Retail News CRM

Tag: Vietnam

  • Ho Chi Minh City to crack down on tax-evading Facebook retailers

    Ho Chi Minh City to crack down on tax-evading Facebook retailers

    The tax man is threatening to shut down social media accounts, but savvy retailers know that it’s an empty threat. Ho Chi Minh City sent out tax demands to nearly 13,500 Facebook retailers over a month ago, but a representative from the city’s Tax Department told that so far only around 1,000 of them have responded.

    As a result, the city’s tax authorities have decided to work on tougher solutions to crack down on potential tax-evading online retailers, and have asked the Ministry of Finance to finalize regulations regarding tax declarations and deductions at source, as well as the supervision of online business activities.

    The city’s tax department also said it is considering a name-and-shame approach to individuals and organizations that refuse to pay tax.

    To combat retailers that open multiple Facebook accounts to avoid detection, the department claimed it had come up with multiple solutions, such as closing down accounts or sending officials posing as customers to confront them in person.

    It also said it would ask the State Bank of Vietnam for copies of retailers’ bank statements to determine their incomes, and courier companies would be asked to provide information on the quantity and value of the goods they transport for them.

    However, many online retailers say that the tax man has no authority over Facebook.

    Nguyen Thi Cuc, who chairs the Vietnam Tax Consultants’ Association, also told that Vietnam does not have a comprehensive tax policy for online businesses, and that collecting taxes is difficult because most transactions are conducted in cash.

    Many retailers claim they already have business licenses and have declared tax, and only use Facebook to advertise their products, while others say they earn less than VND100 million ($4,400) annually so they are not required to declare tax by law.

  • Central Bank of Vietnam cuts rates by 0.25-0.5 per cent

    Central Bank of Vietnam cuts rates by 0.25-0.5 per cent

    The State Bank of Viet Nam (SBV) has cut several interest rates for the first time since 2014 in order to support business and boost economic growth.

    According to the central bank’s statement, 0.25 percentage points have been shaved off the annual refinancing interest rate, rediscount interest rate, overnight interest rate applied to electronic inter-bank payments, and the rate of loans to offset capital shortage in clearing payments between the SBV and domestic banks. The new rates go into effect today.

    Specifically, the refinancing rate has been reduced from 6.5 per cent per year to 6.25; the rediscount rate from 4.5 per cent per year to 4.25; and other rates from 7.5 per cent to 7.25 annually.

    The maximum annual short-term interest rate for loans in Viet Nam dong to meet customer demand for capital in some sectors has also been cut by 0.5 percentage points.

    Businesses operating in agricultural, export and auxiliary industries; small and medium-sized enterprises (SMEs); and high-tech firms will now enjoy a short-term lending rate of 6.5 per cent per year, instead of 7 per cent.

    The maximum rate applied to loans supplied by the People’s Credit Fund and other micro-financial institutions has been lowered from 8 to 7.5 per cent.

    These adjustments are expected to help increase bank liquidity for loans, stabilise interest rates, the foreign exchange rate and the foreign currency market, thereby contributing to controling inflation and achieving sustainable economic growth.

    Move welcomed

    Many experts welcomed this move, saying the adjustment is a good sign for the economy and enterprises, especially given that business and production is facing many difficulties, including shortage of capical and high interest costs.

    The rate cut will help reduce costs for commercial banks seeking loans from the central bank, boosting lending to enterprises at lower interest rates, they said.

    Tran Hoang Ngan, a member of the National Assembly’s Economic Committee, said this decision would consolidate the confidence of the market as it proves that the bank system’s liquidity has stabilised after the bad debts resolution.

    Tran Du Lich, a member of the National Monetary and Financial Policy Advisory Council, said the cut was modest, proving a cautious decision and not signaling monetary policy loosening.

    Financial expert Phan Minh Ngoc said that with lower interest, credit growth might be speeded up in the coming months, but because the SBV still keeps the ceiling credit growth target at 18 per cent, commercial banks approaching the cap must be choosier in selecting customers.

    “Thus, the adjustment basically is not an action to loosen monetary policy, but to help restructure the loans of commercial banks,” Ngoc said, adding that it was unlikely to raise inflation

    The central bank will be able to maintain the new interest rates as long as inflation is controlled at low level. But if the US Fed continues raising its interest rates, which would put pressure on the VND/US$ exchange rate, SBV might have to amend its policy, the expert predicted

    Following moves

    The Bank for Investment and Development of Viet Nam (BIDV) today also announced that the bank would apply a maximum annual interest rate of 6 per cent for short-term dong loans to prioritised enterprises in accordance with the SBV’s decision.

    Start-ups, environmental firms and the bank’s regular customers for at least three years will be able to enjoy the preferential rate, too. Firms and households affected by floods in the central provinces will be offered a maximum rate of 5.5 per cent, according to the bank’s press release.

    In another development, VPBank has become the first private commercial bank to reduce its short-term interest rates by 0.5-1 percentage points for SMEs. The preferential rates will depend on the production sector of the borrowers, the length of the credit relations they established, as well as their record of debt payment.

    Vo Tan Hoang Van, general director of the Sai Gon Commercial Bank (SCB), told Phap Luat Tp Ho Chi Minh (HCM City Law) that in the next two weeks, SCB would lower interest rates by 0.5 percentage points for new credit contracts serving production in prioritised sectors or being signed by SMEs.

    Some other banks also plan a cut in lending interest rates, but say the cut rates must be calculated based on liquidity conditions and taking account other measures to save costs and improve business performance, the newspaper reported.

    Nguyen Van Duc, deputy director of the Dat Lanh Real Estate Company, said that the cut of 0.5 percentage points was not so big but it would have a positive impact on the market and business profits, especially for large firms with heavy loans, he said.

    Ly Thanh Sinh, general director of the Minh Long Hung Garment and Embroidery Joint Stock Company, said that beside reducing interest rates, it was important for SMEs to access capital to buy machines and production equipment.

    Curently, annual short-term interest rates range from 6.8-9 per cent for regular businesses, and 6-7 per cent for prioritised ones; while medium and long-term rates hover around 9-11 per cent for the former and 9-10 per cent for the latter.

    Lees ook:

  • Facebook business must pay five per cent revenue tax

    Facebook business must pay five per cent revenue tax

    Small and home-based business owners who use the Facebook platform to sell products and have revenue of more than VND100 million (US$4,500) per year will be taxed at five per cent. The money will be paid through a tax registration, value added tax, personal income tax and other taxes depending on the goods they sell.

    “With revenue of over $4,500 each year, a business on Facebook paying nearly VND2 million ($90) for tax is acceptable,” Nguyen Thai Son, a taxation consultant, said in the Thanh Nien (Young People) newspaper.

    The tax level for those who have the same revenue in a traditional business is around four times higher, nearly VND8 million ($360), he said.

    In early June, the HCM City and Ha Noi Taxation Departments sent 13,400 notifications to Facebook businesses and over 1,000 businesses contacted with tax officials in HCM City.

    “To reduce tax losses from online business, tax authorities have woked with Facebook, Google and Apple Store to have e-commerce accounts, worked with banks regarding revenue and worked with police to have a list of those who haven’t paid tax,” Le Thi Thu Huong, deputy head of the HCM City Taxation Department said.

    “The taxation department will collect information from different sources and publish names of organisations and individuals who evade taxes, as well as request relevant authorities to close any e-commerce websites if they do not pay tax,” she added.

    Huong also said that individuals who have online business in social media will be provided a taxation registration and code.

    In developed countries, all people and organisations are required to declare income and pay taxes.

    “Collecting taxes on sales through social networks is necessary,” Huong added.

    Bui Quang Tin, a lecturer in business administration at HCM City University of Banking, said that transactions on the Internet are difficult to control and collecting taxes should be done step by step. Initially, there should be requirements that all individuals conducting business via Facebook must register their operations and declare their income.

    He also noted that with millions of Facebook accounts, in the first phase, the tax authority should target large and professional businesses, because many individual dealers operate as side jobs, or even seasonal businesses. If it tried to control all of them, it would use significant resources and probably be inefficient. The difficulty in managing online sellers and collecting taxes is said to be the consequence of the low rate of non-cash transactions in Viet Nam.

    According to an official estimation, e-commerce activity has been booming, with 80,000 active websites in the city, half of which run stable operations, but tax collection in the field was very poor, especially sales activities through Facebook.

    In fact, in 2015, revenue from e-commerce in Viet Nam reached $4.1 billion, an increase of five times compared with 2012. It is expected to reach $10 billion by 2020, accounting for 5 per cent of total retail sales in the country. Therefore, e-commerce will play a significant role in the Vietnamese retail sector in the future.

    Lees ook:

  • Vietjet offers free tickets on new South Korea – Siem Reap routes

    Vietjet offers free tickets on new South Korea – Siem Reap routes

    Vietjet today announced a sales promotion for new connecting flights from Seoul/Busan (South Korea) to Siem Reap (Cambodia), that will ease the travel budgets of individuals, tourists and businessmen flying between the famous localities.

    On this occasion, Vietjet is to run a three—golden-day promotion from July 12, 13 and 14, 2017 offering 200,000 air tickets priced from HKD0 only. The promotion applies for all international routes between Hong Kong / Seoul, Busan (South Korea) / Kaoshiung, Tainan, Taichung and Taipei (Taiwan) / Singapore / Bangkok (Thailand) / Kuala Lumpur (Malaysia) / Yangon (Myanmar) / Siem Reap (Cambodia) and travels from September 1, 2017 to December 31, 2017.

    The Seoul – Siem Reap route is operated daily with tickets priced from HKD430 (USD55). The flight departs from Seoul at 11h05 (local time) with transit in Hanoi and arrives in Siem Reap at 18h40 (local time). The return flight takes off at Siem Reap at 19h30 (local time), transits in Hanoi and lands in Seoul at 07h55 (local time).

    The Busan – Siem Reap route is operated daily with tickets priced from HKD550 (USD70). The flight from Busan departs at 08h35 (local time) with transit in Hanoi and lands in Siem Reap at 19h00 (local time). The return flight takes off at Siem Reap at 20h05 (local time), transit in Hanoi and arrives in Busan at 07h00 (local time).

    The promotional tickets are available for booking within the golden hours from 13:00 to 15:00 at their website. Payment can be easily made with debit and credit cards of Visa, MasterCard, JCB, KCP and American Express.

    With its high-quality services, special low-fare tickets and diverse ticket classes, Vietjet offers its passengers enjoyable flights with dynamic and friendly flight crew, comfy seats, amazing hot meals, special surprises from the airline’s inflight activities and amazing ticket fares through “12pm, It’s time to Vietjet” promotion.

    Lees ook:

  • Restaurant industry starts 2017 on sour note

    Restaurant industry starts 2017 on sour note

    The restaurant industry in the three largest cities of Vietnam struggled with weak sales and traffic throughout the first quarter of 2017, according to a report by Decision Lab, a marketing research company based out of Ho Chi Minh City.

    The number of customer visits to restaurants in Hanoi, Ho Chi Minh City and Danang for the three month period dropped 9% with average spending per visit plummeting 12% when compared against the previous quarter’s figures, said Decision Lab.

    The quarter closed with 20% lower total sales for the three cities than reported for the fourth quarter of 2016.

    The data collected from the Decision Lab Foodservice Monitor indicates that both full-service restaurants and quick service restaurants experienced a decline in sales and visits in the three month period.

    Meanwhile, street food and convenience store sales managed to maintain their market size.

    Decision Lab didn’t have a solid explanation as to what caused the substantial drop. However, the company rationalized that it was due to a variety of seasonal factors, mostly involving the Lunar New Year holiday.

    During the Lunar New Year, said Decision Lab, consumers have a higher tendency to travel out of the cities to their homeland.  They also spend more time with family and eating at home during the country’s biggest holiday.

    As Vietnamese consumers began saving for the biggest celebration of the year, they cut down on going to restaurants for Breakfast, Lunch, and Dinner, both in terms of visits and spending.

    As the quarterly Foodservice Monitor report from Decision Lab shows, Delivery is the only type of consumption that enjoys stability in its market size in quarter 1. Vietnamese still highly value the convenience of placing a delivery order, having their meal cooked by professional chefs and delivered to their doorstep. Especially before, during and after Lunar New Year when everyone is swamped with work, holiday preparation, and traditional rituals, the comfort a delivery can bring is even more appreciated.

    Although not cutting down on delivery per se, consumers did spend less per order as they stayed committed to their saving plan. To tackle this lower spending per order, restaurants can offer promotions that encourage more frequent orders from consumers. Operators should also consider offering snacks/drinks at lower price point, and cooperate with third party order platforms that take care of the delivery to save themselves on delivery cost.

    Lees ook:

  • Vietnam’s economic growth to out-tiger China by 2018

    Vietnam’s economic growth to out-tiger China by 2018

    Increased foreign investment is putting Vietnam on the right track. Swiss investment bank UBS has forecast that Vietnam will marginally outpace China’s economic growth for the first time in 2018.

    For the past 30 years, China has been the world’s fastest growing major economy, emerging as the star of Asia.

    However, last year China’s economy grew by 6.7 percent compared with 6.9 percent in 2015, according to official data, marking its slowest growth since 1990.

    UBS predicts Vietnam’s economic growth will expand by 6.5 percent in 2017, slightly lower than the 6.7 percent target set by the government, but still above 6 percent for the fourth consecutive year, defying the Asian slowdown.

    Vietnam’s economy expanded by 5.73 percent on-year in the first half of 2017, official data showed, mainly fueled by foreign direct investment (FDI), according to the UBS report.

    Vietnam’s FDI disbursement has grown at a compound annual rate of over 10 percent in the last five years, and actual disbursement reached a record $15.8 billion last year.

    During the first half of 2017, the country also welcomed over $19 billion in investment pledges, leaping 55 percent from a year earlier, mostly from North Asia’s technology powerhouses.

    The increased FDI flowing into Vietnam has resulted in a hike to the average income. The average monthly salary witnessed an increase of 88 percent from 2010-2015, according to UBS.

    By the end of this decade, Vietnamese urbanites are expected to earn an average $714 per month. Vietnam’s emerging consumer class, according to the report, will pave the way for investment growth in the country’s promising retail sector, especially with investment from overseas.

    However, UBS warned of the risk of trade protectionism following U.S. President Trump’s decision to ditch the Trans-Pacific Partnership this year.

    “Vietnam remains largely dependent on foreign capital and foreign technology. An FDI-led economic model is vulnerable and instable,” said Professor Pietro Masina of the University of Naples, who has spent years studying Vietnam’s economy.

    Lees ook:

  • Vietjet inks strategic aircraft financing agreement with German Operating Aircraft Leasing

    Vietjet inks strategic aircraft financing agreement with German Operating Aircraft Leasing

    Vietjet and German Operating Aircraft Leasing GmbH & Co. KG (GOAL), a joint venture of KGAL GmbH & Co. KG (KGAL) and Deutsche Lufthansa AG, today signed a strategic agreement paving the way for GOAL to finance Vietjet’s acquisition of four brand new A321 aircraft, worth US$464 million, according to the manufacturer’s listed price.

    Vietjet President & CEO Nguyen Thi Phuong Thao, Vietjet Vice President Dinh Viet Phuong, KGAL CEO Gert Waltenbauer and GOAL Managing Director Jochen Baltes represented both parties in signing the contract in the witness of the Vietnamese Prime Minister Nguyen Xuan Phuc and high-ranking dignitaries from Vietnam and Germany.

    The acquisition of the four aircraft is part of the A320 family aircraft contract signed earlier between Vietjet and European aircraft manufacturer Airbus. Vietjet will receive the four aircraft within 2017 to meet expansion plans for the airline’s domestic and international flight network.

    Speaking at the signing ceremony, GOAL Managing Director Jochen Baltes said: “GOAL and KGAL are very excited about the purchase and leaseback of these four aircraft with one of the world’s most dynamic low-cost airlines. Following this agreement, all parties will continue to work and cooperate together on more opportunities in aviation development in the coming time.”

    Vietjet President & CEO Nguyen Thi Phuong Thao commented: “We have received 16 new A321 aircraft from Hamburg, Germany, worth nearly US$2 billion in accordance with the manufacturer’s listed price, including Airbus’ 9,000th A320 aircraft, which created great excitement in Europe. Besides the fact that Germany has provided Vietjet with aircraft, we are truly delighted to work with GOAL, one of Germany’s top aircraft finance and aviation companies. Today’s deal ensures the financing and favorable conditions for Vietjet to further develop its modern fleet, thus helping to enforce the airline’s quality and safety in operations, a key part of our strategy for the long-term development of Vietjet.”

    Lees ook:

  • Multi-million dollar deals inked between Vietnamese, German firms

    Multi-million dollar deals inked between Vietnamese, German firms

    Prime Minister Nguyen Xuan Phuc is hoping expert German support will help accelerate Vietnam’s automobile industry. Vietnamese and German businesses signed 28 agreements totaling 1.5 billion euros ($1.7 billion) on Thursday during Vietnamese Prime Minister Nguyen Xuan Phuc’s trip to the European powerhouse.

    Trade between the two countries reached $9 billion last year, making up 20 percent of the total turnover between Vietnam and the European Union.

    German investment in Vietnam recently hit $1.8 billion, PM Phuc told a business forum on the same day.

    Phuc went on to say that Vietnam has been taking great strides in improving its business environment and opening up its market, with 12 free-trade-agreements already signed with different countries and blocs.

    With the automobile industry developing fast in Vietnam, he asked German firms to invest in the country’s support industries to enable it to produce more parts domestically, as well as cooperate with Vietnam in the energy sector.

    Responding to Phuc’s suggestion, a representative of leading German auto firm BMW said the company was interested in exploring investment opportunities and building an auto components plant in Vietnam.

    AeroGround Flughafen München GmbH, which offers ground handling services, said it was willing to train airport staff in Vietnam, while BPCE International expressed an interest in cooperating with Vietnamese lenders to pilot a new banking model.

    PM welcomed the interest, and said the Vietnamese government will create favorable conditions for foreign investors to operate in the country.

    Brigitte Zypries, German minister for economics and energy, said Germany wants to raise bilateral trade to $15-20 billion by 2020, while taking advantage of the free trade agreement Vietnam and the EU are about to sign.

    During his trip to Germany, the PM will attend the G20 summit on Friday and Saturday.

    Lees ook:

  • Hong Kong investor stakes $500 million to build racecourse in southern Vietnam

    Hong Kong investor stakes $500 million to build racecourse in southern Vietnam

    The company claims the track could earn $2.2 billion a year now that betting has been legalized in Vietnam. A Hong Kong-based company has been given the all clear to conduct a feasibility study for a racecourse in Vietnam’s southern city of Can Tho.

    SIBC International Ltd. met with the city’s leaders on Wednesday to discuss plans to build an entertainment complex that would cover over 150 hectares (370 acres).

    The project, which also includes a hotel, park and golf course, is expected to cost $500 million, it said.

    Once completed, the track could host up to 16 races a day and earn VND50 trillion ($2.2 billion) a year, the company said, adding that it would contribute VND10 trillion in tax each year and create around 20,000 jobs.

    Can Tho officials said the racecourse would help boost local tourism, but given its scale, the city would have to consult the central government before making a final decision.

    The Mekong Delta’s urban center attracted more than 5.3 million tourists in 2016, which was up 14 percent from a year ago and included 22,600 foreigners. Tourism earned the city more than VND1.8 trillion last year.

    Vietnam legalized sports betting earlier this year, allowing its citizens to bet on international soccer games and horse and greyhound races from March 31. The historic decision, made after years of deliberation, has made racecourses a viable investment option.

    The country currently has one greyhound track in the southern beach town of Vung Tau, and a $100 million horse-racing course was opened in the southern province of Binh Duong two months ago. Hanoi has plans to build a $500 million racecourse, but progress has been delayed.

  • Omnichannel retailing to deliver market win

    Omnichannel retailing to deliver market win

    The omnichannel model has become a new weapon in the race to maintain and expand market share in the electronics retail industry.

    The coveted Top 3

    A latecomer taking on established competitors, FPT Shop only started to strengthen its e-commerce channel in 2014. Within a single year, revenue from this business segment was only VND318 billion out of the total VND5.226 trillion ($13.98 million out of $229.91 million). FPT Shop’s website’s traffic reached a modest 100,000 visitors per day.

    In 2015, the firm’s e-commerce revenue posted VND568 billion ($24.98 million) and traffic doubled. In 2016, revenue from online sales grew by over 200 per cent, registering VND1.2 trillion ($52.79 million) and contributing approximately 10 per cent of its total revenue. Traffic was 800,000 visitors per day.

    Although FPT Shop’s e-commerce revenue in 2016 was only half of its largest competitor The Gioi Di Dong, this is considered an optimistic sign of greater opportunities as FPT Shop enters the potential e-commerce playground.

    According to Ngo Quoc Bao, director of business development of FPT Retail, FPT Shop has set a more ambitious target. “E-commerce revenue will double in 2017, crossing the VND2 trillion ($87.98 million) threshold,” said Bao. Such acceleration of growth shows FPT Shop’s intention toward professional omnichannel retailing. “We will continue the strong development of offline and online channels and the strategic partnership with companies like Google and Facebook to boost customer outreach,” remarked Bao.

    In order to achieve this, FPT Shop implemented comprehensive HR restructuring at the e-Commerce Centre from upper management to business strategy. While it used to open 5-7 stores a month, now the rate is only 1-2 stores per month, with no plans for further physical store expansion in the near future. Its current store count is 430.

    According to Bao, as FPT Shop entered the online arena later than its competitors, it has to reach one million customers this year. To achieve this, FPT Shop must boost traffic, optimise user experience to increase returning visitors, ensure confidentiality, convenience, and timeliness in online payments.

    The Gioi Di Dong (MWG) is arguably the first entrant to the online retail realm. This major name is in possession of the largest market share, with 10 per cent, thanks to a formidable online presence that is considered superior to that of Lazada (mostly owned by Alibaba) and Zalora (wholly owned by Nguyen Kim and Central Group).

    According to market research firm Euromonitor International, although market shares fluctuate year to year, MWG continues asserting its dominance among online retailers since 2011. MWG determined hefty targets for online retail as revenue from this source is set to double over-year to VND6.65 trillion ($292.55 million). The company’s total supermarket count will reach 1,207, of which thegioididong.com accounts for 951, Dien may XANH 256 for supermarkets and 40 for stores. Along with all this, Vuivui.com, a dedicated e-commerce site, will play a crucial role in the company’s strategy.

    Nguyen Duc Tai, president of MWG, commented that middle and high-school students tend to make more and more online purchases. Vuivui.com is the company’s investment for this future consumer base. The platform may even become MWG’s growth driver by 2020. “But for now, physical stores remain MWG’s chief money maker,” said Tai.

    Talks of the race to expand among the likes of FPT Shop and MWG cannot leave out Vien Thong A, a name ringing fewer bells, who is currently ranked third in the online retail arena. This retailer had an impressive year in 2016, where it opened 63 new supermarkets nationwide, boosting total count to nearly 300. Additionally, the retailer’s revenue went up by 30 per cent on-year.

    Besides tackling the coverage target and growth at least of 30 per cent, this year Vien Thong A will expand its online sales activities, which in 2016 generated only 5 per cent of the revenue made through traditional channels.

    Hoang Ngoc Vy, CEO of Vien Thong A, said the company is looking to expand its B2B online business in order to meet the ever-increasing demand. “The development of omnichannel tactics to offer services regardless of location and timing is our top priority,” remarked Vy.

    In order to jumpstart this business segment, Vien Thong A has to meticulously identify a strategic investor as its partner in this race.

    A game of speed

    According to Euromonitor International, by 2020, online electronics retail will grow at 30.9 per cent CAGR, reaching VND20.985 trillion ($923.18 million). Meanwhile, purchasing behaviour is changing, shifting to more time spent online, leading the offline channel to saturation, with increasingly limited room for growth.

    In reality, omnichannel retailing has been steadily gaining ground for the past three years in Vietnam as mini-scale online stores started mushrooming on Facebook with numerous online sales tactics.

    Especially, Zalo (VNG) launched Zalo Shop to provide independent online merchants with a direct platform to 60 million customers without acquiring technical capabilities. Zalo users can conveniently “browse” thousands of stores on the uniform interface of Zalo Shop and easily make purchases without searching on Facebook or Google. Boasting these advantages, the online channel, more than ever before, has become considerably lucrative.

    According to statistics by Google, Vietnam is second in the world in terms of the number of online retail merchants. Whether this form of retail can grow sustainably remains, however, a question as customers are hesitant to accept/trust these independent small-scale businesses.

    Such prospects push retailers towards change. They admit the never-before-seen potential of omnichannel in awakening the market and capturing new customer segments.

    Bao commented that FPT Shop must expand its coverage and get ahead of market demand. However the Vietnamese consumers are naturally sceptical. Online buyers would visit offline stores to browse the merchandise, compare the products and prices. Therefore, it is advisable that companies stay mindful of their physical chains.

    Logistics above all

    “Never coerce consumers to online channels, since physical visits are conducive to unintended additional purchases. It depends on geographic and taste factors that enterprises coordinate their channels, hence enhancing brand recognition,” said Bao.

    In the race of omnichannel retailing, the essential survival tip is understanding, satisfying, and building trust with customers. To achieve this, retailers are responsible for guaranteeing the authenticity, quality, and timeliness of merchandise. Logistics, therefore, should be an investment priority.

    The Gioi Di Dong used to outsource its logistics but has since developed its own delivery capabilities. FPT Shop utilises its own store staff for delivery.

    “In that way, our delivery staff can directly consult the customers on product use and ensure our reputation,” commented Bao.

    Regarding logistics, Luong Duy Hoai, CEO of Giao hang nhanh (GHN) said, in the future, a product from abroad can easily reach Vietnamese consumers. The same goes for Vietnamese goods sold to other countries.

    Therefore, it is no longer a matter of speed but of agility to comprehend and lead the industry landscape by market shares. The challenge for modern retailing is the shipment of million, even tens of millions, of orders on a daily basis. The ultimate success factor lies in a delivery network that can address the complexities of increasingly customised demands. It is up to each retailer to rapidly transform its model according to the current technological trends.

    Lees ook:

  • Vegetable and fruit exports face tough competition from imports

    Vegetable and fruit exports face tough competition from imports

    With turnover of $375 million in May, fruit and vegetables were among the biggest export items for Vietnam, while imports of the same equalled $183 million.  The high export turnover of $375 million represented a sharp increase of 75 percent in comparison with the same period last year.

    The increase of $161 million in vegetable and fruit export turnover made up 26 percent of the total exports increase of 13 key farm produce and agriculture material items.  Analysts said the target of $3 billion in vegetable and fruit export turnover this year is within reach.

    However, Vietnam, which takes pride as a big vegetable and fruit exporter, also had to import $183 million worth of products in May, a sharp rise of 79 percent compared with the same period last year, raising the import turnover to nearly half a billion of dollars in the first five months of the year.

    Nguyen Dinh Bich, a trade expert, pointed out big problems in the market structure. The exports to the Chinese market have been increasing rapidly from less than 30 percent in 2014 to 65 percent in 2015.  The growth rate exceeded 70 percent in 2016, while it reached 75.5 percent in the first five months of 2017. In 2014, Vietnam exported $435 million worth of products to China, but exported $1.054 billion to other markets.

    The trend reversed in 2015: while exports to China increased sharply by $760 million in turnover to $1.195 billion, exports to other markets decreased by $410 million to $644 million. The same situation was seen in 2016 and the first five months of 2017.

    “Do Vietnam’s fruit flow to China’s Guangxi province to be sorted and labeled as ‘made in China’ for re-export to the world market?” Bich asked, emphasizing that Guangxi is China’s ‘fruit granary’ with output of 359 kilos per head per annum,1.8 times higher than the average level of the country.

    Imported fruits are displayed in advantageous positions at supermarkets for the upper and middle class, and sold at high prices.

    Thai exporters enjoy big benefits from the Vietnamese market. In May 2015, Vietnam imported $13 million worth of fruit from Thailand, which accounted for one-third of total fruit import turnover.

    Meanwhile, the figure soared to $38 million in May 2016 and to $129 million in May 2017.

    Lees ook:

    Lees ook:

  • Concerted action needed for M&A breakthrough

    Concerted action needed for M&A breakthrough

    It is forecasted that the value of mergers and acquisitions (M&A) deals in 2017 will not exceed those of 2015 and 2016, thus, the market needs a boost from enterprises and the government to leverage the opportunities from foreign capital to make a breakthrough.

    In 2016, the total value of all M&A deals over the world was $3.5 trillion, a reduction of 27 per cent on-year, but a high value nevertheless. However, this could be considered an ending of the global M&A’s growth period. Due to Brexit and Donald Trump’s new policies, global M&A activities are becoming harder to predict and there may be some shifts in the flow of investment capital in the world.

    According to the statistics of the Institute for Mergers, Acquisitions and Alliances (IMAA), Vietnam hit a 10-year record hike of $5.2 billion in M&A activities in 2015. In 2016, the value of M&A deals was $5.1 billion, even though experts said that in the second half of 2016, the growth was slowed down because not many big M&A deals were publicised at the time.

    It is forecasted that in 2017 without a breakthrough, the total value of M&A deals in Vietnam may not overtake 2015 and 2016 figures. For a breakthrough, the Vietnamese M&A market really requires a boost.

    The most vibrant industries with the highest number of M&A deals in 2016 were the retail sector, consumer goods production, and real estate. The finance and banking industry did not have many outstanding activities last year. Some other fields, such as education and technology, also attracted M&A investment in 2016.

    Foreign capital has been playing an important role in M&A activities in Vietnam with numerous sizeable deals. For example, Japanese enterprises are now strategic partners to many state-owned enterprises, such as Vietnam Airlines and Petrolimex. Similarly, a number of South Korean enterprises joined the Vietnamese market by investing in agriculture, and investors from Singapore have been paying close attention to some real estate projects.

    According to some assessments made by the government and investors, the progress of equitisation and the state divestment from big enterprises is slow. A wide range of Vietnamese enterprises are luring in investors after being equitised or divested by the state, such as Saigon Beer-Alcohol-Beverage Joint Stock Corporation (Sabeco), Hanoi Beer Alcohol and Beverage Joint Stock Corporation (Habeco), Vietnam Mobile Telecom Services Company (MobiFone), and Vietnam Dairy Products Joint Stock Company (Vinamilk).

    Currently, Sabeco and Habeco’s stocks have been listed on the stock exchange. However, most investors said that this step was implemented more slowly than they had expected.

    There are numerous challenges for the growth of M&A in Vietnam, including changes in the US policies, the withdrawal of the US from the Trans Pacific Partnership or the various obstacles to equitisatisation, the problems of enterprises’ quality, and the scale of the Vietnamese economy.

    To achieve at least 2016’s $5.1 billion in deal value, the state divestment in some Vietnamese enterprises should be implemented more quickly and thoroughly.

    Lees ook:

    Lees ook:

    Lees ook:

  • Credit growth expected to rise 16.33% in 2017

    Credit growth expected to rise 16.33% in 2017

    The total loans of the banking system are expected to grow by 16.33 per cent in 2017 against December last year, lower than the Government’s limit of 18 per cent.

    The State Bank of Viet Nam released the information this week after conducting a survey on business performance trends of credit institutions in the second half of this year.

    The survey also shows that credit institutions forecast the total capital mobilisation of the banking system to rise 16.02 per cent in 2017, of which dong contributes to a rise of 16.59 per cent and foreign currency 1.14 per cent.

    The General Statistics Office (GSO) has reported that credit growth in the first half of this year was 7.54 per cent, the highest in the past six years. The new record, considerably higher than the previous record of 6.28 per cent set in 2015, reflects the market’s significantly improved capacity to absorb capital, the GSO said.

    Loans in the period were mainly focused on prioritised and large projects as instructed by the Government, accounting for roughly 50 per cent of total outstanding loans. Agriculture and rural industries, and small- and medium-sized firms received around 19 per cent and 22 per cent of the total outstanding loans, respectively.

    Lending interest rates were 6-9 per cent per year for short-term loans, and 9-11 per cent per year for medium- and long-term loans. For customers with transparent finances, short-term lending rates ranged from 4-5 per cent per year.

    The banking system’s capital mobilisation in H1 has risen by 5.89 per cent, and deposit interest rates have been relatively stable. Interest rates for dong deposits were 4.5-5.4 per cent per year for short term, 5.4-6.5 per cent per year for medium term, and 6.4-7.2 per cent per year for long-term deposits.

    The Government has targeted credit growth of 18 per cent for 2017, but at the National Assembly meeting recently, some deputies suggested that this limit be raised so as to support economic growth.

    Analysts at Bao Viet Securities (BVS) also recently forecast that the central bank may consider raising credit growth targets for several banks to aid economic growth.

    The Government has been under intense pressure to loosen its monetary policy as the country is determined to meet its GDP growth target of 6.7 per cent for 2017. However, the fiscal policy has been struggling with disbursement of public investment, the BVS analysts said in a report. By end of May, disbursement of public investments had touched VND88 trillion, equal to only 30.6 per cent of the entire year’s estimates.

    The BVS analysts said when fiscal policy does not support growth well, pressure will intensify on monetary policy. Increasing credit growth targets of several banks may be an option worth considering, the analysts said.

    Lees ook:

    Lees ook:

  • Vietnam’s pork crisis ain’t over yet

    Vietnam’s pork crisis ain’t over yet

    Vietnamese farmers have been hit by a glut in supply for months.

  • ICAO President impressed by Vietjet’s superb performance

    ICAO President impressed by Vietjet’s superb performance

    The superb performance of Vietjet in its operations, services and management has gained the appreciation of the Council of the International Civil Aviation Organization (ICAO).  The ICAO delegation, led by president Dr. Olumuyiwa Benard Aliu and ICAO APAC Deputy Regional Director Manjit Singh Seva Singh, visited the Vietjet office during its trip to Vietnam from 5 to 10 July, 2017.

    Speaking at the meeting with the Vietjet management board members on the first day of their visit, Dr. Olumuyiwa Benard Aliu said he highly appreciated the airline’s efforts and achievements in its operations, services and management activities. He also stressed on its comprehensive investment in building up human resources and training highly skilled experts that meet the internationally standardized safety requirements for operation and management, which greatly contributed to not only the airline’s success but also the growth of the aviation industry in Vietnam and the region.

    Dr. Nguyen Thanh Hung, Vice chairman of Vietjet Board of Directors, Mr. Luu Duc Khanh, Managing Director and other management members of Vietjet warmly welcomed the ICAO delegation. Mr. Luu Duc Khanh said: “Safety is our top priority not only in operations but also in the entire airline’s activities. Safety requirements conformity has been the guideline for us in all operations and policy decision we have made. We are happy that our technical reliability rate stood at 99.59% in the first quarter of the year and flight operation, ground operation and engineering safety indicators were also listed in the group of highest quality airlines in the Asia Pacific region”.

    Following their working agenda in Vietnam, the ICAO delegation today met with high-ranking officials of the Vietnamese Government, the Ministry of Transport, and Civil Aviation Authority of  Vietnam (CAAV) followed by their granting of the Council President Certificate to the representatives of CAAV in Hanoi. The certificate recognizes Vietnam’s significant progress in resolving safety oversight deficiencies and improving the effective implementation of ICAO Standards and Recommended Practices

    Lees ook: