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Tag: Vietnam

  • Bubble tea, the next gold mine

    Bubble tea, the next gold mine

    Investors are flocking into the bubble tea market since demand is booming across the country. Market researchers have found the market is growing at 20 per cent a year and reached US$300 million two years ago. There are over 100 brands already and many more famous names are flocking in.

    In large cities like HCM City and Hà Nội, it is easy to find bubble tea stores belonging to major brands like Alley, Gongcha, Phúc Long, Ten Ren, and Royaltea.

    There are also smaller stores with cheaper prices run by small business people.

    Seeing the demand, many coffee chains like Highlands and The Coffee House and restaurants have added bubble tea to their menu.

    Besides bubble tea simply being a popular drink for various age groups, the shops selling it have become a haunt for youngsters because of their facilities and decor.

    A spokesperson for a famous brand name, Gong Cha, said: “Competition in bubble tea market in Việt Nam is a marathon.

    “Bubble tea has established itself on the Vietnamese food and drink scene. Bubble tea shops are no longer just places selling beverages. They are places featuring a speciality totally different from traditional places like coffee stores and restaurants.”

    Brand expert Võ Văn Quang was quoted as saying by Người Lao Động (The Labourer) newspaper that the popular drink in Hong Kong and Taiwan has undergone many changes in the Vietnamese market with many toppings to match Vietnamese tastes.

    “Milk tea is now a popular drink among Vietnamese youth.”

    Most of the milk tea brands have come to Việt Nam as franchises, he said.

    “At prices of VNĐ30,000 to over VNĐ80,000, bubble tea is brining huge profits. That is why foreign brands are keen on franchising in Việt Nam.”

    A bubble tea shop is much cheaper to set up than a coffee shop while the profits are huge, he said.

    Dr Đào Duy Khương, a retail expert, said milk tea, unlike coffee and tea, targets youths in big cities, and this demographic’s consumption behaviour is trendy meaning investors should change their offerings frequently.

    It is not surprising several brands closed in recent times, he added.

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  • VinFast, South Korean firm to make batteries for EVs

    VinFast, South Korean firm to make batteries for EVs

    The joint venture will be located in the automaker’s factory in the southern port city of Hai Phong, where it will manufacture lithium-ion battery packs for VinFast’s electric scooters that are being made now, and for electric cars to be produced in the future, VinFast said in a statement.

    The factory, which will be built on a 2,000 square meter area, will employ Vietnamese workers who will be trained in technology provided by LG Chem.

    The automaker, a unit of Vietnam’s largest conglomerate Vingroup, rolled out its first made-in-Vietnam cars last month, the first steps in a $3.5 billion automaking venture.

    VinFast has recently sent its SUV and sedan to European and Asian countries for quality testing and is set to deliver preordered vehicles in the second and third quarter.

  • Japan revokes Vietnamese chili sauce for Safety Reasons

    Japan revokes Vietnamese chili sauce for Safety Reasons

    The Osaka Information Portal reported Tuesday that the bottles were imported from Vietnam to Japan by the Osaka-based Javis Co., Ltd last December, and sold to the Kobe-based ISC Industrial Co., Ltd. Javis Co., Ltd never mentioned that the imported chili sauce contained benzoic acid, which is banned from all chili sauce in Japan, before selling it to ISC Industrial Co., Ltd, the portal said.

    Japanese authorities determined that the bottles contained between 0.41 to 0.45 grams of benzoic acid per kilogram of chilli sauce, after suspicions arose that ISC Industrial Co., Ltd was violating the country’s laws on food safety and food labeling.

    The Masan Group, which produced the chili sauce under the brand name of Chin-su, said it never exported the chili sauce to either Javis Co,. Ltd or ISC Industrial Co. Ltd. It said it only exported the product to the United States, Australia, Russia, the Czech Republic, China and Taiwan.

    “As we have no chili sauce sample in hand right now, we have no official conclusion on the origins of the bottles. However, it is likely that they are either exclusive for the Vietnamese market, or their origins are unknown,” the group stated in a press release.

    Vietnam’s Ministry of Health has yet to receive any official statements from Japan about the Chin-su case, Tran Viet Nga, deputy head of the Food Safety Department, said Saturday. But it is taking steps to clarify the matter, she added.

    “Benzoic acid is allowed as a food preservative according to the Codex Alimentarius Commission (CAC), in which both Vietnam and Japan are members. In accordance to standards from the CAC, the levels of benzoic acid found in the chili sauce revoked by Japan were still within international standards,” she said.

    “Maybe Japan just has tougher requirements.”

    Japan bans benzoic acid in its chili sauce, but allows its presence in certain food products like syrup, margarine or soft drinks. Vietnam allows a maximum amount of one gram of benzoic acid per kilogram of chili sauce.

    The World Health Organization says a person can consume five milligrams of benzoic acid per kilogram of body weight daily without adverse health effects.

  • Parkson Vietnam Restyles Its Ho Chi Minh City flagship

    Parkson Vietnam Restyles Its Ho Chi Minh City flagship

    Parkson Vietnam has kicked off the renovation of its six-story Saigon Tourist Plaza flagship in downtown Ho Chi Minh City.

    Located on Le Thanh Ton, refurbishment of the first Parkson Vietnam store will be implemented progressively, floor by floor.

    During the project, the Parkson store will remain partially open for business.

    The company says the renovation will deliver a new look, new shopping experience featuring modern facilities, and a higher standard of service for shoppers.

    It says the new store design concept will turn the store into an all-in-one destination that offers a combination of shopping, food & beverage, and entertainment.

    New brands in fashion, beauty and lifestyle will be added.

    Ready to welcome Uniqlo?

    The first flagship store of Uniqlo Vietnam will be located in the revamped store.

    The Japanese fast-fashion retailer is reportedly set to occupy three levels of the building, facing the H&M store at Vincom on Dong Khoi Street.

    Uniqlo Vietnam will open doors sometime between September and November this year.

    The renovation of the Parkson Saigon Tourist store is understandable as the building is old and has been poorly managed for a long time.

    If the Japanese fast-fashion brand is really opening its first store there, it should rapidly increase traffic to the building.

    After 14 years of operation, Parkson Vietnam has closed five stores, including the last one in Hanoi.

    It now manages five stores, with three in Ho Chi Minh City, and one each in Hai Phong and Danang.

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  • Shop&Go chain showcases brutal retail practice with 1$ Price Tags

    Shop&Go chain showcases brutal retail practice with 1$ Price Tags

    Shop&Go became the newest loser in Vietnam’s retail market Monday when it was bought out by conglomerate Vingroup for $1.

    The company reported an aggregated loss of almost VND205 billion ($8.81 million) by 2016, the latest year for which figures are available. VinCommerce, the retail arm of Vingroup, took over its 87 stores and its debts in the latest deal.

    Vietnam’s retail market has become increasingly crowded with both local and international players over the last five years. Although experts have said that the market has a lot of growth potential, many businesses have quit or scaling back expansion plans.

    Coffee giant Trung Nguyen has twice attempted and failed with its G7 Mart and G7-Ministop.

    Super market chain Saigon Co.op established its first retail store Co.op Smiles in 2016 with the hope of opening 500 such outlets a year, but two years later, the number is around 100.

    Japanese convenience store chain FamilyMart previously said it wanted to have 1,000 stores by 2020, but it announced last year that it won’t invest in new stores. The number of its stores stay at 151.

    Vietnamese food company Vissan said early last year that it has closed nearly 60 of 100 convenience stores. Nguyen Ngoc An, CEO of Vissan, said that the stores had failed to attract a large number of customers.

    A senior manager of the Family Mart said that they “could no longer pour more resources into the chain.”

    Industry insiders say that retail chains fail to compete because they don’t have deep pockets to bear the losses. Pham Viet Anh, a strategic business expert, said that cash flow is among the most important factors in the retail business. If a company cannot collect enough revenue before it has to pay suppliers, its working capital gets eroded.

    “A retail company can rely on its debts with providers in the short term, but in the longer term, it needs to find a way to be profitable. If not, growing losses will eventually bankrupt it,” Anh said.

    Vietnam’s revenue from selling goods last year rose by 11.7 percent from 2017 to $142 billion, up 12.4 percent from 2017.

  • Cuckoo clock inspires Vietnam cafe

    Cuckoo clock inspires Vietnam cafe

    Design firm Tropical Space has built a coffee shop inspired by a cuckoo clock in Vietnamese seaside city Da Nang.

    The design, featured by Dezeen, features a brick structure with a house perched on top, with the coffee shop forming a single-storey base and the house extending out over the garden area. The local clay brick base is inset with vaulting arches surrounding a large courtyard and the glass-walled shop area.

    “Habits mean most people’s daily lives usually take place in functional spaces,” said the firm’s architects. “We have detached the walls that define these spaces to offer buffer space, urging people to leave their rooms and join together.”

    The house area, divided into three distinct blocks, feature spaces that can be closed off by small cuckoo clock-style wooden doors.

    The shells of perforated brickwork create cool, shaded spaces that admit natural light, and reflect other designs by the firm built in the region.

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  • Vietnam state steel company close to bankruptcy

    Vietnam state steel company close to bankruptcy

    In a recent letter to shareholders, Thai Nguyen Iron and Steel Jsc (TISCO) said it is facing “a financial crisis which could lead to bankruptcy if it is not saved by the government, banks and other authorities.” The charter capital of the company, one of the largest steel producers in Vietnam, was VND1.94 trillion ($83.6 million) last year but owner’s equity accounted for only 18 percent, which the company regards as a low ratio.

    With liabilities 4.65 times owner’s equity, TISCO said its capital structure is unstable.

    The company added it needs to increase owner’s equity and recover bad debts. The bad debts climbed to almost VND852 billion ($36.7 million) last year, of which the company said 46 percent could be recovered.

    One of the problems the company has been facing is the delay in a stop-start expansion project. The Government Inspectorate has listed it among 12 state-owned projects suffering major losses and with many violations of the law.

    The project first began in 2007 but stalled soon afterwards due to the global economic crisis. The original cost of expansion of VND3.84 trillion ($165.5 million) was increased to over VND8.1 trillion ($349 million) on the suggestion of Chinese contractors when it was restarted in 2009.

    But in 2012 it stalled again when TISCO faced a resources crunch, causing the China Metallurgical Group Corporation (MCC) to withdraw from the project.

    TISCO had paid MCC 92 percent of the contract value at the time, but much of the work was left incomplete, according to the Government Inspectorate.

    Machinery and equipment MCC delivered had rusted and become damaged after lying unused for long, the inspectors said.

    The government prohibited further investment of public funds in the company in 2016. Following this, sovereign wealth fund State Capital Investment Corporation (SCIC) pulled out its capital of VND1 trillion ($43.1 million) from the company.

    Following the long expansion delay, banks have slashed TISCO’s credit ratings and increased interest rates to 8 percent a year, worsening the situation.

    The company board said despite its petitions to authorities for a solution no progress has been made.

  • Businesses face conundrum image when placing ads on Youtube

    Businesses face conundrum image when placing ads on Youtube

    After the streaming website blocked the accounts of online gangster Kha Banh for violating its terms of service on April 3, YouTube also terminated the account of the god of profanity Duong Minh Tuyen, another self-proclaimed gangster, due to repeated violations of YouTube’s policies on violence.

    Kha and Tuyen are two YouTubers who were recently condemned by the general public for uploading videos promoting gang culture, gambling and crudeness, but are adored and given superstar status by many Vietnamese youths.

    The public outcry in the country against YouTube channels promoting violence, profanity, and repulsive material is worrying businesses who advertise on the platform.

    Only recently Vietnam Maritime Bank (MSB) announced it was pulling out all its ads from YouTube. It would conduct a review with YouTube so that its ads would only appear on content compatible with “regulations, ethics and positivity,” it said.

    The private bank’s ads have appeared in clips of internet gangster phenomenon Ngo Ba Kha (Kha Banh). Last week he was arrested and charged with gambling and organising gambling.

    In 2017 many major companies such as Vinamilk and Ford Vietnam also demanded that YouTube should pull out their ads, voicing concern over its lack of content control causing their ads to be associated with dubious channels.

    “Responsibility first lies with the content managers, or multi-channel networks authorised by YouTube if dubious channels register with them to make money,” Vo Do Thang, a cyber-security expert, said.

    “Let’s also not rule out the possibility these content managers overlooked or even promoted negative content on purpose to make money off views.

    “Some advertising agencies working with YouTube guarantee they will use tracking and filtering programmes using keywords and search terms to prevent enterprises’ ads appearing along with negative content.

    “However, this cannot be 100 percent guaranteed by anyone, the risk to the brand image is still there.”

    Viet Phuong, who works for an advertising agency, said: “When uploading ads, there is an option not to post on specific channels. However, this job is tedious, and it is difficult for an advertising agency to cover everything unless the client hands their own list of channels. Sometimes this step is skipped, because it is more effective to run ads everywhere.”

    He revealed however that his company had been working vigorously on channel filters since Kha Banh’s arrest.

    YouTube’s mechanism prioritizes ads for videos with more views. Most agencies in Vietnam have successfully filtered political videos well, but entertainment channels are difficult to control because they garner much more viewership and are traditionally considered harmless.

    However, agencies say their job is getting harder as videos with violent content are being uploaded in response to the general public finding them popular.

    “Brands should cooperate closely with agencies or choose only to run ads in the mid-range of popularity, videos which do not fall into the ‘top/hot’ categories on YouTube,” Phuong said.

    But despite these risks, it is hard for businesses to abandon the website and lose a large audience.

    In 2017 the Authority of Broadcasting and Electronic Information estimated that Google and Facebook accounted for 80 percent of the online advertising market share in Vietnam.

    The director of a major online business, who asked not to be named, said this ratio had probably not changed by much.

    In other countries too, major businesses have withdrawn their ads from YouTube. In March 2017 Walmart and PepsiCo terminated their advertising contracts with it after their commercials were featured on videos featuring racist content.

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  • Vietnam Airlines, Jetstar to sell million tickets during month-end holidays

    Vietnam Airlines, Jetstar to sell million tickets during month-end holidays

    Vietnam Airlines and Jetstar Pacific will sell nearly one million seats on 4,700 domestic and international flights during the Reunification Day (April 30) and Labour Day (May 1) holidays from April 26 to May 5.

    Vietnam Airlines will sell nearly 800,000 of them, 78,000 more than last year.

    The State-owned carrier will focus on services from Hà Nội, HCM City, Đà Nẵng, Phú Quốc, and Nha Trang domestically and the Japan, South Korea, Thailand, and Cambodia sectors.

    It owns a 70 per cent stake in Jetstar.

    The two airlines have urged passengers to plan their travel early, use online check-in services and kiosks at airports to save time.

    They should buy their tickets at www.vietnamairlines.com and www.jetstar.com/vn or from their offices and official agents, and request invoices to ensure they are not deceived by fake tickets or high fares.

     

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  • Lexus Vietnam introduces new Lexus RC 2019

    Lexus Vietnam introduces new Lexus RC 2019

    Lexus Vietnam on Monday introduced new Lexus RC 2019 – a luxury sports coupé.

    Taking the driving concept of “sharper and more graceful” that defined the LC, Lexus engineers have succeeded in making the new RC fun to drive by focusing their attention on details.

    The new Lexus RC300 2019 will be available in two Lexus dealers of Thăng Long in Hà Nội and Saigon in HCM City since April 2019.

    The Lexux RC 300 costs up to VNĐ 3.3 billion (US$142,200).

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  • Insurance industry growth surges 17% in Q1

    Insurance industry growth surges 17% in Q1

    Việt Nam’s insurance industry maintained positive growth in the first quarter of this year, with total premiums surging by 17 per cent year-on-year, according to reports from the General Statistics Office.

    Life insurance surged by 23 per cent, while non-life insurance increased by 9 per cent.

    According to the Ministry of Finance’s Insurance Supervisory Authority (ISA), the insurance industry is targeting a growth rate of 20 per cent this year.

    Experts remain upbeat about the industry’s health in the coming years, forecasting that it will maintain an annual growth rate of 10-20 per cent. Many banks that co-operate with insurers to provide bancassurance products even expect an annual growth rate of up to 30-40 per cent.

    The fast-growing domestic insurance market should thrive thanks to rising living standards and a high gross domestic product (GDP) growth of more than 6 per cent annually over the next three years, experts said.

    The growth potential is great as the country has one of the world’s lowest life insurance penetration levels at less than 1 per cent of GDP. The average insurance premium in Việt Nam stands at US$30, much lower than the global average of $595 and Southeast Asia’s average of $74.

    To maintain high growth, Deputy Finance Minister Huỳnh Quang Hải said the Insurance Association of Vietnam (IAV), in conjunction with other relevant agencies, must raise awareness about insurance.

    IAV also needs to promote closer co-operation among insurers so that businesses can join hands to build and fine-tune the industry’s databases, which will improve the quality of their services, thereby raising their financial capability and competitiveness, Hải said.

    Hải also told insurers to work with IAV and the Ministry of Finance to develop a new insurance business law to contribute to the development of the local insurance market.

    The ISA reported that the country has 64 insurance companies, including 30 non-life insurers, 18 life insurers, two reinsurance companies and 14 insurance brokerage companies.

    There are up to 850 non-life insurance products and 450 life insurance products sold on the Vietnamese market.

    Read more at https://vietnamnews.vn/economy/518204/insurance-industry-growth-surges-17-in-q1.html#lVqMUB0GwB3zyHU6.99

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  • Electricity hike hits industry hard

    Electricity hike hits industry hard

    Vietnamese manufacturers are set to increase their selling prices following the 8.36 per cent hike in electricity price that launched from March 20.

    Việt Nam Cement Industry Corporation (VICEM) Bút Sơn announced it would increase the price of its cement by VNĐ30,000 (US$1.29) per tonne immediately after the power price increase.

    Đỗ Tiến Trinh, VICEM Bút Sơn’s general director, said that in addition to the electricity tariff hike of 8.36 per cent, the price of coal sold to cement producers also increased by 2.3 to 5.8 per cent depending on the kind of coals.

    The coal price increase came because electricity accounts for 10 per cent of production cost. In addition, the Việt Nam National Coal and Minerals Industry Holding Group (Vinacomin) has not provided enough coal to cement producers, making them import the product at high prices.

    Trinh said the firm could not afford to offset the rise in input costs and had to increase retail prices to ensure sustainable production.

    VICEM Tam Điệp Company also had the same increase in the selling price.

    According to Phạm Văn Minh, the company’s general director, no business wants to increase retail prices, but electricity and coal make up a big portion of input material costs for cement production.

    Công Thanh Cement Joint Stock Company in the central region did not raise its retail prices but is charging distributors VNĐ30,000 more per tonne.

    Nguyễn Quang Cung, chairman of Việt Nam Cement Association said cement producers were not surprised by the power tariff hike and had been preparing for the change.

    Its calculations showed if the electricity price was increased by 8.36 per cent, cement production cost would rise by VNĐ14,000 to VNĐ15,000 per tonne.

    Steel producers also said they would increase their selling prices.

    SSE Steel Company said it doubled its steel selling price to VNĐ200,000 per tonne, while Thái Nguyên Steel and Iron Corporation (Tisco) increased its selling prices by VNĐ150,000 to VNĐ200,000 per tonnes.

    The Việt Nam Steel Association said it was unavoidable for steel producers to raise their prices as power accounted for 8 to 9 per cent of total production costs. In addition, the import prices of iron ore and steel billets were also rising this year, affecting steel production costs.

    Nguyễn Anh Tuấn, head of the Electricity Regulatory Authority of Việt Nam (ERAV) under the Ministry of Industry and Trade (MoIT) told a press meeting last week that there were about 1.4 million manufacturing businesses in Việt Nam who spend on average VNĐ12.39 million per month on electricity. The average increase in their power bills would be VNĐ870,000 a month.

    While electricity prices have almost doubled in the last decade, the MoIT said Việt Nam’s electricity prices were 8.1 per cent lower than that of China and India, 18 per cent lower than Laos and 26.5 per cent lower than Indonesia. Even with the latest increase, the prices would only be on par with China and India.

    “Việt Nam’s electricity prices are lower than other countries. It is the reason that foreign investors are not interested in investing in electricity projects in the country,” said deputy minister Hoàng Quốc Vượng.

    However, chief economist of the Bank for Investment and Development of Việt Nam (BIDV) Cấn Văn Lực suggested the Government needs to eliminate cross-subsidising mechanisms for units using electricity.

    At present, industrial sectors consuming large amounts of electricity, accounting for 55 per cent of electricity density, such as cement, iron and steel, are being compensated for electricity prices and only subject to the lowest price of 6.8 cents per kWh. Meanwhile, electricity costs households 8.7 cents per kWh.

    “Currently, consumers using electricity for domestic use as well as service enterprises are compensating a certain amount for industrial production enterprises – that is unfair. When there is fairness, people and businesses will agree and are willing to pay more reasonable electricity prices,” Lực said.

    Read more at https://vietnamnews.vn/economy/507842/electricity-hike-hits-industry-hard.html#CEgTqP3b4CrxPzgm.99

  • Chairwoman of the Vietnamese National Assembly joins Vietjet at the ceremony in Toulouse

    Chairwoman of the Vietnamese National Assembly joins Vietjet at the ceremony in Toulouse

    Vietnamese National Assembly Chairwoman Nguyen Thi Kim Ngan and her fellow dignitaries from the National Assembly attended the delivery ceremony for Vietjet’s brand new A321neo, registered as VN-A600 at Airbus’s factory in Toulouse (France) yesterday.

    This visit by the delegation of National Assembly of Vietnam to the aircraft manufacturing factory underscores the deep commitment of Vietnam’s national leaders to support the development of Vietnam’s aviation industry and other affairs related to technology transfer and strategic cooperation within the industry.

    During the visit, Nguyen Thi Kim Ngan, asserted in her speech that Vietjet has been a pioneering airline which has positively contributed to the development of the national and regional aviation industry. She also noted that the Vietnamese aviation industry has been growing continuously while Vietjet has been among the fastest growing airlines in the Asia-Pacific region. As a result, Vietnam’s economy has benefited greatly from the contribution of tourism and investment segments.

    Kindly find enclosed the press release alongside the accompanying images for your perusal and use.

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  • Vingroup buys Vietnam c-store chain Shop&Go

    Vingroup buys Vietnam c-store chain Shop&Go

    Vingroup has acquired 87 Vietnamese Shop&Go convenience stores for just US$1.

    Vingroup’s retail arm VinCommerce, which manages Vinmart supermarkets and Vinmart+ convenience stores, will upgrade infrastructure, staff and goods at the acquired stores by the end of next month.

    According to a VinCommerce statement, Shop&Go made the approach and offered to sell itself.

    “The competition is more intense than we imagined; that is why we’ve decided to leave,” a Shop&Go spokesperson said, admitting Vietnamese retail market still has potential for growth.

    “We have sold our stores to Vingroup so it can continue to develop them.”

    Opened in 2006, Shop&Go was one of the earliest convenience store chains in Vietnam.

    By 2016, it had aggregated losses of almost VND205 billion (US$8.81 million).

    VinCommerce runs 108 VinMart supermarkets and 1900 VinMart+ convenience stores.

    Last year, it acquired supermarket chain Fivimart with 23 outlets.

    In a report last year, Nielsen Vietnam observed a rise in visits by Vietnamese to convenience stores. The average shopper uses a convenience store 4.5 times per month – three times the frequency of 2010.

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  • Central Group closes Robins Vietnam online store

    Central Group closes Robins Vietnam online store

    Central Group has closed its Robins Vietnam online fashion store to concentrate on its physical stores. On its website, Robins Vietnam announced the end of online business from this week, referring customers to its two Robins department stores, at Vincom Royal City in Hanoi and Ho Chi Minh City’s Crescent Mall.

    A Central Group representative said the group “plans to restructure its Vietnamese businesses”, including its fashion operation.

    Central Group launched Robins.vn, which was merged with Rocket Internet’s Zalora.vn, in May 2017.

    The Thai retail giant entered Vietnam in 2011, and now owns several businesses there, including Big C supermarkets, electronics chain Nguyen Kim, Lan Chi Mart, Robins Department Stores, and stationery chain LookKool.

    Mobile World group recently closed its online grocer vuivui.com after two years of operation.

    Vietnam’s e-commerce industry is expected to grow 30 per cent to reach US$13billion by 2020 by Vecom. The market is now dominated by Shopee, Lazada, and Tiki, with major investment from foreign firms including JD, Alibaba.

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