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Tag: Vietnam

  • Vietnamese brands look plain as foreigners wear the beauty industry crown

    Vietnamese brands look plain as foreigners wear the beauty industry crown

    The beauty care industry is doing better than expected in Vietnam, but foreign brands are the ones sitting pretty.

    Nguyen Van Minh, chairman of the Vietnam Essential Oils Aromas and Cosmetics Association (VOCA), said companies in the beauty and personal care industry have seen stronger growth than they’d forecast.

    “Vietnam is an emerging market for the beauty care industry, with annual growth rate averaging 30 percent in recent years,” he said.

    In 2016 alone, the industry generated $1.2 billion in revenue, a figure that the association had previously predicted for 2020.

    The import value of beauty care products surged almost twofold from around $3 billion in 2016 to $5.5 billion last year, but exports stayed insignificant at just VND500 million ($21,520) last year, it said.

    These figures match findings by British research firm Euromonitor International, which said last year that up to 90 percent of beauty products in Vietnam are imported.

    It also said the market value of this industry had crossed $1 billion since 2015 and repeatedly recorded double digit growth in recent years.

    A representative of Medicare, a drug and beauty care retailer based in Ho Chi Minh City, said that imported products or those produced in Vietnam by foreign companies make up most of its sales, and that imported brands will have more opportunities to expand their market shares than domestic rivals in the future.

    At the Mekong Beauty Show 2018, an international beauty and cosmetics expo that was held in the city in June, 110 of more than 300 international exhibitors were South Korean companies who came to find potential importers and business opportunities in Vietnam.

    Dominic Oh, general director of Korea International Exhibition and Convention Center (Kintex), the event’s organizer, said that Vietnam was considered one of the key markets for South Korea’s beauty care sector.

    In 2016, Singapore was the biggest exporter to Vietnam’s beauty care sector, accounting for 34 percent of its total imports. The EU followed with 19 percent, Thailand, 9 percent, and South Korea, 8 percent, according to Euromonitor International.

    In its report on beauty and personal care in Vietnam, the research firm said the market was dominated by global brands, thanks to innovative products, strong distribution network and dynamic marketing.

    Three foreign companies, Unilever Vietnam International Co Ltd, Procter & Gamble Vietnam Ltd and Colgate-Palmolive Co Ltd were in the top three positions in 2017, it added.

    Local firms held back

    According to VOCA, as their incomes improve, Vietnamese people are paying more attention to beauty and personal care, creating a lot of opportunities for businesses.

    In a report released early April, the World Bank said 70 percent of Vietnam’s population are now classified as economically secure, including the 13 percent who are now part of the global middle-class.

    These income classes are growing rapidly, rising by over 20 percentage points between 2010 and 2017.

    An average of 1.5 million Vietnamese have joined the global middle class each year since 2014, confirming that households continue to climb the economic ladder after escaping poverty.

    The WB also predicted that as many as 33 million Vietnamese will be in the middle class by 2022.

    Despite this fertile ground for beauty care products, Vietnamese brands have struggled to do well.

    Even top companies with decades in the market, like Saigon Cosmetics Corporation and Lan Hao Cosmetics Co Ltd, have stopped at making low and mid-range products.

    Minh, chairman of VOCA, said local firms were held back by a lack of serious investment in packaging, design and advertisement.

    Medicare, an HCMC-based drug and beauty care retailer, said it looked for Vietnamese partners to produce Medicare-branded beauty and personal care products, but local firms did not have the capacity to make products that could compete with foreign rivals.

    As organic beauty products is the new trend, VOCA chairman Minh said local firms should make good use of natural ingredients that are plentiful in Vietnam to create high quality products so that they can start competing with foreign firms.

    However, doing this will require bigger investments in more advanced technologies; and given the current state and scale of domestic firms, the upgrade is easier said than done, Minh said.

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  • Hanoi seeks approval for Vingroup’s $300 million IT park

    Hanoi seeks approval for Vingroup’s $300 million IT park

    Hanoi has submitted a proposal to the Ministries of Construction and Planning and Investment for building a new IT park possibly in Dong Anh District.

    It will be built by Vingroup on Vo Nguyen Giap Street on the way to Noi Bai Airport.

    It is estimated to cost US$302.54 million and likely to spread over 78.1 hectares, housing a maximum of 19,557 personnel.

    Its construction, to begin in the fourth quarter of this year, will be finished at the end of 2020, when it will open.

    Authorities hope it will interest both foreign and local IT companies thanks to its modern technical and social infrastructure, R&D facilities and other advantages.

    Vingroup also seeks to build facilities such as a data centre, IT functional zones, accommodation for specialists, commercial offices, an R&D complex, a training and consulting zone, exhibition space, parks and a recreation zone inside.

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  • Vietnam plans to make loans easier for agriculture investors

    Vietnam plans to make loans easier for agriculture investors

    Prime Minister Nguyen Xuan Phuc has called for a drastic reduction in administrative procedures and easier access to agricultural loans.

    He said at a recent conference in the Central Highlands city of Da Lat that relevant departments and ministries should reduce the number of administrative procedures by 50 percent, make it easier for enterprises investing in agriculture to get loans, and create opportunities to expand infrastructure for agriculture production.

    The Ministry of Planning and Investment told the conference that just 8 percent of businesses nationwide, or 49,600, had invested in agriculture sector, as of the second quarter of 2018.

    The ministry also noted that capital investment by foreign investors in agriculture accounted for just two percent of the total.

    Le Van Cuong, president of the hi-tech agricultural company Dalat GAP, said getting a loan from the banks was an investor’s biggest challenge.

    The banks only accept land use right certifcate as collateral, but the land’s value affixed by the bank for the loan is much lower than its market price. Furthermore, no preferential interest rate is offered, which means borrowers would have to pay 8-8.5 percent per year on large sums that are needed to build glasshouses and other equipment, Cuong said.

    an unnamed World Bank representative said Vietnam’s agriculture sector faced three big challenges – fragmented agricultural chain value; low FDI; and modest overall capital investment. The representative suggested that the government issues fresh regulations and offers tax breaks to attract more foreign investors.

    Phuc wanted Vietnam to be listed among Top 10 agricultural production countries and for the nation’s agriculture sector to rank 15th, globally.

    Vietnam currently ranks second in Southeast Asia and 13th in the world in agricultural production, said Minister of Agriculture and Rural Development, Nguyen Xuan Cuong.

    Vietnam exported about $36.37 billion worth of agriculture and fisheries products last year.

  • FMCG sales slightly up in urban Vietnam

    FMCG sales slightly up in urban Vietnam

    National sales of FMCG on traditional and modern trade channels in urban areas reached $14 billion in Q2, growing 0.7 percent, Nielsen reported.

    The fast-moving consumer goods growth year-on-year was driven by sales increases seen across six out of seven super categories: beverages (including beer), milk and dairy products, household care products, personal care products, baby care products, and cigarettes.

    Baby care witnessed the biggest jump to 12 percent while food showed a decline of 1.9 percent, according to the market research firm’s newly-released Market Pulse Quarter 2 report.

    “FMCG has yet to reflect an upturn in economic conditions while Vietnam’s GDP growth hit 7.1 percent in the first half of 2018,” Nguyen Anh Dung, executive director of Nielsen Vietnam’s retail measurement services division, said.

    But there were many growth pockets, with modern trade channels seeing double-digit growth, he noted.

    Semi-retail channels comprising stores with both wholesale and retail sales also saw strong growth.

    Overall, the modern distribution channel enjoyed growth of 11.9 percent while the traditional channel was sluggish. Sales through traditional channels in urban areas rose 1.2 percent while in rural areas there was a drop of 2.4 percent.

    Dung said seasonality could provide an opportunity for certain categories such as snacks, dairy, beverages, and confectionary to innovate and connect with consumers in novel ways.

    “FMCG products have become basic while other products provide more excitement with innovation and new customer experiences. Consumers are willing to loosen their purse strings as reflected in strong growth in entertainment, tourism, cellphone, and automotive sales.”

    It is time for manufacturers to bring excitement back to the FMCG industry, and the most important thing is to listen to consumers and put them at the center of all decisions they make, he said.

    They provide the key growth cues if manufacturers can satisfy their needs, he added.

  • Baby product chain dupes clients with false labels

    Baby product chain dupes clients with false labels

    Con Cung, Vietnam’s largest baby products chain, has been using false labels to mislead its customers, authorities say.

    The chain was unable to furnish invoices and other legal documents for the products, which it claimed were imported, Nguyen Trong Tin, the deputy head of HCMC’s Market Surveillance Agency, said Tuesday.

    For instance, a plastic milk container it sells has a label claiming it is manufactured with German technology but fails to indicate origin, he said at a press conference on business fraud and fake and smuggled goods.

    Many of the firm’s products lack legally required information on their labels, Tin said.

    “These violations are enough for Con Cung to be dealt with legally.”

    His agency is continuing its investigation to decide how serious the firm’s violations are.

    Con Cung has come under the scanner in the last two months after a customer complained it had sold him a shirt with a label that said “Made in Thailand” but looked like it had been swapped with another label.

    The company responded that the shirt was imported from Thailand, but soon afterwards took it off its shelves and offered a coupon for the value of the shirt to almost 4,000 customers who had bought it.

    It had previously claimed it did not sell fakes and its labels were changed only because of “technical issues” after the manufacturer had made mistakes in them and its Thai partner company changed its own name.

    It even offered a reward of VND1 billion ($43,000) to the first person who can prove that it sells fake goods.

    “There is no reason for us to cheat,” its chairman, Nguyen Quoc Minh said at a press conference on Monday.

    Founded in 2011, the company has 288 Con Cung and 30 ToyCity stores, mostly in Ho Chi Minh City and southern provinces.

    The chain, which received funding from the Vietnamese-Japanese DAIWA-SSIAM Vietnam Growth Fund in 2017, plans to have more than 1,000 stores by 2020.

    Its pre-tax profits in 2016 were VND8 billion ($350,000) on revenues of VND524 billion ($22.9 million), according to the Vietnam Industry Research and Consultancy.

    HCMC’s Market Surveillance Agency busted over 88,000 cases of smuggling, business fraud and fakes in the first six months of this year and fined the offenders over VND7.4 trillion ($316 million).

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  • Forbes lists Vietnam’s most valuable brands, Vinamilk, Viettel remain top

    Forbes lists Vietnam’s most valuable brands, Vinamilk, Viettel remain top

    Forbes Vietnam has released its third annual list of the 40 most valuable brands in Vietnam, putting their total value at $8.1 billion.

    The value is 50 percent up from last year. Dairy giant Vinamilk and military-run telecom firm Viettel remain the top two as they were in the two previous years.

    Forbes estimates Vinamilk’s brand value at $2.28 billion, much higher than the $1.7 billion last year, and Viettel’s at $1.39 billion.

    State-owned Vietnam Posts and Telecommunications Group (VNPT) takes over third position from Vingroup, Vietnam’s largest real estate company. With a value of $416 million, VNPT makes it to the list for the first time.

    The other brands in the top ten are the country’s biggest brewery Sabeco ($393 million), Vinhomes, the residential property arm of Vingroup ($384 million), Vinaphone, one of Vietnam’s big three mobile operators and belonging to VNPT ($308 million), Vingroup ($307.2 million), food and beverages producer Masan Consumer ($238 million), JSC Bank for Foreign Trade of Vietnam, or Vietcombank ($177.9), and tech giant FPT ($169 million).

    Vinhomes and Vinaphone are also newcomers.

    Just like last year, consumer goods brands account for the majority of this year’s list, followed by finance and banking and technology.

    But the gap between the total value of the finance-banking and consumer goods groups has narrowed, Forbes said.

    The other new entrants this year are Vincom Retail, the shopping mall subsidiary of Vingroup, top coffee firm Trung Nguyen Group, sugar, energy, real estate, and tourism conglomerate TTC Group, and Ho Chi Minh City Development Joint Stock Commercial Bank, or HD Bank.

    Forbes compiled the list by looking at brands’ incomes before and after tax based on their financial reports and data on the stock market.

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  • Short-term leasing could be a long-term trend in Hanoi, HCMC

    Short-term leasing could be a long-term trend in Hanoi, HCMC

    Thanh’s apartments in Ho Chi Minh City have been behaving like hotels for more than a year now.

    Individuals and groups of tourists stay at his serviced apartments for a few days before they leave for another destination in the country, and the apartment is open almost immediately for new guests.

    Thanh, who did not want his surname revealed, has invested in three apartments in HCMC, and all of them can be booked by anyone on Airbnb, an online service that connects tourists with hosts offering accommodation in a room, or rooms, or an apartment or villa, typically for short stays.

    The large supply of apartments in major cities like Hanoi and Ho Chi Minh City has spurred investors who have spotted an opportunity to earn higher incomes through short-term leases rather than long-term rental contracts.

    In addition, the driving force shifting consumer attention to Airbnb in Vietnam is a willingness to experience something new and affordable when it comes to rented accommodation, said accounting and consulting firm Grant Thornton.

    According to a Nielsen report, 76 percent of respondents in Vietnam like using shared products or services, compared to 66 percent of consumers globally.

    The total number of Airbnb listings in Vietnam has surged exponentially since the service was officially launched in Vietnam in 2015.

    There were only 6,500 listings in 2016, but last year, this rose almost 2.5 times to 16,000, according to accounting and consulting firm Grant Thornton.

    The apartment rental market has changed remarkably in the last 12-18 months, with more owners moving from traditional rental services to listing their apartments on Airbnb or similar online housing services, said Tran Anh Khoa, a renting agent in HCMC.

    This transition is happening as owners realize short-term rentals can earn 15-20 percent higher revenues than long-term leases, Khoa said.

    A 50-square-meter serviced apartment in HCMC’s District 2 can earn its owner $700-800 a month in a long-term contract, but this revenue can go up to $1,000 a month if it is leased short-term with an occupancy rate of 80 percent a month, he said.

    Apartment owners like this model, especially real estate speculators who want to earn money while waiting to sell their apartments, Khoa added.

    “This way, owners don’t get tangled in contractual obligations with tenants when they want to sell the apartment,” he noted.

    Growing trend

    Airbnb and similar services are favored by single or small groups of guests as they offer cheaper prices compared to a hotel room or a fully-serviced apartment, said Stephen Wyatt, country head of real estate firm Jones Lang LaSalle Vietnam.

    The supply of apartments in Vietnam has been growing in recent years, especially in HCMC, with an additional 129,000 apartments coming on line by 2020, according to real estate service provider Savills Vietnam.

    The “oversupply” will likely lower the profitability of long-term rental apartments, Wyatt said.

    So short-term leasing of these apartments is a positive trend as their sales show signs of slowing down, he added.

    Pham Thi Thanh Huyen entered the apartment-sharing business a year ago to earn extra income apart from her office job.

    The 24-year-old paid a total of VND400 million ($17,200) to do up the interiors of two apartments in Hanoi which she rents for VND6 million each a month.

    One of her apartments has had an occupancy rate of almost 100 percent every month, and the other, over 70 percent. Together, she earns a net profit of VND10 million a month by subletting them for short periods.

    She was confident: “If your apartment is in a good location, it won’t be long before guests start to pour in.”

    In 2017, Vietnam welcomed nearly 13 million international visitors. In the first half of 2018, the number was nearly 7.9 million, a 27 percent increase over the same period last year, according to VNAT.

    Tourism is expected to contribute 10 percent to Vietnam’s gross domestic product by 2020 when the country hopes to welcome up to 20 million foreign visitors and earn $35 billion in tourism revenues. Vietnam has set a target of receiving 15-17 million foreign arrivals this year.

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  • Foreign investors target Vietnam’s huge sports betting market

    Foreign investors target Vietnam’s huge sports betting market

    Choi Hak Soo, president of South Korea’s Golden Horse, said during a meeting with leaders of Bac Ninh last week that his company plans to set up a subsidiary in the northern province to build a racecourse.

    He expected the $500 million investment plan to be ready by October for submission to the government for approval, saying his company is in the process of mobilizing funds.

    Golden Horse had first proposed the plan to Bac Ninh last year when the National Assembly (NA) was wrapping up its discussion on legalizing sports betting.

    The 400-hectare entertainment complex will include a horse racecourse, a resort and a residential area, and create 5,000-10,000 jobs.

    The NA late last year approved a bill legalizing sports betting, and last month the government promulgated a decree regulating the sports-betting business, throwing open opportunities for foreign investors.

    Illegal sports betting used to be rampant in the country.

    A year earlier the government had also cautiously opened casino doors to locals.

    There are no official reports on the value of illegal sports betting, but a study by Prof Ha Ton Vinh, who has spent much of his professional life studying Vietnam’s gambling and sports betting activities, said Vietnamese used to spend an estimated $800 million a year overseas on gambling.

    The police have in the last two years busted dozens of illicit online gambling and sports betting operations worth hundreds of millions of US dollars.

    At the meeting in Bac Ninh, Choi said Golden Horse faces many rivals in sports betting in this country.

    Amplefield, a Singapore-listed company, is the latest name to enter the industry here. Last April it signed a memorandum of understanding to set up a joint venture for building a racecourse in HCMC.

    Amplefield will hold a 60 percent stake in it while Malaysia’s Equine Sanctuary, a provider of horse care services and horse-racing consultancy services in Singapore, will hold the rest.

    According to Amplefield, the joint venture will build a 300-hectare racecourse and property complex in Sing Viet City. It will include a residential component with some 16,000 units, horse racing, gaming and golfing facilities.

    “This is the first step towards the development of the racino facilities, and we are excited about what lies ahead as this has tremendous potential to be a huge draw for both tourists and locals and stimulate further development activities in the area,” Yap Weng Yau, executive director of Amplefield, said in a statement.

    Another South Korea firm, G.O.Max, is also pursuing a giant horse racing and entertainment complex in the province of Vinh Phuc at an estimated cost of $1.5 billion.

    It had been proposed to the Vinh Phuc People’s Committee as long ago as in 2005 as a $570 million investment, but was not approved. Now, following the new developments, the investor has again decided to throw its hat in the ring.

    G.O.Max has projected building a horse racecourse on a site of 200 hectares and running three races a week. Seventy betting points will be set up in 54 cities and provinces around the country, as well as an online betting system.

    Jung Young Jin, strategy director of G.O. Max, has indicated to the media there will be revenues of $972 million and taxes of $100 million a year in the first five years.

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  • Asia’s large format retailers prepare for steady growth

    Asia’s large format retailers prepare for steady growth

    Global research organisation IGD has reported that Asia’s large format retailers are set to grow 3.3 per cent a year to 2022, with Vietnam, India and the Philippines forecast to see double-digit growth from large format players over the next five years.

    Most of this growth is predicted to be driven by domestic retailers, except for Vietnam where foreign retailers have been investing to gain a foothold in this fast-growing market. Indonesia will see steady growth, also driven mainly by domestic players; with China coming through as another market with significant growth opportunities due to its vast geography.

    Many large format retailers in Asia are still enjoying steady growth through expansion although they are facing pressures from increased competition in more developed markets.

    Besides expansion to new regions, retailers are also digitising physical stores to create a seamless shopping experience in more matured markets.

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  • Hanoi to go modern, install 1,000 public vending machines

    Hanoi to go modern, install 1,000 public vending machines

    Recently the city people’s committee approved the installation of around 1,000 vending machines in public locations under its own supervision.

    They are expected to provide a wide variety of beverages, snacks and fresh fruits besides customer assistance, especially to seniors, children and disabled people.

    The locations include parks, botanical gardens, hospitals, schools, and train and bus stations, which meet the space requirement of 2-3 square meters.

    They will be located at 500-1,000 metres away from each other with a maximum of four installed in close proximity if the specific needs of an area so demands.

    Thong Nhat Park (Lenin Park) will have the largest number — 10.

    The machines will be capable of returning correct change to customers besides also accepting other payment methods such as cards and QR codes.

    The people’s committee said the objective is to modernize retail sales in the city.

    There are now 161 public vending machines in the capital.

  • Vincom Centre Landmark 81 launched

    Vincom Centre Landmark 81 launched

    Vingroup has opened its 55th shopping centre, The Vincom Center Landmark 81 mall, in Ho Chi Minh City’s Binh Thanh district.

    The 50,000sqm shopping centre occupies six of the skyscraper’s 81 storeys, housing 100 domestic and international brands in cosmetics, fashion, F&B, and entertainment.

    Fashion brands include Versace Jeans, Calvin Klein, Adidas, Tommy Hilfiger, Lacoste, French Connection, Kimmay, Superdry, H:Connect; Cole Haan, Ecco, Dune London, Parfois, Aldo, Pandora, Longines, OWL and Nike.

    The 7000sqm food and beverage area features 30 restaurants, including China’s Peach Garden, Japan’s Dozo Sushi, Vietnamese restaurants Delights, Di Mai, and coffee shops including Starbucks’ largest Vietnam outlet and Highlands Coffee.

    In the entertainment area, there is a 2000sqm Vincom Ice Rink, Vietnam’s largest, and a CGV cinema complex including an Imax screen, as well as a tiNiWorld entertainment complex and an indoor games centre.

    Vingroup’s food arm VinMart operates a supermarket there.

    Go to gallery below to view the launching event :
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  • Dairy Farm restructures after recent result

    Dairy Farm restructures after recent result

    “Underperforming” subsidiaries and rising rent and labour costs are disturbing the chairman of Hong Kong-listed multinational retailer Dairy Farm International – but those factors failed to prevent a solid second-half year performance.

    Dairy Farm’s total sales rose 17 per cent to US$12.215 billion in the six months to June 30 and profit attributable to shareholders was $215 million, up 6 per cent. The increased sales came largely from the Yonghui supermarket operation and Maxim’s which owns food retail channels and the Starbucks business in Hong Kong, Singapore, Vietnam and Cambodia.

    Chairman Ben Keswick said the health and beauty business in Hong Kong and Macau drove strong results in North Asia, but the Southeast Asian food businesses continued to face challenges producing a weaker overall performance.

    “While the outlook for the remainder of the year is expected to remain challenging for the Food businesses, particularly in Southeast Asia, the group’s other businesses should continue to make steady progress. Significant management and structural changes have been made to address the issues the group faces in a number of areas, but time will be needed to deliver sustainable improvement.”

    The company has consolidated its trading operations into a more centralised structure with two main trading divisions: North Asia and Southeast Asia, in addition to the standalone business of Home Furnishings (essentially Ikea) and Maxim’s.

    Keswick says five strategic priorities have been identified: building capability, growing presence in Mainland China, protecting the group’s Hong Kong business, revitalising the Southeast Asia operations and driving digital innovation. “A series of programs are underway to support these priorities across all of the group’s businesses,” he said in the earnings statement.

    In North Asia, overall sales within the food businesses were ahead of prior year, but profits declined, mainly due to higher rent and labour costs in Hong Kong. “The health and beauty business in Hong Kong and Macau delivered very strong sales and profit growth, driven by a significant increase in business from higher numbers of mainland Chinese tourists.”

    Southeast Asia challenges

    However, in Southeast Asia, challenging trading conditions continued for Dairy Farm’s food businesses.

    “The group saw lower sales and profits in Singapore, Malaysia and Indonesia, while in the Philippines, sales were higher but profits lower, due to increased operating costs resulting from more store openings. Generally, these businesses have suffered from a lack of investment in infrastructure, range and competitive pricing for some time, while competition in each market has been increasing.

    “Turning these food businesses around and becoming more relevant to the changing demands of customers will take significant effort. Appropriate plans are now being put in place following the strategic review, but will require time to take effect,” said Keswick.

    He said the improving performance of the majority of the group’s health and beauty businesses in Southeast Asia is encouraging, with Malaysia, Indonesia and Vietnam reporting better underlying results.

    Dairy Farm’s convenience store operations (7-Eleven) performed well, with Hong Kong and Macau trading in line with last year.

    “In Singapore, overall convenience store sales were slightly lower than last year due to the termination of a multi-site agreement, but profitability improved following the closure of some underperforming stores. Like-for-like sales increases and store expansion in Mainland China continued to underpin growth in this sector.

    “In Home Furnishings, Ikea performed ahead of last year in Taiwan and Indonesia, with sales and profits growth. Hong Kong reported higher sales, helped by a contribution from the new store which opened in October last year, but associated higher operating costs resulted in reduced reduction in profits. Progress continues to be made on new store development in both Taiwan and Indonesia, with several sites under development. Meanwhile, e-commerce activities are showing increased results in all markets but from a small base.

    Keswick said Maxim’s delivered another good performance and is continuing to expand its presence across Mainland China and Southeast Asia. In Hong Kong, Maxim’s opened its first Shake Shack in May with “encouraging initial results”.

    Supermarket chain Yonghui reported strong sales growth and underlying profits from the core food business remained strong, but total profits were behind prior year due to the investment in new technology formats and the introduction of an employee incentive scheme announced earlier this year.

    Philippines restructure

    Meanwhile, back in March, the group announced it had agreed to partner with Robinsons Retail Holdings Inc. (‘RRHI’), the third largest retailer in the Philippines, to build a leading food retail business in that market. Dairy Farm will combine its Rustan Supercenters operations with RRHI to build on the combined strengths of both businesses, creating a new platform for growth. Following completion of the transaction, Dairy Farm would own 18.25 per cent of RRHI. The transaction, which is subject to certain regulatory approvals, is expected to be completed in the fourth quarter.

    As at June 30, Dairy Farm, including associates and joint ventures, operated more than 7400 outlets across all formats, compared with 7181 at the end of last year.

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  • Vietnam’s motorbike market bucks saturation forecasts

    Vietnam’s motorbike market bucks saturation forecasts

    In the first six months this year, the top five popular brands in the country sold almost 1.6 million motorbikes, the Vietnam Association of Motorcycle Manufacturers (VAMM) reports.

    This is a growth of 4 percent over the same period last year, said VAMM, which represents Honda, Piaggio, Suzuki, SYM and Yamaha in Vietnam.

    Motorbike consumption in the first half this year was 12 times that of cars, which went down two percent year-on-year, it added

    Honda remained the largest player in the motorbike market, accounting for 72.5 percent of 3.28 million motorbikes sold by VAMM members from April last year to March this year, the company informed a conference in May.

    Although semi-automatic motorbikes are still dominant, Vietnamese are showing greater inclination towards scooters. Last year, 48 percent of motorbikes sold in the country were scooters, a three percent increase from 2016, the VAMM report said.

    It said companies have also been producing more sports bikes as they discern greater interest in them from increasing numbers of young Vietnamese men.

    The motorbike market in Vietnam is still growing because people have a demand for this type of transport. High taxes and infrastructure limitations are constraints for cars, VAMM said.

    “Although the market will not see remarkable changes in the future, it will continue to grow steadily with 3-3.5 million motorbikes sold each year,” VAMM said.

    Motorbike market share in Vietnamin percentage; by March 2018HondaOtherHonda

    Last year, a study done by Germany-based Dalia Research found that Vietnam ranked top in the world for having with highest number of people using motorbikes for daily transportation.

    Seventy-nine percent of Vietnamese use motorbikes for commuting, while the number is just 10 percent globally, the study found.

    By the end of 2016, there were 45 million registered motorbikes in Vietnam, a country of over 92 million people, according to the Ministry of Transport.

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  • Vingroup to take over Vien Thong A

    Vingroup to take over Vien Thong A

    Vietnamese conglomerate Vingroup’s electronics retailing arm VinPro is set to acquire mobile retail chain Vien Thong A next month.

    A source said that staff have been informed about the deal, and a merger process has commenced.

    However, Vien Thong A’s vice GM Huynh Viet Anh responded to a question about the report’s accuracy: “That can not be disclosed now.”

    Vien Thong A is one of the largest mobile device retailers in Vietnam. Founded in 1997, tit has 200 stores across the country.

    The deal is said to have been on and off since early this year, before being deferred to the second quarter. According to the report, VinPro, which has 35 outlets nationwide, would buy 71 per cent of Vien Thong A, and rebrand its stores to VinPro+.

    VinGroup, meanwhile, recently unveiled its first smartphone, branded the Vsmart.

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  • Real estate giant shakes up market with yet another business

    Real estate giant shakes up market with yet another business

    Vingroup has invested VND2.4 trillion ($103.2 million) for an 80 percent stake in payment intermediary services firm VINID Joint Stock Company, according to a statement on the National Business Registration Portal.

    VINID, incorporated this week, has a charter capital of VND3 trillion ($129 million) and its other two founding shareholders are Hanoi-based VICARE Corporation (19 percent) and a person named Nguyen Minh Hong (1 percent).

    VINID sought to operate in 12 different areas of business, and received a registration certificate from the Hanoi Department of Planning and Investment.

    The payment services business must wait for State Bank of Vietnam permission, but the company has indicated it intends to begin as soon as it gets the green light.

    VINID is running Vingroup’s customer loyalty program, issuing VinID cards to customers of all of Vingroup’s subsidiaries.

    The firm takes care of four million card holders, Pham Nhat Vuong, chairman of Vingroup, told the 2018 annual general meeting held in May.

    The entry into the payments industry is meant to take advantage of Vingroup’s huge range of products, the company stated.

    The entry into payments comes on the heels of a slew of announcements the company has made about new business plans this year.

    In June Vingroup had said it would make electronic goods with the Vsmart brand of smartphones getting priority.

    It has set up VinSmart company with a charter capital of VND3 trillion ($129 million) to produce smart electronic products including phones and carry out R&D into artificial intelligence, automation, and next-generation materials.

    It will build a plant at the Dinh Vu – Cat Hai Economic Zone in the northern port city of Hai Phong.

    In April Vingroup revealed plans to enter the pharmaceutical industry and set up a medical research and production facility in the northern province of Bac Ninh.

    It would invest VND2.2 trillion ($94.6 million) in the first phase of the project, the company said.

    Vingroup is the largest listed company in the Vietnamese stock market with its market capitalization reaching $13.62 billion, the group stated on its website in April.

    Last year it raked in net revenues of VND89.350 trillion ($3.84 billion), a 55.1 percent increase year-on-year.

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