer than by road, but at 20 percent lower cost, said Dao Trong Khoa, vice president of the Vietnam Logistics Business Association.

    Dung said the goal is to double logistics services’ share of GDP to 8-10 percent and total logistics costs to 16-20 percent of GDP. To achieve the targets, unnecessary procedures need to be immediately eliminated, he added.

    Khoa said it is necessary to promote the use of digital transformation in logistics via integrating blockchain and artificial intelligence technologies to existing digital platforms for transport and port and warehouse management.

    He underlined the importance of developing international rail links and waterways in the northern Red River Delta and southern Mekong River Delta. These would help reduce costs for logistics service providers, manufacturers and import-export companies.

    The cost of logistics services in Vietnam in early 2019 accounted for 25 percent of the country’s GDP, while the rate was just 9.5 percent in the U.S, 11 percent in Japan, 16 percent in South Korea, and 21.6 percent in China, according to the Vietnam Chamber of Commerce and Industry.

    According to the Vietnam Logistics Business Association’s latest survey, there are around 30,000 logistics companies in the country, including 4,000 international ones.

    The industry has been growing at 12-14 percent annually and is now worth $40-42 billion.

  • Vietnam leads in number of accounts removed by Facebook

    Vietnam leads in number of accounts removed by Facebook

    Facebook has removed 290 fake accounts in Vietnam so far this year, making the country top in number of account cancellations.

    Of those fake accounts, some had forged that of the Health Ministry to post fake news about the Covid-19 pandemic.

    The removals were made via coordination between Facebook and the authorities of Vietnam, Le Quang Tu Do, deputy head of the Authority of Broadcasting and Electronic Information under the Ministry of Information and Communications, told a conference in HCMC on Friday.

    Aside from the fake accounts, Facebook also removed 330 pages advertising online games and gambling as well as 2,200 links that promote trading of illegal products and services.

    In the past year, Vietnam has led the world in terms of the number of fake accounts being removed and violating posts being deleted by Facebook, Do said.

    Aside from Facebook, the authority had also worked with YouTube to either remove channels with toxic, offending and anti-government contents or block advertisements for them.

    In the year to date, more than 29,000 YouTube videos and 24 accounts have been removed.

    Previously, YouTube only removed or blocked ads for channels whose owners had been prosecuted in Vietnam but now, it will do the same for all videos deemed to have toxic contents by authorities, he said.

    Vietnam has so far licensed 800 social media platforms and the number of social media accounts has risen from 47 million in 2018 to 96 million this year, Minister Nguyen Manh Hung told legislators earlier this month.

    Facebook and YouTube account for the biggest amount of users in the country.

    In 2018, there were about 54.7 million internet users in Vietnam.

    The figure rose to 59.2 million last year and is estimated at 63.6 million this year. By 2023, it was forecasted to be 75.7 million, according to German data portal Statista.

    Statista also said Facebook had removed almost 1.5 billion fake accounts in the second quarter this year, down from 1.7 billion fake accounts in the preceding quarter.

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  • Hanoi-HCMC world’s second busiest domestic air route

    Hanoi-HCMC world’s second busiest domestic air route

    The Hanoi-HCMC route is the world’s second-busiest in November after South Korea’s Jeju-Seoul, according to British aviation analysis company OAG.

    The flight route connecting Vietnam’s two largest cities, which takes around two hours, has nearly 893,000 seats scheduled for November, while the route between South Korean capital Seoul and Jeju Island has 1.3 million.

    The route between Chinese capital Beijing and Shanghai’s Hongqiao Airport is third with 768,184 seats, followed by the two routes in Japan –Sapporo-Tokyo Hanenda and Fukuoka-Tokyo Hanenda.

    Of the top 10 busiest domestic routes in November, China and Japan have four each.

    “International flights have felt the impact most acutely due to border controls and mandatory quarantine requirements, domestic routes are starting to recover as people are generally able to move more freely within their countries,” OAG said.

    Asia is a standout, home to all 10 of the world’s busiest domestic routes this month, the company added.

    Vietnam has reopened six international flights to mainland China, Japan, South Korea and Taiwan from September 15, followed by Laos, Cambodia from September 22. It had suspended all international routes in March to contain the Covid-19 outbreak in the country.

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