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Tag: Vietnam

  • Cheap real estate in Vietnam draws scores of Chinese buyers

    Cheap real estate in Vietnam draws scores of Chinese buyers

    Vietnam has become an up and coming property investment destination among Chinese and Hong Kong buyers with real estate prices lower than in other Southeast Asian countries.

    Demand for properties in Vietnam among Chinese buyers surged 300 percent year-on-year in the first quarter of 2018, Chief Executive Carrie Law of Juwai, one of the biggest international property portal in China said.

    “Many investors from mainland China are hoping to see these cities [Ho Chi Minh City, Hanoi] replicate the same growth as Beijing and Shanghai,” said Stephen Wyatt, the country head of JLL Vietnam.

    Buyers from mainland China, Taiwan and Hong Kong last year accounted for 25 per cent of the Southeast Asian nation’s total transactions by foreign buyers, up from 21 per cent in 2016, according to data from real estate company CBRE Vietnam.

    Analysts say relatively low prices in Vietnam, one of world’s fastest growing economies, and the desire for Chinese buyers to diversify their portfolios given their limited assets overseas, make markets like Ho Chi Minh City, Hanoi particularly attractive.

    A high end property in central Ho Chi Minh City costs $3,000 to $6,000 per square meter. However, its equivalent in Bangkok costs around $7,000 to $9,000 per square meter, and still less than 10 percent of the value of Hong Kong properties.

    Vietnam’s relaxed restrictions on foreign property ownership are also believed to have facilitated the surge in Chinese and Hong Kong buyers, but to a lesser extent because bureaucracy remains a strong barrier.

    The 2015 Housing Law allows foreign investment funds, foreigners with valid visas, international firms with operations in Vietnam and overseas Vietnamese to buy residential properties with leaseholds of 50 years.

    And developers are allowed to sell only 30 percent of the units in each building to foreigners, meaning eligible apartments need to be advertised.

    However, analysts warned about the possibility of a real estate bubble in Vietnam, which is similar to the historic one in 2008.

    Eight out of 10 signs of a real estate bubble have been identified in the Vietnamese market, said Tran Kim Chung, deputy director of the Central Institute for Economic Management (CIEM) at a conference last week.

    Local residents and real estate agents said the price doubled last year’s, and has climbed a further 30-50 percent so far this year.

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  • Made-in-Vietnam woodwork conquering international premium markets

    Made-in-Vietnam woodwork conquering international premium markets

    With high quality and reasonable price, made-in-Vietnam woodwork has made its presence felt in luxury interior design projects worldwide.

    Last year, a team of 70 workers from Vietnam of design and construction company AA Corp were sent to the Caribbean to construct the interior of the luxury Park Hyatt St. Kitts resort. The $16 million project included components on interior design, millwork and loose furniture.

    Dubai based airline Emirates, the largest in the Middle East, also used Vietnamese-made woodwork for the interior of their first class cabins.

    “The U.S., Japan, Dubai, Singapore, Myanmar and Laos all have premium constructions with signature material from Vietnam,” said Nguyen Quoc Khanh, chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA).

    Premium hotel and resort corporations in the world such as Starwood, Accor, IHG, Marriott, Hilton and Fairmont all want to select Vietnamese businesses to design and construct the interior of their buildings, Khanh said, adding that these companies like made-in-Vietnam wood products because of their high quality and reasonable prices.

    With world class craftsmanship, Vietnamese wood businesses can now offer complete five-star woodwork instead of just selling individual products, said Nguyen Chanh Phuong, CEO of Danh Moc Limited Company, which designs kitchens.

    Approaching the high-end segment of the market is what local businesses have been aiming for for years, Phuong said, adding that with improved customer service and advertising, Vietnam can penetrate even further into the premium market.

    Vietnamese wood companies also need to thrive to achieve better product value instead of running after revenue goals and export targets, said Tran Viet Tien, CEO of Lavanto Home Décor, which manufactures a variety of home products.

    Businesses also need to invest more in automation, human resources and design to reach new heights, Tien said.

    Vietnam is currently world’s top five exporter of wood, behind China, Germany, Italy and Poland. Last year, Vietnam exported $8 billion worth of wood and forest products and the country aims to reach a $9 billion target this year.

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  • Vietnam’s The Gioi Di Dong closed stores

    Vietnam’s The Gioi Di Dong closed stores

    Despite revenue growth, Vietnam retailer Mobile World has shuttered six The Gioi Di Dong stores.

    It closed the outlets last month following one earlier closure with a plan to maintain 1065 stores nationwide. The company says it has decided not to expand its store network to focus on revenue growth, but with the closing spree revenue for The Gioi Di Dong last month dropped 5 per cent from a year earlier to US$126.85 million.

    Now The Gioi Di Dong looks set to open only 500 locations by the end of this year instead of the previous goal of 1000 stores, according to chairman Nguyen Duc Tai.

    Mobile World is also struggling with its grocery business, Bach Hoa Xanh, which has added only 3 per cent to the company’s profit.

    In the first quarter of this year, revenue reached $1.31 billion, up 43 per cent year on year, to produce profit of $45.94 million, up 44 per cent.

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  • Takashimaya is more losing money than profit

    Takashimaya is more losing money than profit

    Just one of Japanese department store chain Takashimaya’s three overseas stores is currently trading at a profit.

    But the company says it believes it can make them all profitable by 2023, including a fourth store set to open in Bangkok late this year.

    The successful store is on Singapore’s Orchard Road, which opened in 1993 and is reportedly earning more than 3 billion yen (US$27.2 million) annually.

    The chain’s Shanghai store, which opened in 2012, has been hampered by delays in the completion of neighbouring projects which would have drawn higher visitor numbers, along with administration costs running over budget. According to a report published by Nikkei, the store is expected to post its seventh consecutive loss in the 12 months to February next year, but should make money in 2020.

    The Ho Chi Minh City store in Vietnam, which opened in 2016, has “struggled from the start” according to Nikkei, its offer apparently too expensive for middle-class Vietnamese consumers. The company plans to boost sales by “broadening offerings of everyday items for families” which it hopes will lead it into profit in the 2022 year.

    The planned Siam Takashimaya store will be one of the anchors of Siam Piwat’s IconSiam, currently under construction and scheduled to open late this year – possibly in October.

    Takashimaya anticipates the Bangkok store to be profitable in its first year, thanks to rent concessions.

    The company’s president, Shigeru Kimoto, said it plans to continue Southeast Asian expansion, despite the challenges to date because it sees potential in the region.

    “In the long term, we seek to capitalise on Asia’s growth,” he said.

  • China no longer ‘easy’ on Vietnamese agricultural produce

    China no longer ‘easy’ on Vietnamese agricultural produce

    Vietnam should expand its agricultural exports to other markets instead of being dependant on China where standards on export items are being tightened, a meeting heard on Tuesday.

    China is now following international practices, tracing food origins and performing quality checks on imported agricultural produce, including those from Vietnam, said Tran Tuan Anh, Minister of Industry and Trade at the National Assembly meeting.

    The northern neighbor used to allow 100 Vietnamese businesses to export rice, but now only 27 of them are permitted, Anh said.

    For years, China’s fluctuating agricultural demand has also been hurting Vietnamese farmers. Many Chinese dealers have cancelled their deals with Vietnamese farmers, resulting in an oversupply of seasonal produce that are often exported to China through informal channels like watermelon and chili.

    Last year, volunteers in Hanoi had to start “rescue campaigns” to sell nearly 300 tons of watermelons which were being left to rot as there was a lack of demand.

    “If we keep focusing on the Chinese market and don’t look for alternatives, the consequences will be grave,” the minister said, adding that Vietnam should have new policies to remove export barriers.

    China is by far the biggest importer of Vietnam’s agricultural produce, accounting for 77 percent of total export turnover in the first four months of this year, whereas the U.S. only made up about 2.8 percent and Japan 2.7 percent.

    Large population, proximity and established trade relations explain China’s dominance. The country is also known to offer Vietnamese farmers attractive incentives.

    Vietnam exported about $36.37 billion worth of agriculture and fisheries products last year, according to the Ministry of Agriculture and Rural Development.

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  • Experts fear potential real estate bubble in Vietnam

    Experts fear potential real estate bubble in Vietnam

    Recent reports of land fevers have raised concerns over the possibility of a real estate bubble in Vietnam similar to the historic one in 2008.

    Eight out of 10 signs of a real estate bubble have been identified in the Vietnamese market, said Tran Kim Chung, deputy director of the Central Institute for Economic Management (CIEM) at a conference last week.

    They are increased numbers of transactions, new constructions, areas under development, participants in the market; rising prices; and presence of projects that are bigger in terms of scale, value and funding.

    The real estate market in Vietnam has seen a rush for land from late last year in Ho Chi Minh City and neighboring areas. Land in Dong Nai Province, northeast of Ho Chi Minh City, costs from VND72-90 million per square meter ($3,150-$3,980), which is nearly equal to some urban areas in HCMC.

    Local residents and real estate agents said the price doubled last year’s, and has climbed a further 30-50 percent so far this year.

    Land prices have also increased rapidly in three areas which are poised to become Vietnam’s special economic zones (SEZs) with promising benefits for investors. These areas include Phu Quoc Island in the far south, Bac Van Phong in central Khanh Hoa province and Van Don in the northern Quang Ninh province.

    On Phu Quoc Island, land prices in April were 10 times higher than in February, according to local invetsors. A square meter of land on the island can now fetch from VND20-60 million ($875 to $2,625), the Vietnam Real Estate Agency (VREA) said.

    The two remaining signs that would nail down a real estate bubble are a hike in public investment and housing capital, Chung said. But since these factors are currently actually counteracting market overheating, the worst is yet to come.

    Echoing Chung, chairman of Vietnam Real Estate Brokerage Association (VREBA) Nguyen Manh Ha said that the land fever in the first few months of the year, if not contained, will result in a land bubble.

    Some experts, however, beg to differ.

    The real estate market is actually stable and recovering, said Nguyen Van Dinh, vice chairman of VREBA adding that the current land fever is the result of short-term speculative trading that’s pushing up the price, which has destabilized the market.

    Amidst the land fever, Vietnam’s central bank has recently ordered lenders to tighten control over investment loans intended for the stock and real estate markets, warning of bad debt risks.

    Authorities of the three areas earmarked to be SEZs need to take control of the land market and prevent speculartors from creating instability, Vietnam’s Prime Minister Nguyen Xuan Phuc said last month.

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  • Ride-Hailing Firm Go-Jek to Expand Abroad

    Ride-Hailing Firm Go-Jek to Expand Abroad

    Indonesian ride-hailing and online payment firm Go-Jek on Thursday said it would enter Vietnam, Thailand, Singapore and the Philippines in the next few months, investing $500 million in its international push.

    The move will start with ride-hailing services before expanding to other sectors, Go-Jek said in a statement.

    “People in Vietnam, Thailand, Singapore and the Philippines don’t feel that they’re getting enough [choice] when it comes to ride-hailing,” chief executive Nadiem Makarim said in the statement.

    The announcement comes after Uber Technologies Inc sold its Southeast Asian operations to local competitor Grab.

    Go-Jek said it was working with regulators and other stakeholders across the region to prepare for the new operations.

    The expansion follows Go-Jek’s latest round of fundraising, which brought investment from companies including Astra International, JD.COM, Tencent and Temasek.

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  • Vietjet offers 1 million tickets for summer celebrations in Vietnam

    Vietjet offers 1 million tickets for summer celebrations in Vietnam

    Continuing the biggest promotion of the year “Free up your summer with Vietjet”, Vietjet offers a three-day series from today to May 25, 2018 with 1,000,000 tickets priced only from HKD0 during the golden hours of 13:00 to 15:00 (GMT+8) on its website. The promotional tickets are applied on all Vietjet domestic routes in Vietnam with the flight period from August 20 to December 31, 2018.

    The tickets are available on all channels during the golden hours of the “12pm, It’s time to Vietjet!” promotion program on the website www.vietjetair.com, or www.facebook.com/VietjetHongKong; payment can be easily made with debit and credit cards of Visa/ MasterCard/ AMEX/ JCB/ KCP.

    Aiming to be a “Consumer Airline”, Vietjet is continually opening new routes, adding more aircraft, investing in modern technology and offering more added-on products and services to serve all demands of customers. Vietjet is a pioneering airline that is loved by many for its exciting promotional and entertainment programs, especially during the festive season. With high-quality services, diverse ticket classes and special low-fare tickets, Vietjet offers its passengers flying experience on new aircraft with comfy seats, delicious hot meals, beautiful and friendly cabin crew, and other interesting added-on services.

  • Multiple Vietnamese banks report bad investments

    Multiple Vietnamese banks report bad investments

    Multiple banks in Vietnam have made bad investment decisions in recent years, according to a new report by the State Audit Office of Vietnam (SAV).

    Nine major financial organizations and banks were audited by the SAV in terms of management and use of state capital and property in 2016.

    The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) reported a loss of $5.34 million by the end of 2016 in their $9.62-million investment into their remittance company. The bank lost another $563,000 in a $5.9-million investment in its Vietcombank Fund Management company, the report said.

    The report also pointed out that the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) had invested a total of VND3.1 trillion ($137.8 million) in three subsidiaries and another 12 long-term loans worth VND280 billion. However, the state-owned bank had not earned any dividends from these investments.

    Another loss-making investment was made by the Co-operative Bank of Vietnam (Co-opBank) as a fixed-term deposit of VND585 billion ($25 million) in a stock company. The bank is having difficulties retrieving the money, the report said.

    Three other banks, which were bought by the State Bank of Vietnam for a zero-dollar price tag, were also reported to have poor credit management and accumulated a lot of bad debt. GPBank, OceanBank and CB Bank had a total of VND35 trillion ($1.5 billion) in bad debt, according to the report.

  • Most Southeast Asia stocks end lower; Indonesia posts 11-month closing low

    Most Southeast Asia stocks end lower; Indonesia posts 11-month closing low

    Most Southeast Asian stock markets reversed early gains to end lower on Monday with Indonesia marking its lowest close in more than 11 months while Vietnam shed 2.5 percent.

    Jakarta’s main index closed at its lowest since June 2017, with banking stocks bearing the brunt.

    Bank Rakyat Indonesia ended 6.1 percent lower, while Bank Negara Indonesia lost 3.6 percent.

    Bank Indonesia said it would conduct three foreign exchange swap auctions this week to ensure there is enough currency liquidity in the market after it hiked its benchmark interest rate last week to support the rupiah and plug capital outflows.

    “As the U.S. continuously raises interest rates, it’s impacting a lot of emerging markets, such as Indonesia. Hence, the central bank has to raise interest rates to stamp out capital outflows,” said Joel Ng, analyst at KGI Securities.

    The index of the country’s most liquid stocks shed 1.3 percent.

    Vietnam ended 2.5 percent lower, with real estate and financials leading the fall. Vingroup Joint Stock was the biggest drag on the index, closing 7 percent lower.

    “Foreign selling recently has hit Vietnam harder. We went up a lot in the first quarter, so the impact of profit-taking is greater now,” said Fiachra Mac Cana, head of research at Ho Chi Minh Securities.

    Singapore nudged up 0.54 percent to end at a one-week high, while Thai stocks gained for a third straight session.

    Petroleum explorer PTT Exploration and Production closed 3.4 percent higher, while Kasikornbank gained 2.4 percent.

    Thailand saw its fastest economic growth in five years in the first quarter, boosted by strong exports and tourism, plus a slight firming in private consumption.

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  • Despite growth, Vietnam’s beer market remains established giants’ playing field

    Despite growth, Vietnam’s beer market remains established giants’ playing field

    Many big companies have failed to tap into Vietnam’s competitive beer market despite steady growth, industry experts said.

    Nguyen Van Viet, chairman of Vietnam Beer, Alcohol, and Beverage Association (VBA), said that only big brands such as Heineken and Sabeco are doing well, while others are struggling.

    Take Sapporo for example, the company has maintained low levels of profit despite growing sales because of high operational and advertising costs, Viet said.

    Other big players have been even less successful. Masan Food, whose products are staples in Vietnamese families, has yet to dominate supermarket shelves with its White Lion premium lager beer four years after its launch.

    Another example would be, local dairy giant Vinamilk and British brewing company SABMiller (now belonging to Anheuser-Busch InBev). The two companies joined forces in 2006 to open a brewing venture. Their product has, however, failed to compete against other established brands and remains largely unknown. Vinamilk withdrew from the venture after just two years.

    However, the market is still considered a promising ones. Vietnam’s beer industry has seen a stable 5 percent annual growth even though world’s average consumption hasn’t budged in the past decade.

    According to Euromonitor’s Southeast Asia beer consumption report, Vietnam will be a noteworthy market in upcoming years given the current momentum.

    The international market research company also called Vietnam as “the next battlefield for brewers.”

    Vietnam consumed more than 4 billion liters of beer in 2017, according to VBA’s report.

    The industry aims to produce 4.1 billion liters of beer in 2020 and 5.5 billion liters in 2035

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  • US slaps heavy duties on Chinese steel shipped from Vietnam

    US slaps heavy duties on Chinese steel shipped from Vietnam

    The U.S. Commerce Department on Monday 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 decision marked a victory for U.S. steelmakers, who won anti-dumping and anti-subsidy duties against Chinese steel in 2015 and 2016 only to see shipments flood in from elsewhere. The industry has argued that Chinese products are being diverted to other countries to circumvent the duties.

    U.S. customs authorities will collect anti-dumping duties of 199.76 percent and countervailing duties of 256.44 percent on imports of cold-rolled steel produced in Vietnam using Chinese-origin substrate, the Commerce Department said in a statement.

    Corrosion-resistant steel from Vietnam faces anti-dumping duties of 199.43 percent and anti-subsidy duties of 39.05 percent, it said.

    The department has said it would apply the same Chinese anti-dumping and anti-subsidy rates on corrosion-resistant and cold-rolled steel from Vietnam that starts out as Chinese-made hot-rolled steel.

    The duties will come in addition to a 25 percent tariff on most steel imported into the United States that resulted from the Trump administration’s “Section 232” national security investigation into steel and aluminum imports.

    Although the steel subject to the latest anti-dumping and anti-subsidy duties was processed in Vietnam to be made corrosion resistant or cold-rolled for use in autos or appliances, the Commerce Department agreed with the claims of American producers that as much as 90 percent of the product’s value originated from China.

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

    The decision followed a European Union finding in November that steel shipments from Vietnam into the EU also circumvented tariffs.

    The Commerce Department said that after anti-dumping duties were imposed on Chinese steel products in 2015, shipments of cold-rolled steel from Vietnam into the United States shot up to $215 million annually from $9 million, while corrosion-resistant steel imports rose to $80 million from $2 million.

    The case stems from a petition filed by U.S. producers ArcelorMittal USA, Nucor Corp, AK Steel Holdings Corp and United States Steel Corp alleging that Chinese producers began diverting their steel shipments to Vietnam “immediately” after the duties were imposed.

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  • Vietnam starts antitrust investigation into Uber-Grab deal

    Vietnam starts antitrust investigation into Uber-Grab deal

    Vietnamese authorities have launched an investigation into Grab’s acquisition of Uber’s Southeast Asia operations, which has shown signs of breaching local antitrust laws.

    The investigation is estimated to take 180 days, starting Friday and can be extended by another 120 days, Vietnam Competition Authority under the Ministry of Industry and Trade said in a statement.

    Earlier the same week, the competition authority’s investigation found that Grab’s market share in Vietnam has gone up to above 50 percent since its ride-hailing rival Uber left the Southeast Asian market last month.

    Vietnam’s Competition Law from 2004 requires that all mergers and acquisitions (M&As) that result in a company gaining over 30 percent of market share must be reported to competition authorities. M&As that result in a company gaining over 50 percent of market share are restricted and can only be completed with permission from authorities.

    Previously, Grab claimed that its combined market share with Uber in Vietnam is less than 30 percent, so it doesn’t have to “inform to the competition authority before proceeding and completing this transaction in the country.”

    However, the ride-hailing app company was unable to submit evidence to prove that it did not violate the law.

    In late March, Grab announced its acquisition of Uber in Southeast Asia, which saw Uber taking a 27.5 percent stake in Singapore-based Grab, and Uber CEO Dara Khosrowshahi joining Grab’s board.

    Grab was last valued in July last year at an estimated $6 billion.

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  • Vietnam’s GDP growth to slow after record performance in Q1

    Vietnam’s GDP growth to slow after record performance in Q1

    Vietnam’s decade high growth in the first quarter is forecast to slow during the rest of the year, a parliamentary meeting heard on Monday.

    The country’s gross domestic product (GDP) grew 7.38 percent in the first three months thanks to strong performance in three key economic sectors, agriculture, industry-construction and processing-manufacturing, said deputy prime minister Truong Hoa Binh at the opening meeting of the 14th National Assembly, the highest legislative body in Vietnam.

    However, the deputy PM pointed out that GDP growth is unlikely to maintain its momentum for the rest of the year and slow down instead due to lack of any breakthrough factors compared to last year.

    In 2017, Vietnam’s economy expanded rapidly due to strong exports driven by South Korea’s electronics giant Samsung and Taiwanese steel firm Formosa.

    The deputy PM expects this year’s main driver of growth to be processing-manufacturing, the most likely sector to see any breakthroughs.

    Growth this year will be undermined by lower mining output, especially crude oil extraction which is forecast to be down by 2 million tons compared to 2017.

    The reduced tax on some items imported from ASEAN countries is also believed to obstruct growth, deputy PM Binh said.

    Vu Hong Thanh, chairman of the Economic Committee of the National Assembly, said high growth achieved in the first quarter has created a big challenge for the rest of the year if Vietnam is to aim for ever higher growth.

    Thanh is also concerned about increasing healthcare, education and food prices, which are forecast to contribute 2-2.5 percentage points to this year’s inflation hike.

    Protectionism and trade tensions between China and the U.S. have also affected Vietnam’s trade activities, Thanh said.

    The committee asked the government to pay greater attention to growth quality, restructure the economy and to continue to closely monitor the situation, keeping adjustments to fuel, service and food prices in mind.

    Vietnam’s annual trade now exceeds 185 percent of GDP, making it the second most trade dependent economy in Southeast Asia, behind Singapore, according to the Asian Development Outlook 2018 report released last month.

    The Ministry of Planning and Investment has forecast country’s economic growth this year to be at 6.7 or 6.8 percent.

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  • Indonesian ride-hailing app revs up to join Vietnam’s transport market

    Indonesian ride-hailing app revs up to join Vietnam’s transport market

    Indonesian ride-hailing app Go-Jek will officially launch in Vietnam this July, bringing more competition to the market currently dominated by Grab after it had acquired Uber’s Southeast Asia operations in March.

    Founded in 2010, the Indonesian transport startup has since raised over $1.5 billion from investors such as Google or China’s Tencent Holdings, as reported by Reuters.

    Starting out as a phone-based motorbike ride-hailing app, Go-Jek is now a digital platform which offers transportation, logistics and delivery services.

    To attract Vietnamese drivers, Go-Jek won’t initially charge drivers 20 percent commission fee and is offering free installation of its geographical positioning system.

    “This looks like an attractive offer, as I currently have to pay a commission fee of 28 percent for Grab,” Tuan, a Vietnamese Grab driver said.

    Singapore-based blockchain-powered ride-hailing app MVL is also reported to be entering Vietnam’s market in July.

    MVL would not require its driver to pay any commission, but instead generate a profit through selling data generated from its daily operations to insurance and market survey companies, said its CEO Kay Woo during a conference in HCMC earlier this month.

    Ever since Uber left the Vietnamese market last month, Grab has raised suspicions about creating a monopoly in Vietnam, now that one of its biggest rivals is gone.

    An investigation conducted by Vietnamese authorities has said that the deal between Grab and Uber showed signs of breaching Vietnam’s antitrust laws, as reported by local media on Wednesday.

    Preliminary investigation results showed that Grab’s share in Vietnam exceeds 50 percent of Vietnamese market after acquiring Uber, which is a potential sign of violating Vietnam’s regulation on economic concentration.

    Vietnam’s Competition and Consumer Protection Department is considering opening an official investigation into the deal.

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