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Tag: Vietnam

  • Apple market share plunges to year’s lowest level in Vietnam

    Apple market share plunges to year’s lowest level in Vietnam

    Apple’s market share fell to 5.6 percent in September, its lowest level this year, with buyers apparently waiting for its next product.

    This kept its iPhone in fourth place, behind Xiaomi, which had a 10.7 percent share, according to a report by market research firm GfK.

    Samsung remained on top (40.7 percent) followed by Oppo (24 percent). Vivo was in fifth place (5.4 percent), selling 1.07 million phones.

    Xiaomi, which held fourth place in June, saw consistent growth since then to climb into third place in July, where it has remained.

    This was the third straight month of fall in market share for Apple, which was down 1.6 percentage points from June and 2.4 percentage points from January.

    Industry insiders said the Vietnamese tendency to wait for the upcoming iPhone model, set to be released in early November, is the reason for the falling sales, besides intense competition from Samsung and Oppo with their new products and promotions.

    On Wednesday major smartphone seller Mobile World said 10,689 people have put down deposits of VND1 million ($43.25) to prebook the iPhone 11, iPhone 11 Pro or iPhone 11 Pro Max.

    Another smartphone retailer, FPT Shop, has received 16,390 bookings.

    The two authorized Apple resellers are scheduled to deliver the phones on November 11.

    In the first nine months, Samsung and Oppo had market shares of 39.6 percent and 28.7 percent respectively followed by Apple (7 percent) and Xiaomi (5.9 percent), according to the report.

    A report released in January by We Are Social, a social media marketing and advertising agency, said around 75 million people in Vietnam, or almost 80 percent of its population, use smartphones.

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  • VinSmart to launch 5G smartphones next year

    VinSmart to launch 5G smartphones next year

    Smartphone maker VinSmart says it will launch its first 5G smartphone next July, and use its own 5G stations and equipment.

    “We have built a lab for researching and developing 5G smartphones and other 5G telecom equipment,” Ngo Hoang Anh, head of the company’s embedded software department, said at a forum Wednesday.

    The company is also partnering with U.S. tech giants Cisco and Intel to develop the 5G technology, Anh said. In June, VinSmart signed partnerships with Japan’s Fujitsu and the U.S.’s Qualcomm to develop its 5G smartphones.

    VinSmart has requested the Ministry of Information and Communications for bandwidth to test its 5G stations next August, he added.

    Tech expert Pham Hong Phuoc said that VinSmart developing 5G services is a rational move, as the local market is set to see more 5G smartphones this year and the next, and Vietnam aims to commercialize 5G next year.

    VinSmart’s announcement follows similar moves by telecom giant Viettel, which begun testing 5G broadcasting in September, and its competitor VNPT, which has announced plans to do so.

    No 5G smartphone has been manufactured or officially distributed in Vietnam so far, instead, they are hand-carried on overseas flights.

    Minister of Information and Communications Nguyen Manh Hung said last year that Vietnam should be one of the first countries in the world to launch 5G.

    5G is said to offer speeds 100 times faster than 4G, primarily used for smartphones and other similar devices. 5G is also expected to support new applications like remote medical procedures and autonomous driving.

  • Viettel Global posts $67 mln profit

    Viettel Global posts $67 mln profit

    Viettel Global has posted pre-tax profits of VND1.55 trillion ($67.1 million) this year, after seeing losses in Jan-Sept last year.

    The turnaround has happened thanks to strong revenues in Southeast Asia. Half of the telecom giant’s VND12.4 trillion ($537.3 million) revenue in the first nine months came from Southeast Asia, which went up 24 percent year on year, followed by Africa and Latin America, according to the company’s Q3 financial report.

    Its Metfone network in Cambodia saw after-tax profits go up 91 percent to VND672 billion ($29.1 million), while that of its Natcom network in Haiti rose 28 percent to VND261 billion ($11.3 million).

    The company’s VGI stock, listed on Vietnam’s Unlisted Public Companies Market (UPCoM), had risen 140 percent to VND32,400 ($1.4) from the beginning of the year as of Thursday, marking a market cap of over VND98.6 trillion ($4.27 billion).

    Viettel Global was established in 2006 to spread military-run Viettel Group’s presence in foreign markets. It currently operates in ten markets, namely Cambodia, Laos, Timor Leste, Mozambique, Burundi, Haiti, Peru, Cameroon, Tanzania and Myanmar.

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  • Ha Long casino operator mostly dependent on lodging income

    Ha Long casino operator mostly dependent on lodging income

    The operator of The Royal Casino in Ha Long Town posted VND8 billion ($345,000) in Q3 post-tax profit, mostly from its lodging business.

    This is the first quarterly profit that the company, Royal International, has made, even though all four quarters last year ended in the black, its third-quarter financial report shows.

    However, the company’s casino business still suffers losses. January-September casino revenue at The Royal Casino, the largest in the northern Quang Ninh Province, was just VND60 billion ($2.6 million), or 36.8 percent of the total, with the rest coming from its hotel and villas.

    As the casino business is seasonal, the revenue generated from it is unstable as it depends on the number of players and on luck, the company said.

    Another reason is the increasing number of casinos in neighboring countries such as Cambodia, the Philippines, and Myanmar, scattering potential gamblers.

    The company plans to find a partner this year to invest in a 33-story twin-tower hotel to increase revenues from lodging, as well as karaoke, massage and other services.

    In the first nine months of this year, Royal International’s revenue was VND163 billion ($7 million), less than half of the year’s target.

    It suffered a loss of over VND70 billion ($3 million) after-tax, compared to a profit of VND18 billion ($776,000) in the same period last year.

    The company’s still some distance away from achieving its target of VND38 billion ($1.64 million) in after-tax profit for the whole year.

    Vietnam has seven casinos, six of which are open only to foreign passport holders

     The government still treats gambling as a social evil, although it has loosened its restrictions on it in recent years.

    Last year the government approved a three-year trial project allowing Vietnamese residents to enter a casino on Phu Quoc Island on a pilot basis if they can meet certain conditions.

    Vietnamese who want to gamble must be over 21 years, earn a minimum of VND10 million ($430) a month and have no criminal record or objections from family. The entry fee is VND1 million ($43) for 24 hours or VND25 million ($1,077) a month.

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  • Sabeco makes $3.9 million a day from beer sales

    Sabeco makes $3.9 million a day from beer sales

    Vietnam’s biggest brewer Sabeco reaped VND90 billion ($3.87 million) in revenue a day in January-September, a double-digit rise. In its latest financial report, the Saigon Beer Alcohol Beverage Corp reported revenues of over VND28.3 trillion ($1.22 billion) in nine months, up 10 percent year-on-year. Revenue from beer in the period accounted for 86 percent of total, or VND24.3 trillion ($1.04 billion).

    In the third quarter alone, post-tax profit was highest among all brewers in Vietnam at almost VND1.46 trillion ($62.76 million), up over 40 percent year-on-year.

    billion VNDSabeco business resultsRevenuePost-tax profitQ1-2016Q2-2016Q3-2016Q4-2016Q1-2017Q2-2017Q3-2017Q4-2017Q1-2018Q2-2018Q3-2018Q4-2018Q1-2019Q2-2019Q3-201902.5k5k7.5k10k12.5kSabeco

    Sabeco has paid almost VND8.2 trillion ($352.46 million) in taxes this year. Its total capital as of Q3 was VND24.78 trillion ($1.07 billion), up 10.7 percent from the beginning of the year.

    Sabeco is owned 53.59 percent by Vietnam Beverage, a subsidiary of Thai beverage company ThaiBev. The Vietnamese government, represented by the Ministry of Industry and Trade, owns a 36 percent stake in the company.

    ThaiBev has said earlier that Sabeco is its key growth driver in Southeast Asia as the region’s consumption slows down.

    Vietnam consumed 4.1 billion liters of beer in 2017, making it the biggest alcohol market in Southeast Asia and the third biggest in Asia after Japan and China, according to the Ministry of Health.

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  • Vietnam aircraft fleet to quadruple in 20 years

    Vietnam aircraft fleet to quadruple in 20 years

    Vietnam’s aircraft fleet, at 200 now, will quadruple by 2038 as air travel demand increases and the market sees new players.

    These figures were cited by Darren Hulst, aircraft manufacturer Boeing’s marketing director for China & Northeast Asia, at a recent press briefing.

    The current number of aircraft in the country is set to double in the next two years. Single-aisle aircraft are set to be the main type used for Vietnam’s domestic and regional flights, Hulst said.

    He noted that aviation growth has been rapid in Vietnam for several years now. In 2009, all Vietnamese airlines provided 800,000 seats a month, but by this year, the figure had reached 3.3 million.

    In the last five years, the number of passengers taking flights has tripled and the number of aircraft doubled, he added.

    Southeast Asia will need 4,500 new aircraft by 2038, and Vietnam is set to account for a large portion of that demand, Hulst said.

    Vietnam now has six domestic carriers and three companies that have applied for aviation permits.

    Last year, Vietnam’s 21 state-run airports served 103.5 million passengers, up 11 percent year-on-year, and the figure is set to rise to 112 million this year, according to the Airports Corporation of Vietnam.

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  • Giant Vietnam restaurant chain Mon Hue shuts down

    Giant Vietnam restaurant chain Mon Hue shuts down

    Vietnam restaurant chain Mon Hue has closed down without notice, evidently unable to pay its debt.

    Restaurants under the Mon Hue brand along with sister chains including Pho Ong Hung and 99 House of Pho, have been shuttered and the company’s websites and social media channels have been switched off. Many of the abandoned stores in downtown Ho Chi Minh City already have for-lease signs on them.

    The company’s headquarters has been abandoned.

    The exact number of stores in the company’s network is hard to clarify. By the end of 2015 the company operated 110 and then embarked on a massive expansion program which may have peaked at 200 before closures began. Local media reported that 80 closed this week, but there is evidence that a long-term cull has been underway for at least several months.

    Several Mon Hue employees and suppliers have told local news media that they haven’t been paid “for months”.

    “Since about a week ago, the company stopped taking our supplies or paying for them. We couldn’t contact the procurement managers, directors of Mon Hue or its owner, Huy Nhat,” said Thuan, a supplier of the restaurant.

    DealStreet Asia reported today that private equity investors in Huy Vietnam have commenced a lawsuit in People’s Court of HCMC on behalf of the business against its founder and chairman Huy Nhat.

    According to VN Express, Mon Hue achieved a profit of VND300 million ($12,950) in 2016, but since then losses have accumulated to almost VND107 billion ($4.62 million) as expansion costs rose much faster than revenue.

    Meanwhile, dozens of the restaurant group’s suppliers owed money gathered in front of Ho Chi Minh City police headquarters to file complaints against the company, alleging Mon Hue had committed fraud.

    Staff, landlords, and suppliers have been left unpaid. Trade suppliers are owed at least US$430,000 including a production company whose $55,940 debt traces back three months. Others reduced their exposure by ceasing supplies but a promised installment repayment plan by Mon Huse was allegedly not honored.

    In addition to enormous debts, Mon Hue Restaurant accounts have been frozen by Vietnam’s tax authority.

    Mon Hue was operated by Nha hang Mon Hue Co, which is now wholly owned by Hong Kong-registered Huy Vietnam.

    In late 2015, Huy Vietnam announced it was planning to list on the Hong Kong Stock Exchange.  At the time it had already attracted US$65 million in investment from global investors such as AIF Capital Asia, Fortress Capital Asset Management, Welkin Capital, Prosperous Alliance and Templeton Emerging Markets Group. The company reported estimated it could raise up to $100 million from an IPO to fund expansion both inside and outside Vietnam. That plan was later abandoned.

  • Takashimaya bullish about profit opportunities in Asia

    Takashimaya bullish about profit opportunities in Asia

    Japanese department-store operator Takashimaya is banking on its Vietnam and Thailand flagships to drive growth this year as it seeks to achieve profitability in its Southeast Asian business.

    To date, Singapore has been the sole profitable store outside Japan, but this financial year the Takashimaya Vietnam store in the Saigon Centre in Ho Chi Minh City is expected to produce 100 million yen (US$919,000) in operating profit and the company’s president Yoshio Murata told Nikkei in an interview he sees Vietnam as “another Singapore” in the future.

    Takashimaya opened its first Southeast Asian store in 2013 in Singapore. Located in the heart of the Orchard Road precinct, that store took several years to turn into the black but now drives the retailer’s business in the region. Last year it reportedly earned 3 billion yen (US$27.2 million) and this year is reportedly on track to achieve 4.8 billion yen ($44 million) in operating profit.

    The Vietnam store opened in 2016 and struggled initially before the company refocused its offer by stocking more mid-market brands, a strategy that already seems to be working. The company is believed to be exploring an opportunity to open a second store in the capital Hanoi where it is investing in an urban-development project including a bilingual school.

    Takashimaya’s most recent store in the region is at the IconSiam shopping centre in Bangkok, which opened last November.

    In an interview with the Nikkei last week, Murata said the success of that store depended in part on the completion of a delayed BTS railway line extension which would deliver people to the centre’s front door. He expects the store will lose about 900 million yen ($8.2 million) this financial year.

    As the company learned in Vietnam, the key to its success is likely to lie in stocking more mid-range products rather than focusing purely on the luxury sector as the train will bring more middle-class shoppers.

    “Upper-middle product ranges like menswear are not satisfactory,” Murata said.

    In June of this year, Takashimaya announced it would close its Shanghai store, opened in 2012, its lone post in China. But that decision was reversed when local government authorities adjusted the rent to make the store viable. Takashimaya now expects it to turn a profit in 2021.

    Meanwhile, the company is playing down widespread reports of plans to expand into other major Asian cities, including Manila – where rival Mitsukoshi will open next year – Kuala Lumpur and Jakarta.

    Murata confirmed to Nikkei that the company had been approached to open in new markets but said its focus for now was on its existing four stores.

  • Vietnamese carmaking startup VinFast gets $950 million credit line

    Vietnamese carmaking startup VinFast gets $950 million credit line

    VinFast, which aims to become Vietnam’s first domestic car manufacturer, said it has secured a 12-year credit facility for as much as $950 million to help buy machinery and equipment from German suppliers.

    The company, a unit of Vietnam’s largest conglomerate Vingroup JSC, plans to have its first production models built under its own badge hit the streets next August. Vingroup has earmarked about $3.5 billion for the project.

    VinFast, led by former General Motors executive Jim DeLuca, showed off its BMW-based LUX A2.0 sedan and LUX SA2.0 crossover at the Paris auto show last week. Assembly is scheduled to begin next week year.

    Credit Suisse AG and HSBC were the lead arrangers and the financing agreement was guaranteed by German export credit agency Euler Hermes, Vingroup and Vinfast said in a statement.

    The statement also said that in August Vinfast completed syndication of a $400 million term loan facility led by four international banks.

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  • Saigon retail rents rise

    Saigon retail rents rise

    Saigon retail rents are rising with space in the CBD hitting an average of US$135.50 per square meter in the third quarter, up by 5.8 percent year-on-year.

    According to a report by real-estate company CBRE, the average monthly rents outside the CBD were only US$35.80 per square meter, down 3.7 percent quarter on quarter.

    Saigon is commonly used to refer to the CBD, or District 1, of Ho Chi Minh City, Vietnam’s largest population center.

    As several shopping centers have witnessed renovation and tenant mix revision, abandoned retail space rates increase by 2.5 percent and 8 percent in CBD and non-CBD areas, respectively.

    Ho Chi Minh City has become attractive to many investors and developers as a growing number of international retailers have chosen the city for their Vietnam debut.

    The nation’s retail industry has also been drawing investment from offshore, with recent deals including Japanese apparel company Stripe International buying Vietnamese fashion brand Vascara, and a franchise agreement which will see South Korea’s CU convenience stores open next year. With the evolution of the industry, retail rents in Ho Chi Minh City are expected to continue to increase in the near future.

    The city is predicted to add a further 237,000sqm of new retail space next year, including a new Vincom Megamall project in District 9 but it has yet to be seen how the new supply will impact on Saigon retail rents.

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  • Contaminated water forces seven Vietnamese Starbucks stores to close

    Contaminated water forces seven Vietnamese Starbucks stores to close

    Coffee chain Starbucks has temporarily closed seven outlets in Hanoi, Vietnam as the city copes with serious oil contamination of its water supply.

    According to a customer service staff member, the Starbucks Hanoi stores are closed in areas where water comes from the Da River, including Cau Giay, Ha Dong and Nam Tu Liem districts. The coffee chain has not confirmed a reopening date.

    The contamination traces back to a truck seen dumping used oil into a mountain creek in Phu Minh Commune, Hoa Binh Province last week which has led to contaminated tap water for about 1 million Hanoi residents.

    While Starbucks is not alone in closing stores, other major coffee chains and eateries in the contaminated areas have arranged alternative sources of water and remain open.

    Local news media report that tap water has now passed safety tests, but Hanoi officials advise consumers against drinking or cooking with it.

    Meanwhile, there are widespread reports of bottled water prices soaring in the city as people rush to buy safe water. While tap water in Vietnam is not considered safe to drink it is generally acceptable to use it for cooking.

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  • Uniqlo to open first Vietnam store in Saigon

    Uniqlo to open first Vietnam store in Saigon

    Japanese casual wear retailer Uniqlo plans to open a 3,000-square-meter store in downtown HCMC at the end of this year.

    Its first store in the country, at Parkson Saigon Tourist Plaza in District 1, would be one of its biggest in Southeast Asia, the company said in a release. It will sell clothes for men, women and children.

    Uniqlo earlier this month established its Vietnam business with a charter capital of $8.8 million, with apparel company Fast Retailing Singapore owning a 75 percent stake and Japan’s Mitsubishi Corporation the rest.

    Uniqlo, which is already in Singapore, Malaysia, Thailand, the Philippines, and Indonesia in Southeast Asia, had 213 stores in the region by the end of last year and plans to have 400 by 2022. It now has over 2,200 stores in 24 countries and territories.

    Uniqlo’s arrival in Vietnam is sure to intensify competition between foreign brands like Zara and H&M, who came two years ago and have outlets at major malls in both HCMC and Hanoi.

    Vietnam’s fashion market is estimated to grow to more than $3.8 billion this year and over $5 billion by 2021, according to BMI Research.

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  • Textile sector stuck at bottom of value chain

    Textile sector stuck at bottom of value chain

    The textile industry, Vietnam’s key exporter, faces hurdles to further development since it is stuck in the low-value segment of the supply chain.

    Nguyen Thi Xuan Thuy, director of the Ministry of Industry and Trade’s Centre for Supporting Industrial Development, said at a recent forum that Vietnam’s textile industry is still dependent on import of production inputs.

    The country plans to have 30,000-76,000 hectares under cotton crops in the 2015-2020 period but had only 1,000 ha in 2017, and cotton production that year was only 1,000 tons against a target of 20,000-60,000 tons, she said.

    The country targets annual fabric production of one billion meters but there is no allocation of funds for it, and so most material has to be imported for production, Thuy noted.

    Vietnam imports half the raw material for production from China, and this means its textile products would not enjoy zero import tariffs under the trade pacts it has signed, she added.

    But local feedstock producers struggle to sell domestically. Vu Huy Dong, CEO of thread producer Dam San, said 90 percent of his output is exported to China.

    “Chinese importers buy the threads, dye them and sell them back to Vietnam at higher prices.”

    Textile firms are concerned that Vietnam’s environmental protection regulations create challenges for businesses.

    Pham Xuan Trinh, CEO of HCMC-based textile firm Phong Phu Corp, said some localities only provide 700 cubic meters of water a day to his company while the need is three or four times that.

    Government officials admitted that local authorities are reluctant to license textile production, especially dyeing, due to fear of pollution.

    Thuy said that Vietnam’s environment criteria for the textile industry are now even higher than Japan’s.

    Whether Vietnam continues to keep them to ensure clean manufacturing or lowers them to boost production of textile feedstock, there needs to be an orientation for development, she added.

    Vietnam exported $30.4 billion worth of textile products last year, up 16.6. percent from 2017, according to the General Statistics Office. It imported $12.9 billion worth of fabrics, up 13.5 percent.

  • Starbucks closes seven Hanoi stores over contaminated water

    Starbucks closes seven Hanoi stores over contaminated water

    Coffee shop giant Starbucks has temporarily closed seven stores in Hanoi’s southwestern districts over the ongoing oil contamination crisis.

    A customer service agent said Friday that the closed stores are located in Cau Giay, Ha Dong and Nam Tu Liem districts, all of which use water that comes from the Da River in Hoa Binh Province. No reopening date has been set.

    Other major coffee chains in the southwestern districts of Hanoi have remained open, with their managers saying, without elaborating, that they are getting clean water from a supplier.

    Like Starbucks, many restaurants and eateries in Hanoi are struggling to get clean water.

    Nghia, owner of a pho noodle stall in Hoang Mai District, said that he has spent hundreds of thousands of dong (VND100,000 = $4.3) on bottled water this week because the tap water smelled bad and could not be used for cooking.

    A buffalo-meat restaurant chain with outlets in affected areas mobilizes staff to work till midnight Wednesday to stock bottled water.

    In some areas, bottled water prices have increased 2-3 times due to high demand. The Vietnam Directorate of Market Surveillance has asked Hanoi authorities to stop merchants from overpricing bottled water.

    On Tuesday last week, a 2.5-ton truck was seen dumping used oil into a mountain creek in Phu Minh Commune, Hoa Binh Province. The oil spread and contaminated the tap water for about one million Hanoi residents.

    Tests of the smelly water by authorities later found that the level of styrene, an organic compound that is classified as “probably” carcinogenic, was 1.3-3.6 times higher than normal.

    On Thursday, Hanoi officials said the tap water samples collected Monday this year passed safety tests, but continued to advise against drinking or cooking with it.

  • Amazon has no specific time frame for Vietnam website

    Amazon has no specific time frame for Vietnam website

    A senior Amazon official says the firm sees Vietnam’s potential but has not decided on a time to launch services for Vietnamese buyers.

    Bernard Tay, head of Amazon Global Selling Southeast Asia, Australia and New Zealand, said at an event Thursday that the global e-commerce giant sees Vietnam has a potential market.

    He noted that after launching Amazon in Singapore, they would look at opportunities to expand their services to more countries, including Vietnam.

    Amazon Thursday established a team of specialists in Vietnam to support Vietnamese sellers in taking their products to global customers. The company stated that it sees the majority of Vietnamese businesses are small and medium enterprises with large demand for global sales.

    Many Vietnamese leather, footwear, handmade and consumer goods items are selling well on Amazon’s website, Tay said.

    Vietnamese sellers can reach up to 300 million Amazon accounts in 185 countries and territories. Amazon also has 175 fulfillment centers worldwide, he added.

    Bui Kim Thuy, owner of a textile company whose products are being sold on Amazon, said that the e-commerce giant has strict criteria on product origin and quality which Vietnamese sellers will have to meet.

    An apparel product that suits Vietnamese customers might not suit Americans, therefore Vietnamese sellers need to make careful research for international sales, she added.

    Amazon launched a Singapore website last week, the first in Southeast Asia. Vietnamese shoppers can access Amazon.com, but many products are not available for shipping to Vietnam, and those that are available typically involve high shipping fees.

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