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Tag: Vietnam

  • Vietnam’s Techcombank shares drop 20 pct on debut

    Vietnam’s Techcombank shares drop 20 pct on debut

    Vietnam’s Techcombank saw its shares fall as much as 20 percent from their reference price on Monday, hitting the lowest trading limit allowed on a stock’s maiden day of trading.

    Techcombank, formally known as Vietnam Technological and Commercial Joint Stock Bank, raised $922 million in April in one of Vietnam’s biggest offerings, aiming to expand aggressively into retail banking to capitalise on booming demand for an array of financial services.

    The shares are allowed to move 20 percent higher or lower than the reference price on the first day of listing, according to exchange trading rules. In morning trade, Techcombank hit a low of 102,400 dong ($4.49), falling from its 128,000 dong reference price.

    Vietnam’s benchmark VN Index dropped 10 percent in April after touching a record high, prompting fund managers and strategists to warn valuations may have peaked. The index lost a further 7.5 percent in May.

    “We obviously can’t select what’s happening at the market when we come to listing,” Chief Financial Officer Trinh Bang said last week.

    The 25-year-old bank is seeing strong growth in services such as credit cards, auto loans and bancassurance. Its cornerstone investors included Singaporean sovereign wealth fund GIC Pte Ltd, Fidelity Management & Research and domestic fund Dragon Capital.

    Techcombank’s appeal stems from a boom in financial services while the economy expands at record rates.

    Vietnam reported annual credit expansion of about 18 percent for the past two years, with banks posting strong profit growth. A manufacturing boom spurred the export-dependent economy to grow 7.4 percent in January-March – the fastest first-quarter pace in a decade – after growing 6.8 percent in all of 2017.

    ($1 = 22,790 dong)

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  • Vietnam a really cool market for air-conditioner makers

    Vietnam a really cool market for air-conditioner makers

    Most major air-conditioner makers are making themselves at home in Vietnam as demand surges alongside economic growth and improving living conditions.

    Vietnam’s market for the cooling systems was ranked Asia’s eighth largest in 2011, excluding Japan and China, with about 660,000 units sold.

    But the country surpassed Thailand in 2015 and sales soared to 1.98 million units in 2016, lifting it to third place behind India and Indonesia.

    Citing the Japan Refrigeration and Air Conditioning Industry Association, the report said global market grew 2.5 percent between 2011 and 2016, but surged 34.3 percent in Asia during that period, with Vietnamese sales tripling to 150 billion yen, or $1.35 billion.

    Vietnam’s local media reports said Daikin’s revenue surged 17 times in the past 10 years to more than VND10 trillion ($438.6 million) in 2017.

    The brand also set a record of earning more than 2 trillion yen ($18.3 billion) in five consecutive years between 2013 and 2018.

    In May, it opened its first factory in Vietnam in Hung Yen Province, not far from Hanoi, aiming to produce one million air conditioners per year by 2020.

    Rising wealth has fueled growth of the air conditioner market in Vietnam, Nikkei said.Vietnam’s gross domestic product (GDP) grew by 6.8 percent last year, the highest since 2007 before the economy broke another record in the first quarter of 2018 when it expanded by 7.38 percent, marking the highest growth rate in a decade.

    Vietnam’s per-capita GDP totaled about $2,300 in 2017, but topped $4,000 in Ho Chi Minh City and reached the upper $3,000 range in Hanoi, the country’s two biggest cities.

    Japan’s Daikin and Panasonic each control about 25 percent of Vietnam’s air conditioner market, followed by LG, Samsung Electronics of South Korea and Sweden’s Electrolux.

    In March, LG Electronics announced it would invest $1.5 billion to expand production of air-conditioners. Meanwhile, Panasonic is increasing output at its Malaysian factory to expand supply to Vietnam.

    With a population of more than 90 million, Vietnam is seen as a promising air conditioner market, with just 17 percent of Vietnamese households owning an air conditioner as of last year, according to British research firm Euromonitor International.

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  • WHO wants Vietnam to raise tobacco taxes

    WHO wants Vietnam to raise tobacco taxes

    Vietnam should raise its tobacco tax in order to deter and reduce people smoking, the World Health Organisation has advised.

    WHO head Kidong Park said at a recent meeting held by the Health Ministry in Hanoi that Vietnam was among the top 15 countries in the world with the lowest tobacco prices.

    He said Vietnam’s current tobacco tax only accounts for 35 percent of a cigarette pack’s retail price, which is lower than the world’s average of 56 percent. In comparison, corresponding tax rates in Thailand, Brunei and Malaysia are 75, 81 and 57 percent respectively.

    Park said that in order to reach the government’s target of reducing the number of smokers among Vietnamese males from 47 to 39 percent by 2020, the country would need to raise its tobacco taxes by a fixed tax rate of at least VND2,000 per packet. VND5,000 per packet would be better, he added.

    The Finance Ministry had previously proposed two tobacco taxing options for inclusion in the Tax Administration Law – to apply an additional fixed tax rate for each cigarette pack, or incrementally increase the special consumption tax on tobacco each year until it reaches 85 percent in 2021.

    Under the first option, a 20-cigarette pack would cost an additional VND1,000, and each cigar, VND1,500.

    The Ministry of Health is currently leaning towards the first option, but has suggested an increase of VND2000 or VND5000 per pack, saying VND1,000 is too low.

    At a workshop on Tobacco Taxation organized by Oxfam early last month, Deputy Director of the Tobacco Control Fund, Phan Thi Hai, said higher tax rates would not only increase government revenue, but also “prevent adolescents and poor people from purchasing more cigarettes.”

    Vietnam has one of the world’s highest populations of smokers. It is estimated that 15.6 million Vietnamese smokers spend VND31 trillion ($1.36 billion) on cigarettes every year, which promotes trade in contraband tobacco.

    Smoking is a major cause of lung cancer and cardiovascular diseases that costs Vietnam VND23 trillion (more than $1 billion) in treatment and labor loss every year, according to the health ministry.

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  • Beer brands pour big bucks into ads as Vietnam bucks global trend

    Beer brands pour big bucks into ads as Vietnam bucks global trend

    As more and more Vietnamese drinkers take to beer and competition heats up, leading brands are spending big on advertisements.

    Saigon Alcohol Beer and Beverages Corporation (Sabeco), the leading beer producer in Vietnam which brews the well-known Saigon and 333 beers, spent VND1.2 trillion ($52.9 million) on advertising last year.

    While this figure is slightly less than its 2016 outlay, it still places Sabeco on the top of advertisement budgets list in the beer industry, spending more than VND1 trillion spent on product promotion in each of the last three years.

    Meanwhile the producer of Hanoi and Truc Bach beers, Hanoi Beer Alcohol and Beverage Jsc, known as Habeco, spent VND568 billion ($24.6 million) on ads last year, over 3 times its 2014 expenditure.

    The increased spending is a response to Habeco’s declining share of the beer market in recent years, from its heydays of having the most popular brands in Northern Vietnam. The company has been augmenting its advertising budget as “there has been no breakthrough in the marketing activities of the brand,” according to Viet Capital Securities, which claims to provide comprehensive research to assist investors in maximizing profits.

    Sabeco, Habeco, along with Heineken and Hue Brewery (which is owned by Carlsberg) made up 90 percent of the beer market in Vietnam last year. The big four are known to spend big on advertisements as they compete with each other in the Vietnamese market, which is considered to have more advantages than other countries.

    “While beer consumption in many countries has stalled, there is still a lot of potential for this industry in Vietnam,” said Nguyen Van Viet, president of the Beer, Alcohol and Beverage Association (VBA) in a recent conference.

    In China and some European countries, beer consumption has stagnated or even declined slightly. But in Vietnam it is forecast to rise in the coming years, Viet said.

    He is backed by a study of the Asia-Pacific beer market conducted by Euromonitor, which claims to be the world’s leading independent provider of strategic market research.

    The study found that beer consumption in the world has not increased in a decade, but in Vietnam, this figure is increasing rapidly.

    In 2008, Vietnam ranked 8th position in beer consumption in Asia, just 8 years later it had climbed to 3rd position, behind Japan and China.

    In a market dominated by big players, new businesses are having trouble making a stand. Laser, Fosters and Zorok are among the brands that have tried and failed to gain a decent foothold in the Vietnamese consumer. Local media reports have said that the high costs of advertisements had made it difficult for these firms.

    Sapporo, one of the newer entrants, has recorded higher consumption in recent years, but very high marketing costs have seen to it that its profit is not substantial, Viet said.

    Last year, Vietnam consumed over 4 billion liters of beer, and a Vietnamese person consumed 45 liters on average, according to VBA. The country targets production of 4.1 billion liters of beer in 2020 and 5.5 billion in 2035.

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  • Vietjet Opens Direct Flight from Hanoi to Osaka

    Vietjet Opens Direct Flight from Hanoi to Osaka

    Vietnam’s new-age carrier Vietjet will officially launch a direct route connecting Hanoi with Osaka (Japan) on 8 November 2018, looking to further boost tourism and trade integration between the two countries and across the region.

    A special ceremony to announce the new route was held today at the Japan-Vietnam Economic Forum in Tokyo with Vietnam’s President Tran Dai Quang, Japanese government’s representatives, and officials from both countries joining representatives of Vietjet.

    At the ceremony, Vietjet, SBI Leasing Services, Natixis and some of the Japanese equity arrangers also signed a MOU worth a total of nearly US$600 million for the purpose of aircraft financing.

    Using Vietjet’s new and modern A320 aircraft, the Hanoi-Osaka route will operate on a daily basis with a flight time of more than four hours per leg. As proposed, the flight will depart from Hanoi each day at 1:45am and arrive in Osaka at around 7:50am (local time). The return flight will take off from Osaka at 9:20am and land in Hanoi at around 1:10pm (local time).

    Vietjet’s new service to Osaka will bring the airline’s total number of international routes to 45 while also servicing 38 domestic routes.

    Speaking at the ceremony, Vietjet’s Vice President Nguyen Thi Thuy Binh said, “We are excited to be preparing to launch this new route. The Hanoi-Osaka route will be the first service for Vietjet’s expansion into Japan – the Land of the Rising Sun. We believe that this new connection and our expanding network will help make the travel dreams of millions of passengers come true.”

    “Japan is known to people from all over the world for its natural beauty especially for its cherry blossom season and Mt. Fuji. The country is also adored for its many enviable cultural heritage, friendly people, mouth-watering cuisine and cutting-edge technology. As part of our expansion strategy in Japan, we will continue to open new routes connecting Vietnam and Japan’s economic and tourism hubs in order to diversify destination choices and meet the growing demand for air travel between the two countries and beyond to better connect with the rest of the world,” added Binh.

    Osaka is Japan’s third largest city with a population of over 2.7 million people. It is not only the capital of the Kansai Region but also considered to be a cultural treasure of Japan for its striking traditional architecture and authentic Japanese cuisines. The city is well-known for its stunning tourist attractions and entertainment destinations such as the Osaka Castle (Ōsakajō), Sumiyoshi Taisha, Minoo Park, Universal Studios, Minami (Namba) and many more.

    Vietjet has already collaborated with Japanese travel agencies to operate many direct-chartered flights from Vietnam to Osaka as well as Narita, Sendai, Nagoya, Ibaraki and Fukushima, a demonstration that the airline’s services and its efforts in connecting the two countries has been very well received.

    Following a “Consumer Airline” model, Vietjet continues to open new routes, add more aircraft, invest in modern technology and offer more added-on products and services to serve the demands of millions of satisfied customers.

    An award-winning and pioneering airline, Vietjet is much loved by travelers for its exciting promotional and entertainment programs, especially during festive seasons. With high-quality services, diverse travel categories and special low-fare tickets, the airline offers its passengers memorable flying experiences on new aircrafts with comfy seats, delicious hot meals served by beautiful and friendly cabin crew, and many other interesting added-on services.

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  • Footwear giants shift outsourcing from China to Vietnam

    Footwear giants shift outsourcing from China to Vietnam

    Major brands in the footwear industry are shifting their outsourced work to Vietnam instead of China, but experts doubt this will be a good thing in the long run.

    Sneaker giant Adidas last year had 44 percent of its footwear produced in Vietnam, more than double the 19 percent made by suppliers in China. This figure also marked a 31 percent increase from 2012 for Vietnam and a 30 plus percent decrease for China.

    A similar move can also be seen at Adidas’ rival Nike, which had 46 percent of its footwear made in Vietnam last year, against just 27 percent in China.

    While China remains the top supplier in the fashion industry, Vietnam is now seen by major brands as a solid and critically important supplier in second place, according to survey results released by the United States Fashion Industry Association.

    “We are reporting a change in the sourcing trend, from ‘China Plus Many’ to ‘China Plus Vietnam Plus Many,’” the association said.

    The typical sourcing portfolio today is 30-50 percent from China, 11‑30 percent from Vietnam, and the rest from other countries, it added.

    According to experts in the industry, China manufacturing has become more focused on high value, and with workers’ wages rising, low-cost manufacturing is no longer its priority.

    This explains why Vietnam, Indonesia and Bangladesh are producing more shoes and apparel for export.

    However, while this trend can yield short-term benefits to Vietnam, long-term consequences will be severe, Professor Nguyen Van Nam, former director of the Institute of Trade Research under the Ministry of Industry and Trade said.

    Since advanced technology is not widely applied in Vietnam, the manufacturing sector exploits labor and pollutes the environment, he said.

    “Vietnam needs to push for the newest technologies in manufacturing, otherwise we will be a ‘landfill’ of other countries,” he added.

    Nguyen Duc Thuan, president of the Vietnam Leather Footwear and Handbag Association (LEFASO), highlighted another challenging aspect of the shift at a conference earlier this year.

    As workers in other countries are assisted by machines in the production process, each of them can make 1.2 pair of shoes in an hour, while their Vietnam peers can only manage 0.7, he said.

    “Labor productivity obviously increases when technology and high management skills are used, and this is a challenge that Vietnam needs to meet,” Thuan said.

    Vietnam’s footwear export value has been growing in recent years, from $8.4 billion in 2014 to $14.65 billion in 2017, a 42 percent increase. The country contributed a billion pairs of shoes to the 27 billion pairs produced globally last year.

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  • Vietnam tax on sweetened drinks hurts the business

    Vietnam tax on sweetened drinks hurts the business

    A Finance Ministry proposal to slap a 10 percent special consumption tax on sweetened drinks would hurt small and medium businesses, critics say.

    Business representatives and some experts say the beverage industry is already taxed heavily, and the latest addition could prove to the last straw.

    The tax proposal, first announced last year and expected to take effect in 2019, aims to promote healthier habits by discouraging the consumption of sweetened drinks. The Ministry has cited reports from the World Health Organization, saying overconsumption of sweetened drinks lead to obesity and that a fourth of Vietnam’s population are already obese or overweight adults.

    “The tax will help regulate the consumption of sweetened beverages, and it’s also an international norm,” the proposal says.

    However, the Vietnam Association of Liquor, Beer and Beverage (VBA) has protested the move, saying the tax could hurt small and medium businesses by promoting circulation of fake products.

    “The tax proposal would lead to higher production costs, allowing fake and low-quality products to thrive,” it said in a statement.

    Many industry insiders also say they are already paying no less than 10 different types of taxes.

    “If this tax proposal passes, we won’t be able to survive,” a Thursday report by the Tuoi Tre newspaper quoted an unnamed vice director of a beverage firm in the southeast province of Binh Duong as saying.

    Nguyen Van Viet, president of VBA, suggested an incremental imposition of the tax in order to reduce the burden on businesses.

    The industry stand has been backed by several ministries, who rejected the Finance Ministry’s rationale that sweetened drinks contain an unhealthy amount of sugar, warranting a special consumption tax.

    The Ministry of Industry and Trade said in a statement that imposing a special consumption tax on sweetened drinks because they contain sugar was not a convincing enough reason.

    It said the Finance Ministry needs to give clearer explanations for its proposal.

    The Trade Ministry statement echoed the argument made last October by the Vietnam Chamber of Commerce and Industry (VCCI) that a special tax should only be imposed after adequate studies have been made on the drinks’ impacts on consumer health and if the tax could help reduce the risks significantly.

    The Ministry of Planning and Investment is also against the proposal, which it says could adversely affect the beverage industry and its large workforce.

    In Vietnam, special consumption taxes are levied on items and services considered unhealthy or luxurious, like tobacco, liquor and cars.

    Many Southeast Asian countries have already imposed taxes on sugary drinks, according to the Finance Ministry. The current rate is 20-25 percent in Thailand, 5-10 percent in Laos and 10 percent in Cambodia.

    Myanmar, the Philippines and Indonesia are considering a similar tax.

  • Canada initiates dumping inquiry into steel imports from China, Vietnam, South Korea

    Canada initiates dumping inquiry into steel imports from China, Vietnam, South Korea

    The Canadian International Trade Tribunal (CITT) said on Monday it has initiated a preliminary dumping inquiry into steel imported from China, South Korea and Vietnam.

    The tribunal will investigate whether the alleged dumping and subsidizing of “cold-reduced flat-rolled sheet products of carbon steel” from these countries have harmed Canada’s steel industry.

    CITT, which operates in Canada’s trade remedy system and reports to parliament, said it will determine the results of the investigation on July 24 and will provide the reasons for the same on August 8.

    Canada’s steps follow U.S. actions from last week when the United States Commerce Department had slapped steep import duties on steel products from Vietnam that originated in China after a final finding they evaded U.S. anti-dumping and anti-subsidy orders.

    The global steel industry is struggling with a glut of excess production capacity, much of it located in China, that has pushed down prices.

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  • Most SE Asian markets fall; Malaysia down for 5th session in six

    Most SE Asian markets fall; Malaysia down for 5th session in six

    Most Southeast Asian stock markets fell on Monday, with Malaysia declining for a fifth session in six, while Indonesia extended gains on the back of financial and infrastructure stocks.

    “There are lots of pitfalls that could sideswipe the markets,” said Stephen Innes, head of trading APAC at Oanda, referring to the U.S.-China trade issues, N.Korea-U.S. summit and strong U.S. dollar.

    U.S. oil futures hit six-week lows on expectations major producers may ease output curbs, while Asian stocks and U.S. share futures gained on signs the United States and North Korea were still working towards holding a summit.

    In Malaysia, trading services firms including IHH Healthcare and Sime Darby were among the top losers. IHH Healthcare fell as much as 4.8 percent and Sime Darby plunged 9 percent on disappointing quarterly results.

    Vietnam shares fell as much as 2.9 percent to a more than five-month low. Vinhomes JSC declined 5.5 percent and Vietnam Prosperity Joint Stock Commercial Bank fell 5 percent.

    Indonesian shares climbed as much as 1.4 percent and were headed for a fifth straight session of gains. Bank Mandiri (Persero) Tbk PT rose 5 percent and Bank Central Asia Tbk PT climbed 1.1 percent.

    The central bank said on Friday that it would hold an additional meeting of its board of governors on Wednesday to discuss economic and monetary conditions.

    “We suspect that the persistent selloff in the rupiah and upward pressures on local government bond yields (despite the recent 25bps rate hike) may prompt further action,” DBS said in a note.

    “Further BI rate hikes may be needed, with the next one possibly as early as this week.”

  • Fuel price hike propels Vietnam’s May inflation to record high

    Fuel price hike propels Vietnam’s May inflation to record high

    Recent fuel price hikes have kicked up Vietnam’s Consumer Price Index (CPI) this month by 3.86 percent year on year, the General Statistics Office has reported.

    The hike was led by traffic and transportation services, which rose 1.72 percent over last month, followed by food and beverages by 0.88 percent and housing, construction and utilities by 0.34 percent.

    The increase in CPI this month is attributed to the fuel price hikes on May 8 and May 23, in which A95 and E5 fuel prices went up by VND1,010 per liter (4 cents), while diesel prices increased by VND960 per liter.

    The new gasoline prices have, in turn, pushed up the fares of transport services, said Huynh Quoc Thinh, CEO of the Phu My transport company. Fuel costs for containers and heavy trucks account for 40 percent of the total revenue. For other types of vehicles, the ratio is 30 percent.

    Higher transport tariffs could lead to higher general consumer prices, economists say.

    “Most of the products will have to suffer higher transportation costs, directly or indirectly, and therefore, the people will have to take the ‘full force’ of this increase,” economist Ngo Tri Long said.

    In addition to fuel price hikes, the plan to raise environment taxes on fuels starting in July could further increase inflation and hurt businesses in the country, the economists have warned.

    Under a Finance Ministry proposal being reviewed by the Standing Committee of the legislative National Assembly, the environment tax on gasoline will increase by 33 percent to VND4,000 per liter (17 cent).

    If approved, the tax increase would raise inflation by 0.11 to 0.15 percentage points in 2018. Vietnam has set an inflation target of 4 percent for this year.

    During a cabinet meeting last month, PM Nguyen Xuan Phuc warned that inflation could increase further as global prices of crude oil and basic commodities rose.

    “We cannot be careless when it comes to inflation,” he said.

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  • Cheers convenience store set expansion plan in Vietnam

    Cheers convenience store set expansion plan in Vietnam

    Singapore-Vietnam convenience store joint venture Cheers has opened its third store, on Dinh Tien Hoang Street in downtown Ho Chi Minh City.

    Operated by Vietnam’s supermarket operator Saigon Co-op and Singapore’s NTUC FairPrice grocery network, Cheers is open 24 hours, selling fast-moving consumer goods, mostly imported, along with payment services for utilities. The stores offer dine-in areas with free wifi.

    Nguyen Anh Duc, deputy general director of Saigon Co-op, said Cheers’ links with his company’s other businesses,including Co-opmart, Co-op Food and Co-opXtra, allows customers to earn and spend loyalty points across the network.

    The first Cheers store opened on Hoa Hao Street, in District 10, last December. The partnership plans to have 50 stores trading in Vietnam by the end of this year.

    Saigon Co-op also partnered with NTUC FairPrice in its Co-opXtra hypermarket stores.

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  • Mobile payment firms struggle to dethrone cash in Southeast Asia

    Mobile payment firms struggle to dethrone cash in Southeast Asia

    Bui Mai Phuong is an avid online shopper, ordering anything from clothing to personal-care products from her smartphone. But she prefers to pay with cash.

    She is among hundreds of millions of people whom firms such as Softbank Group-backed Grab and China’s Tencent want to win over as they try to tap into Southeast Asia’s burgeoning internet sector.

    More than 70 percent of the region’s 600 million-plus people do not use banks – higher than the global average of about 30 percent – and e-commerce is projected to hit $88 billion by 2025.

    But convincing consumers like Phuong, who lives in Hanoi, could be tricky.

    “I have never tried using mobile payments because I don’t know how to use it and it seems a bit complicated to use,” said Phuong, 36, a manager at a construction material supplier in Vietnam.

    Mobile payments are ubiquitous in China; a consumer can spend a day without using cash at all in Beijing or Shanghai, and even some beggars accept mobile payments. But cash remains king in Southeast Asia.

    Hard currency, paid on delivery, accounted for 44 percent of total e-commerce transactions last year and is likely to remain the most popular payment option for at least the next three years, according to data by research firm IDC.

    “The biggest challenge for users and merchants to adopt cashless is the fact that cash remains ubiquitous, easy to use and inexpensive,” said ride-hailing firm Grab, which has ventured into e-wallets.

    And the mobile payment marketplace in Southeast Asia remains wide open, with no dominant players.

    Indonesia’s ride-hailing firm Go-Jek’s Go-Pay, Singapore-based Grab’s GrabPay, Japan’s messaging app Line’s Line Pay, Momo e-wallet owner M_Service in Vietnam and Voyager Innovations, which operates Paymaya in the Philippines, have all entered the fray. The gaming company Razer Inc has also indicated it is eager to play a role.

    Cash on delivery costs e-commerce businesses more than other payment methods, said Alibaba Group Holding-backed e-retailer Lazada Group.

    For example, sometimes a customer does not have enough cash on hand, or is not home to pay for the delivery. In those cases, the product must be sent back to the seller, adding logistical costs, Lazada said.

    Mobile payments address some of those problems. They can also benefit buyers by keeping payment in escrow and releasing it only on delivery.

    But it can be difficult to persuade users to switch from cash when they earn about $200 on average a month in economies like Vietnam and Indonesia, according to economic data provider CEIC.

    “To break habits of using cash, Grab is creating more daily use cases for cashless payment – commuting, food delivery, paying at food and retail stalls – to drive more usage of the GrabPay e-wallet,” Grab said in an email.

    Mobile payment companies bet they can transform their platforms into financial supermarkets, offering everything from loans to insurance on top of payment options.

    Slow going

    At the moment, usage is spotty. E-wallets will account for 16 percent of total e-commerce transactions in Southeast Asia by 2021, up from last year’s 9 percent, according to IDC.

    In countries like Vietnam, where the informal economy has long been a key part of the social fabric, many consumers do not bother to get a bank account.

    Some want to stay under the taxman’s radar or, like Quang Thi Si, simply do not see the need for a bank.

    Si, a 48-year-old scrap collector near Ho Chi Minh City, said her business is all cash.

    “Sometimes I need to send money to my relatives at home, and I often send in cash through my friends,” she said. “I don’t think I will have a bank account in the future because I don’t think I need it.”

    But Si does have a smartphone. More than 90 percent of Southeast Asia’s internet access comes through mobile devices, according to a Google-Temasek study.

    Even so, in countries like the Philippines, which is known for having some of the slowest Internet speeds in Asia-Pacific, connectivity is a major hurdle for digital payments to clear.

    ‘Late to the party’ 

    Such challenges are likely to pose a setback to Ant Financial and Tencent, which are looking outside China for growth.

    Ant, which has 600 million customers and aims to reach 2 billion worldwide in the next decade, has stepped up investments in the region, including a stake in Thai financial technology firm Ascend Money.

    But its services are largely limited to Chinese tourists.

    “Most of our customers are from China and they are usually very happy to know that we accept AliPay and WeChat Pay. This makes them more willing to spend money too,” said Daphne Tan, a staff member at a shop selling durian-flavored coffee and snacks in Singapore’s Chinatown.

    Tencent plans to make its first foray outside China with an e-payment license in Malaysia for local transactions.

    The Chinese players are “kind of late to the party,” said Michael Yeo, research manager for IDC.

    “By the time they come in with a local version, if they do, the local players will have a significant advantage,” said Yeo.

    Razer, which said last month it would buy the remaining stake in payments processor MOL Global that it did not already own, also signed a deal with Singtel to link its e-payments network with that of the telco.

    Other recent deals in the sector include Go-Jek’s acquisition of three financial technology businesses, while Grab’s purchase of a handful of companies as well.

    “It’s a highly fragmented market. Later on, there will be acquisitions, there will be shutdowns, there will be mergers,” IDC’s Yeo said. “The market will consolidate.”

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  • Investment in Vietnamese startups booming

    Investment in Vietnamese startups booming

    A total of 92 Vietnamese startups raised $291 million in funding last year, said Mai Duy Quang of the Vietnam Software and IT Services Association at the opening of K-Startup Grand Challenge on Thursday.

    That’s a 45 percent increase in number of startups from 2016 and a 42 percent hike in total investment, according to a report by Topica Founder Institute (TFI), an annual program which trains and connects startups with potential investors.

    The biggest deal last year was Foody, a food social network startup, which was acquired for $64 million by Singapore-based SEA Group, one of the most valuable startups in Southeast Asia.

    Another major winner was popular e-commerce site Tiki.vn which received a $54 million investment from JD.com, China’s second biggest online retailer, despite reports of losses in recent years.

    The three most invested startup categories in Vietnam last year were e-commerce at $83 million, food technology at $65 million and financial technology at $57 million, TFI’s report said.

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  • Vietnam’s Techcombank readies for market debut after raising $922 mln

    Vietnam’s Techcombank readies for market debut after raising $922 mln

    Vietnamese lender Techcombank will list its shares on the Ho Chi Minh Stock Exchange next month, the bank said on Wednesday, making it the country’s seventh biggest firm by market value.

    Techcombank raised $922 million last month in one of the country’s biggest initial public offerings. Its cornerstone investors are Singapore sovereign wealth fund GIC, Fidelity Management and Research, and local fund Dragon Capital.

    The Hanoi-based lender said it would list on June 4 at a reference price of VND128,000 ($5.62), valuing the bank at $6.5 billion and making it Vietnam’s second-biggest listed bank after state-controlled Vietcombank.

    The shares will be allowed to move 20 percent higher or lower than the reference price on the first day of listing, according to exchange trading rules.

    Techcombank provides a broad range of banking products and services to more than 5.4 million customers in Vietnam through a network of 315 branches.

    The bank’s Chief Executive Officer Nguyen Le Quoc Anh said 2018 was a year of robust activity for Vietnam’s stock market as the economy showed strong growth momentum.

    “We believe this is a suitable time to list Techcombank after two years of preparation,” he said in a statement.

    Techcombank aimed to increase retail lending to 50-55 percent of total loans, up from 40 percent, in the coming years, while reducing the proportion of corporate loans, said Nguyen Xuan Minh, chairman of Techcombank Securities and head of Techcombank’s investment banking division.

    The bank aimed to increase its registered capital by nearly three times this year to better compete with regional rivals.

    “As the ASEAN Economic Community forms, our competitors are not only local banks but also banks from Thailand, Malaysia, Singapore. That’s our goal,” Quoc Anh said on Wednesday, referring to the group of Southeast Asian nations.

    Foreign investors own 22.5 percent of Techcombank. Vietnam limits foreign ownership in local banks to 30 percent.

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  • Vietnamese carriers far from world’s cheapest, high fuel costs to blame

    Vietnamese carriers far from world’s cheapest, high fuel costs to blame

    None of Vietnam’s carriers made it to the top 50 list of cheapest airlines by average ticket price per kilometer, according to a 2018 report on global flight price by Melbourne-based transport search engine Rome2Rio.

    The report analyzed about 1.5 million price points for economy-class airfares from Europe, Americas and Asia Pacific as displayed by Rome2Rio during this year’s first two months.

    At the top of the list were Australia’s Tigerair Australia, Malaysia’s AirAsia X and Indonesia’s Indonesia AirAsia at $0.06, $0.07 and $0.08 per kilometer, respectively.

    Meanwhile, Vietnamese carriers are falling behind, with Vietjet Air, Jetstar Pacific and Vietnam Airlines priced at $0.14, $0.15 and $0.30 per kilometer, respectively.

    The report also shows that Vietnam is ranked 15th in the list of cheapest average airfare per kilometer ranked by country.

    Vietnamese carriers’ higher-than-average airfares were due to high fuel costs, said an airline representative.

    “Vietnam’s fuel costs are 20 to 30 percent higher than other countries’,” the representative said. This representative also noted that fuel costs represent the highest percentage in an airline’s total operational costs, at 30 to 40 percent.

    Despite Vietnam’s status as a crude oil exporter, the country still heavily depends on importing refined oil from other countries.

    “Vietnam will not be free of imports of refined fuels, although combined diesel and gasoline imports will halve from about 200,000 barrels per day in 2016,” said Suresh Sivanandam, analyst at energy consultancy Wood Mackenzie.

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