Ho Chi Minh City, The southern economic hub of Vietnam has attracted 3.21 billion USD in foreign direct investment (FDI) in the first six months of 2019, a year-on-year rise of 20 percent, according to the municipal People’s Committee.
The city granted new investment licences to 598 projects worth over 539 million USD, up 15.8 percent and 3.6 percent respectively.
Following the increasing trend of direct investment, GBS – a company incorporation services firm in Vietnam started its support program for Foreign Investors, and this program can streamline investment procedures and help achieve more investment in a variety of industries.
“We have launched a variety of services to meet our Japanese customers’ demands, which will support not only Japanese investors, but also local suppliers, distributors, and end-users across a variety of industries, including food, agriculture, and retail”. said Ms. Sophie Dao, Partner of GBS.
Real estate received the largest share of FDI, absorbing over 41 percent of the total capital, followed by professional activities, science and technology – 21.9 percent, wholesale and retail, repair of automobiles, motorbikes and other vehicles – 19.5 percent, and processing and manufacturing industry – 5.8 percent.
In January – June, 145 existing projects were allowed to add a combined of over 300 million USD to their investment, up 22.8 percent and 81.6 percent respectively.
The city also allowed 2,307 foreign investors to contribute capital, buy shares, and acquire stake of domestic enterprises with total registered capital of 2.37 billion USD.
Le Thanh Liem, Vice Chairman of the municipal People’s Committee said the city has carried out trade and investment promotion activities since the beginning of the year, which helped reinforce trust of domestic and foreign businesses in the local investment environment.
However, he noted that despite increases in the numbers of projects and the total investment, each project is averagely valued at below one million USD.
“The projects are at small scale. Over the past year, the city has yet to attract any large-scale ones,” he added.
Therefore, in the coming time, the city will push ahead with administrative reforms and prioritize selecting financially strong investors who use modern and environmentally friendly technologies, he added.
Vietnam has demanded China immediately end violations and withdraw all vessels from its waters and respect its sovereignty and jurisdiction to preserve bilateral relations and ensure peace and stability in the region, Foreign Ministry spokesperson Le Thi Thu Hang said on Friday.
She made the statement in response to reporters’ queries about Vietnam’s stance on the statement by a Chinese Foreign Ministry spokesperson on July 17 about the developments in the East Sea (South China Sea).
Hang said Chinese geological survey vessel group Haiyang Dizhi 8 recently violated Vietnam’s exclusive economic zone and continental shelf in the south of the East Sea, which belongs to Việt Nam in line with the 1982 United Nations Convention on the Law of the Sea (UNCLOS), to which both Vietnam and China are members.
Vietnam had contacted the Chinese side many times via different channels and handed over diplomatic notes to protest the violations, she said, adding that Việt Nam’s authorities at sea continued adopting proper measures to enforce the nation’s sovereignty and jurisdiction in a peaceful manner in line with international law.
“As confirmed by the Vietnamese Foreign Ministry’s spokesperson on July 16, Vietnam’s consistent stance is to peacefully struggle in line with international law against any violation of its sovereignty, sovereign right and jurisdiction over the seas defined in the 1982 UNCLOS,” she said.
The official said “maintaining order, peace and security in the East Sea is a common interest of countries both inside and outside the region. Vietnam wants concerned countries and the international community to protect and maintain this joint interest.”
Vietnam’s Phu Cat airport will be ready for international flights come September after recently completing upgrades to the tarmac, domestic terminal and radar system.
Phu Cat Airport is the airport serving Qui Nhon city of Vietnam. It locates in Phu Cat District between the towns of Ngo May and Dap Da, around 30 kilometres northwest of Qui Nhơn within Binh Dịnh Province along the South Central Coast of Vietnam.
Phu Cat airport has secured commitments from Vietnam Airlines, Bamboo Airways, and VietJet Air to launch international flights once the airport upgrades are complete and certified. Together, the airport and carriers are also working with tour operators to attract tourists.
The airport has drawn upon VND10 billion ($429,000) funding from Airports Corporation of Vietnam (ACV) for terminal repairs and upgrades, and all work will be completed by the end of August.
That will see its older terminal will be converted to an international terminal, while the newer one continues to serve domestic flights, says the Civil Aviation Authority of Vietnam (CAAV).
Cirium’s schedules data shows the airport services domestic routes to Hanoi and Ho Chi Minh, operated by Vietnam Airlines, Bamboo Airways, VietJet Air, and Jetstar Pacific. So far, it has handled Airbus A320 and A321 jets.
Vietnam Airlines will launch international flights to China, four times weekly, while Bamboo has plans for direct flights to Seoul, starting September.
“Bamboo Airways’s three domestic routes between Qui Nhon and Hanoi, Ho Chi Minh, Hai Phong are operating at more than 90% capacity. As such, offering international flights to the region is the carrier’s top priority” said Vuong Tran Quang Tran, Bamboo Airways’ chief representative in Binh Dinh province.
“Launching more international flights at Phu Cat airport will meet the travel needs of both domestic and international tourists, and promote the province’s social and economic development,” he adds.
Prime Minister Nguyen Xuan Phuc of Vietnam made the statement during his reception for Yanai Tadashi, Chairman and CEO of the Japanese group Fast Retailing in Hanoi on July 18, during which he affirmed Japan is one of Vietnam’s leading economic partners.
PM Phuc praised business and investment activities of Fast Retailing in Vietnam, saying that with its population of over 96 million, Vietnam is a potential market for Japanese textiles and garment products. The People, a state-run media reports.
Operation of Japanese firms in Vietnam will contribute to strengthening strategic partnership between the two countries, he added.
Prime Minister Nguyen Xuan Phuc and Yanai Tadashi, Chairman and CEO of Fast Retailing (Photo: NDO/Tran Hai)
For his part, Yanai Tadashi said his firm will develop a retail system in Vietnam in the coming time, along with its apparel products.
Since last November, Fast Retailing has provided training programmes for Vietnamese students in Japan and Southeast Asian nations, so as make them representatives of Fast Retailing not only in Vietnam but also other countries worldwide.
He suggested the Vietnamese Government direct competent agencies to grant construction and retail licenses to the group, enabling it to expand investment and business activities in Vietnam.
Prime Minister Phuc assigned the Ministry of Planning and Investment, relevant ministries and sectors to deal with the group’s proposal.
There’s a common saying within the C-suite that a trade war has no winners. But recent reports suggest maybe one victor is emerging from the U.S.-China trade spat: Vietnam.
According to data from Japanese investmentbank Nomura, Vietnam is the largest recipient of product orders diverted from thefeuding nations, as importers attempt to avoid trade war tariffs. The value oforders divertedto Vietnam in the first quarter of the year was equivalent to 7.9% of theSoutheast Asian nation’s GDP. Meanwhile the second largest recipient, Taiwan,only took on additional orders equal to 2.1% of GDP. Eamon Barrett reports on Fortune.
The U.S President Donald Trump sees that shift as evidence the trade war is working. On Monday morning after Beijing revealed China’s slowest quarterly economic growth in 27 years—rising just 6.2% over the second quarter last year, when the trade war began—Trump tweeted out, “The United States tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving.”
Donald Trump, The US President
In fact, manufacturers have been emigrating from—or, more often, expanding beyond—China for years. The trade war has added some impetus to that movement, but not every industry can afford to be so flexible.
Stanley Chao, managing partner of All In Consulting, which advises small- and medium-sized enterprises on how to do business with China, says there are a lot of smaller, specialized manufacturers that are stuck in China because nowhere else has an adequate supplier ecosystem.
“They’re waiting for bigger players to make a move so that they can piggyback off of the larger companies into new markets,” Chao says. “That’s exactly what they did in the past. They piggybacked into China.” Despite media reports, Chao adds, bigger companies aren’t rushing to leave China. It can take years to develop new supply chains and, ultimately, China will continue to be a valuable market.
Why Vietnam?
For those that can expand, however, Vietnam is an attractive destination. Wages are low, education is relatively high, and Hanoi has struck Free Trade Agreements with most major economies, as both a sovereign state and as a member of ASEAN. The EU ratified a free trade agreement with the Southeast Asian nation just last month, which will see duties removed on 99% of Vietnamese imports over the next seven years.
At home, the government has invested heavily in promoting high tech manufacturing, opening three multi-billion-dollar science parks across Vietnam’s major cities—Danang, Hanoi and Ho Chi Minh—and is opening three new Special Economic Zones at port towns, to add to the 18 SEZs it already has. It should be noted, however, that the new trio of SEZs have seen stiff opposition from protestors who worry about Chinese industries snapping up land on Vietnamese soil.
“The pace of Chinese investment has definitelyaccelerated in recent months, to the point where there are buses of Chineseinvestors literally running around industrial parks and pointing at plots ofland saying, ‘I want this, I want that,’” says Alberto Vettoretti, managingpartner of Asia-focused consultancy Dezan Shire & Associates.
According to the consultancy, China rose from seventh to fifth place among Vietnam’s leading foreign direct investment contributors in 2018, pumping $2.4 billion into the economy. In the five months through May, China’s rank increased to fourth place; it would be a clear winner if its ranking incorporated investment from Hong Kong, which has injected over $5 billion of capital into Vietnam so far this year.
Entering the Sinosphere
The surge in Chinese investment has pros and cons for Hanoi. Some investors are bringing legitimate business, hiring opportunities and advanced tech. Others, however, are simply speculating on the real estate market as Vietnamese factory space reaches a premium. Worse yet, a number of buyers are opening tariff-dodging assembly plants where Chinese components are repackaged and exported to the U.S. in an illegal practice known as ‘transhipping.’
Vietnam’s customs agency vowed to crackdown on transhipment after finding “scores” of such cases in June, but the violation had already caught the attention of the “Tariff Man” himself.
“A lot of companies are moving to Vietnam, but Vietnam takes advantage of us even worse than China. So there’s a very interesting situation going on there,” Trump said in an interview with Fox Business on June 26. Trump went on to declare that Vietnam was the “single worst abuser of everybody.”
The U.S. commerce department slapped a 400% levy on Vietnamese steel imports at the beginning off this month, since it suspects the material has origins in other countries. Whether the U.S. will ratchet up more pressure on Vietnam is unclear. “No one has a crystal ball,” Vettoretti says. For now, the best thing or Vietnam to do is take advantage of its moment in the spotlight and put some of that increased investment to good use.
The battle for technological dominance between the United States and China is splitting the world in two, though not always along the lines you might expect.
According to a report by Raymond Zhong on the New York Times, American allies such as Britain and Germany have signaled that they are unlikely to back Washington’s effort to stop countries from working with the Chinese technology giant Huawei, which American officials call a Trojan Horse for Beijing’s cyberspies. Australia has barred the firm from building its next-generation 5G cellphone networks, even though its economy depends on China’s appetite for natural resources. South Korea and the Philippines have not, despite past frictions with China.
And then there is Vietnam. At first glance, this fast-developing nation might seem to be a natural customer for Huawei. Its economy is entwined with China’s, and Beijing has embraced the country’s Communist Party leaders in Hanoi as ideological brethren.
Yet Vietnam’s leading mobile carriers appear to be keeping Huawei out of their 5G plans, even if the government’s fear of incensing Beijing most likely prevents them from saying so.
All around the world, the Trump administration’s assault on the Chinese firm has turned the purchase of telecommunications equipment from a business decision into a geopolitical one — a test of national allegiances to Washington or to Beijing.
In Southeast Asia, which has been transformed by Chinese money, Huawei has been widely welcomed. The firm opened a 5G testing station in Thailand this year. Indonesia’s communications minister recently told Reuters that the government could not be “paranoid” about Huawei, while Malaysia’s prime minister has said his country will use the company’s technology “as much as possible.”
In Vietnam, though, major mobile carriers have explored 5G collaborations with Ericsson and Nokia, but not with Huawei. The largest among them, Viettel, does not use Huawei equipment in its current 4G network, either, though it has no problem using Chinese technology in some of the other countries where its local subsidiaries provide 4G service, including Cambodia, Laos and Peru.
In Viettel’s telling, none of this means the company, which is owned by the Vietnamese government, is shunning Huawei. Hanoi has never barred Vietnamese telecom providers from using Chinese equipment, Tao Duc Thang, a Viettel deputy general director, said in an interview with The New York Times.
That means Viettel and Huawei could still team up someday, Mr. Thang said. “For the future, we don’t know.”
Vietnam was not always so wary of Huawei. When Viettel began building its 3G network a decade ago, it signed agreements with Huawei and another Chinese supplier, ZTE. @ Linh Pham for The New York Times
But observers expect that Vietnamese carriers will err on the side of caution when they sign commercial 5G agreements. China and Vietnam fought a brief but bloody war 40 years ago, and Hanoi has watched warily as its northern neighbor’s wealth and military ambitions have grown ever since.
“The whole world needs to be careful with China,” said Maj. Gen. Le Van Cuong, the former director of the Institute of Strategic Studies at the Vietnamese Ministry of Public Security. “If a superpower like America regards China as a cybersecurity threat, then of course Vietnam has to.”
Huawei has long denied that it takes orders from Beijing or that its products are a security risk.
“Vietnam has not been a strong 4G market for Huawei, and we have modest ambitions for 5G there,” said a company spokesman, Joe Kelly.
Mobile internet coverage has increased quickly in Vietnam, and the government is in a hurry to develop its networks further. Today, even remote mountain, coastal and island communities have 4G. Vietnamese leaders say they want 5G connections ready next year, hoping that ultrafast internet will give a jolt to economic development.
But the country’s sour recent relations with Beijing may have made officials nervous about entrusting the task to Chinese companies. Although the two nations see eye to eye on censoring and controlling the internet, they have been at odds for years over territory in the South China Sea, which Vietnam calls the East Sea. After China placed an oil rig off Vietnam’s coast in 2014, marauding crowds of Vietnamese workers stormed factories and attacked Chinese laborers.
In response, Hanoi has cautiously cultivated closer ties with Washington. Still, China is Vietnam’s largest trading partner, and Chinese companies have brought in capital and job opportunities. Living in China’s backyard means Vietnam must keep its powerful neighbor close, but not too close.
“We can’t pick up and move the country somewhere else,” said Do Tien Sam, a former director of the Institute of Chinese Studies at the Vietnam Academy of Social Sciences in Hanoi.
And so Hanoi has endorsed Beijing’s Belt and Road Initiative, an enormous global infrastructure plan. But it has not officially labeled any new building projects as being part of the program.
Close but not too close seems to be the strategy with Huawei, too.
“They don’t want to give China a reason to be angry,” said Alexander L. Vuving, a Vietnam specialist at the Daniel K. Inouye Asia-Pacific Center for Security Studies in Honolulu. “Any indication that the Vietnamese government discriminates against the Chinese would be used as an excuse for the Chinese government to put more pressure on Vietnam.”
Plenty of Chinese tech firms have a lively presence in Vietnam. Along Hanoi’s motorbike-filled streets, cellphone shops advertise Chinese brands such as Xiaomi, Oppo and Vivo.
Vietnam’s leading mobile carriers have explored 5G collaborations with Ericsson and Nokia, but not with Huawei.Linh Pham for The New York Times
Vietnam’s leading mobile carriers have explored 5G collaborations with Ericsson and Nokia, but not with Huawei.Linh Pham for The New York Times
The country was not always so wary of Huawei’s telecom equipment. When Viettel began building its 3G network a decade ago, it signed agreements with Huawei and another Chinese supplier, ZTE, according to the research firm TeleGeography.
Thanh Son Dang, a partner in Hanoi at the law firm Baker McKenzie and a former general counsel for Viettel, said Vietnam’s laws regulating the telecom industry sent a clear signal to companies about where their priorities should lie.
“In any regulation, the government of Vietnam always highlights the importance of national security,” Mr. Dang said. The ghosts of wars with China and the West are never far from mind, he said.
Huawei may not be officially banned in Vietnam, but officials here go to great lengths to avoid talking about it.
Last month, Vietnam’s deputy minister of information and communications, Nguyen Thanh Hung, agreed to an interview with The Times. But when a Times reporter arrived in Hanoi, the Ministry of Information and Communications postponed the interview repeatedly over the course of a week.
In the end, no interview took place. The ministry also declined to answer written questions.
Mr. Thang, a deputy general director at Viettel, was initially more open when he met a Times reporter at the company’s offices in Hanoi.
Viettel has been developing its own software and equipment for many years, Mr. Thang said, and employs 300 engineers in research and development. It has designed and produced its own base stations, which exchange radio signals with cellphones, and its own computer systems for billing customers’ accounts, he said.
Most mobile carriers simply buy these things from outside vendors such as Ericsson or Huawei. Mr. Thang said Viettel had deployed around 1,000 self-produced 4G base stations across Vietnam, Cambodia and other countries.
But when asked whether Viettel’s aim in developing its own equipment was to help keep its networks secure, Mr. Thang first consulted in Vietnamese with a company communications officer, Le Duc Anh Tuan, who then answered in English.
The most important reason for Viettel to develop its own software, Mr. Tuan said, is so it can respond more nimbly to customers’ changing needs. Security is not the main factor, he said.
Asked why Viettel didn’t use Huawei in Vietnam but did use Chinese suppliers elsewhere, Mr. Tuan said equipment makers gave the company different deals in each country. “We have many partners,” he said, and Viettel considered each of them on its merits.
At that point, Mr. Thang quietly asked another colleague in Vietnamese how much time had been promised for the interview.
One hour, she replied.
“Why so long?” he said.
Mr. Thang gave vague answers to a few more questions about Huawei before Mr. Tuan said that only five minutes remained in the interview, and that Mr. Thang did not have anything more to say about Huawei.
The white sand is already scorching my feet when I take an early morning stroll along the beach on Cam Ranh Bay in southeastern Vietnam. The turquoise-green water shows barely a ripple at this time of day. After arriving late the night before from the bustling capital Hanoi, I can’t quite believe my luck.
According to 7 News, this is not what I had expected on my first trip to this Southeast Asian country. Humidity, chaotic cities and good food yes, but not beaches from paradise.
The Cam Ranh peninsula has only opened up to tourists in recent years. In the past, the deepwater bay has served as a military port for Vietnam’s long line of invaders: the French, the British and the Americans – oh and the Russians once stationed boats here too.
High-end hotel developers are queuing up to stake a claim on this new, prime slice of real estate, and there is plenty of construction along the northern stretch of the bay – a contrast to the serenity out at sea.
Thankfully, my colonial-style resort The Anam is a vast, tranquil haven of tropical gardens, water fountains, spongy green lawns and lagoon-style infinity pools. It’s an Instagrammer’s dream, and there are plenty of props around – such as romantic double swinging seats – to help you capture that perfect, languorous shot.
The villas also delight, harking back to the Indochine era, with lanterns and big-bellied water vases, mosaic floor tiles, and baths in enclaves with grand views of palm-fringed courtyards.
When I visit in June, the start of the local summer holiday, the hotel is close to full occupancy. There are plenty of Australians among the guests too, with Jetstar now flying direct to Ho Chi Minh City. I wonder if people ever leave the resort; there is little need and no one seems in any hurry.
Despite The Anam’s popularity, it’s 300 metres of Long Beach reserved purely for guests remains almost empty. Perhaps it’s too hot, perhaps people prefer the pools. I’m not complaining; I float about in my tropical bath while gazing at the necklace of surrounding jungle-swathed mountains, the dribble of offshore islands and the traditional sampan bobbing among them.
This ocean is a trove of delights, offering stunning coral reefs and some of the country’s best diving and snorkelling. From the hotel, there is also kayaking, sailing, surfing and body-boarding on offer.
While the beach and ocean are heavenly, what gets me most excited by The Anam is its food. The Colonial Restaurant offers fine dining European fare with a focus on French dishes, while the Indochine serves delectable buffets. But my favourite is Lang Viet Restaurant, with panoramic views of the lawns, beach and ocean.
Vietnamese food, with its fresh, punchy flavours, is a highlight of any trip and The Anam captures them perfectly in a cooking class at Lang Viet. My chef talks me though the essential ingredients: garlic, shallots, chilli, lemongrass and ginger. Side by side we create Vietnamese fresh hand rolls, sweet and sour fish soup, simmering fish with caramel in a clay pot, chicken with lemongrass, and green papaya and beef salad. I feast on my endeavours for lunch and take home a book of the recipes.
As much as I don’t want to tear myself away from The Anam, I force myself. After all, one of Vietnam’s liveliest resorts is just a half hour’s drive north along the coast.
A city of over 500,000, Nha Trang is best loved for its six-kilometre sandy beach and impressive promenade dotted with parks and sculpture gardens. It’s perfect for an early evening walk, when a welcome breeze wafts in over the waves after another steamy day.
The city’s main attractions include the striking 19th-century Long Son Pagoda, decorated in mosaic dragons and with stunning views over Nha Trang; the Po Ngar Cham Towers, built by the early Hindu empire in the eight century and still used in Buddhist worship; and for the less spiritual, Vinpearl, Vietnam’s biggest theme park, whose flashing neon lights glisten in the snaking Cai River.
I spend the late afternoon zipping around the city on two wheels with David, my own guide from Nha Trang Vespa Tours. He asks me what I love about Vietnamese food, what I have and haven’t tried, and devises an itinerary of street food stalls and eateries he thinks I’ll love. He nails it – we taste Vietnamese omelettes stuffed with mussels, shrimp and chicken, fluffy rice-flour pancakes, and traditional pho made with homemade noodles. I begin to understand why the Vietnamese find European fare so bland.
As night falls we wander under the night markets’ hanging lanterns, drinking pretty milky drinks stuffed with fruit, jelly and tapioca balls. There’s the usual tacky bags and clothes on display but sellers here are remarkably passive compared to other parts of the world, so I can take in the experience in peace.
We end the night with cocktails at the high-up Havana Beach Club, which enjoys the best views in town. I gaze out across the lit-up reverie of Nha Trang to the black East Sea beyond (don’t call it the South China Sea here) and the twinkling dots of boats fishing for squid.
And I look south down the dark coastline towards the peaceful haven of Cam Ranh, which many people in this city below wouldn’t even know was there.
IF YOU GO
GETTING THERE: Jetstar operates three flights per week between Sydney and Ho Chi Minh City, from $279 one way (conditions apply). Jetstar Pacific operates domestic flights within Vietnam. For more info, visit http://www.jetstar.com
Cam Ranh International Airport is one hour’s flight from Ho Chi Minh City and an hour and a half from Hanoi.
STAYING THERE: The Anam has a wide selection of elegant villas, some with private pools. Rooms start from around $250 per night. For more info, visit http://www.theanam.com
The writer travelled as a guest of The Anam and Jetstar.
Shopee, Tiki, and Lazada lead the market in website traffic.
Sendo is improving quickly, surpassed Thegioididong, and threatening Lazada’s position.
Voso.vn, newcomer from Viettel Post, increased 12 times in traffic and appears in the list for the first time.
Similar to previous years, consumer demands for e-commerce in Q2 is slightly lower than the quarter before. However, there has been a significant growth compared to the same time period last year. Competition-wise, Lazada continues to lag behind Shopee and Tiki in web traffic, while Sendo shows big improvement and enters the national top 4 for the first time, according to iPrice’s Map of e-Commerce.
Shopee and Tiki lead in web traffic, Sendo shows big improvement
According to iPrice Group’s Vietnam Map of e-Commerce for quarter 2, similar to the previous two quarters, Shopee and Tiki continue to hold on to the top two spots of e-Commerce merchants with highest average monthly website traffic. Shopee earned 38.5 million visits per month, while Tiki earned 33.7 million visits per month.
This also marks the third consecutive quarter that the Vietnam-based Tiki has surpassed the Alibaba-backed Lazada in this aspect. Lazada Vietnam earned 28.3 million visits per month in quarter 2 and once again lag behind their two biggest competitors in the country.
Chart: e-Commerce websites in Vietnam with the highest average monthly web traffic for Q2/2019, Source: iPrice
This past quarter brought about many significant changes for Lazada Vietnam. Last July, they appointed James Dong to the position of Country CEO in place of Max Zhang, who had only been in this position for a year. Mr. Dong will hold this position in concurrent with his duty as Lazada Thailand’s CEO. According to iPrice’s data, Lazada has been performing well in Thailand, earning traffic high enough to lead the country and leave their main rival, Shopee Thailand, behind. Therefore, with this appointment, Lazada is hoping to replicate their success in Thailand in Vietnam.
Before that, in June, Lazada also announced a branding makeover across the region, aiming to make themselves more relatable and more appealing for the young consumer segment.
Besides the top three which shows no changes compared to quarter 1, the most noticeable improvement in the ranking comes from Sendo. Sendo’s average monthly web traffic increased by an impressive 10%, rising from 25.3 million to 28 million visits. This result helps them to enter the national top 4 for the first time ever, surpassing Thegioididong. More importantly, iPrice noted that Sendo is the only merchant in the top 5 which did not record a decrease in web traffic for this quarter.
With this surge in traffic, Sendo has come very near to Lazada in the ranking. The web traffic difference between them is now less than 300,000 visits per month. Considering that only a year ago, this difference was more than 16 million visits per month, Sendo, an FPT Corporation subsidiary, has truly come a long way.
Chart: the top 4 e-Commerce merchants’ progress in web traffic in the last 5 quarters, Source: iPrice & SimilarWeb
In a recent press report, Trần Hải Linh – CEO of Sendo, shared that he attributed the company’s recent success to their C2C model, which brought them a huge amount of products within a short period of time, and their understanding of the Vietnamese market, which has become their advantage against foreign competitors.
Online shopping demand dropped slightly in Q2
Overall, iPrice’s data shows a slight decrease in market demand for online shopping this last quarter. In particular, 6 out of the 10 merchants leading the market witnessed a web traffic decrease compared to Q1.
However, analysts from the researching division comment that this is not a worrying sign for the Vietnamese e-Commerce industry and is instead only an expected seasonal trend of the market. iPrice points out that during this same time period in 2018, the average web traffic of the market also decreased significantly yet quickly picked up again a quarter later.
iPrice attributes this trend to a fall in market demand for fashion and consumer products compared the annual peak which is the period before Lunar New Year in February. The researchers also predicted that as big annual sales festivals like 7/7 or 9/9 are fast approaching, the market should be back to its growth rate by next quarter.
Voso.vn’s web traffic grew 12 times in one month
Voso.vn, the latest merchant to join the competitive e-Commerce market, was included in iPrice’s list of top 50 Vietnamese e-Commerce merchants for quarter 2, even though the website was only officially launched by Viettel Post Corporation earlier this month.
Coming in as number 50 in the ranking, Voso.vn is still considered by the researchers as a potential big player. iPrice noted that during June, Voso.vn’s web traffic increased by 12 times compared to May. This achievement once again confirms Viettel Post Corporation’s ambition for Voso.vn. The company does not hesitate to express this ambition by clearly announcing their aim to make Voso.vn the number one e-Commerce website in Vietnam.
Chart: Voso.vn’s web traffic for the last three months, Source: iPrice & SimilarWeb
Commenting on the merchant’s chance, iPrice noted that they have some very important advantages, such as the already established delivery network of Viettel Post, as well as their connections to Viettel Telecom and ViettelPay, both of which can become affective channels for consumer outreach.
With this addition of Voso.vn, the e-Commerce race in Vietnam is far from decided.
Personal money appears to be shifting from stocks and bank deposits to corporate bonds.
The Vietnamese financial market is now witnessing a corporate bond issuance boom with noteworthy characteristics.
First, there are many large-scale bond issuance campaigns. VietinBank, for example, has decided to mobilize VND10 trillion worth of capital through bonds in 2019.
Second, the interest rates of bonds have been pushed up to a record high level of 14.45 percent per annum, which is much higher than medium- and long-term lending interest rates offered by commercial banks (10-12 percent).
Third, many large corporations have joined the market.
The Vietnamese financial market is now witnessing a corporate bond issuance boom with noteworthy characteristics.
APEC has successfully found VND50 billion worth of capital from the issuance of corporate bonds with an interest rate of 11 percent per annum. A senior executive of the company said the issuance serves as a ‘reagent’ to explore the market before the company launches larger issuance campaigns.
The Ministry of Finance (MOF) reported that in 2018, businesses successfully mobilized VND224 trillion worth of capital through bond issuance, an increase of 94.5 percent compared with 2017. The total value of bonds issued by the end of 2018 had reached VND474.5 trillion, or 8.6 percent of GDP in 2018.
Thoi Bao Kinh Te Sai Gon said the corporate bond issuance boom shows the high demand for capital and capital mobilization channels. The bond suppliers are commercial banks and enterprises, while the investors include commercial banks, insurance companies, investment funds and individual investors.
In general, commercial banks’ bonds have low interest rates, therefore, the investment demand will come only from other banks and insurers. This is because the risk appetite of the two groups of investors is lower than other investors.
However, as businesses’ bonds have higher bond yield, they can attract attention from all investors.
The increase in number of investment funds in Vietnam has also generated demand for the corporate bond market. The Vietcombank fund management company and VNDirect have set up two funds which specialize in making investment in corporate bonds.
Meanwhile, the increase in insurance premiums, estimated at 20 percent per annum, is a reason for insurance companies to increase investments in bonds.
However, the most noteworthy feature is the sharp rise in demand from individual investors.
Previously, individual investors mostly paid attention to stocks, real estate and bank deposits. However, professional securities companies and fund management companieshave succeeded attracting individual investors’ money into corporate bonds.
Investors can expect higher interest rates if they invest in bonds than bank deposits, even if they sell bonds before maturity.
Enterprises now issue bonds at interest rates of 11-12 percent, while market makers distribute the bonds at the interest rates of 9-10 percent per annum.
Police in Ha Tinh Province are set to charge three local men who inadvertently burned down a patch of forest while smoking beehives.
Cao Huy Chuong, 48, Luong Xuan Thinh, 52, and Nguyen Van Suu, 46, face charges of “breaching regulations on fire prevention and fighting,” a crime that carries up to eight years’ imprisonment.
According to investigators, the trio entered the Khe Nhong forest in Huong Son District to collect honey on June 23.
They smoked a hive in a tree and collected the honey, but as they were leaving, they saw smoke rising from the area and realized they had caused a fire.
They tried to put it out but failed. A strong wind then carried the fire to nearby river-leaf creepers and bamboo trees. The trio became scared and fled the scene.
The blaze caused losses estimated at VND250 million ($10,750).
Recently the Ha Tinh police also arrested a 46-year-old man for accidentally setting fire to 30 hectares of forest while burning trash at home and a woman for burning down three hectares of forest while burning grass.
From June 25 to 30, forest fires broke out in the communes of Nghi Xuan, Loc Da, Duc Tho, Huong Son and others in Ha Tinh Province amid recurring heat waves, turning over 250 hectares (617 acres) of forest to ash.
The Department of Crop Production has warned farmers about possible risks when growing Thai jackfruits without planning.
In early 2019, farmers started growing a lot of Thai jackfruits after Chinese traders started buying the fruits at high prices. A kilo of Thai jackfruit was sold for VND35,000 (USD1.51) to VND45,000. Sometimes the prices went as high as VND50,000 to VND60,000.
However, the expansion of Thai jackfruit cultivation was done in a hurry and without a plan. The trees are planted in unsuitable soil which were used for plantations or rice fields.
Le Thanh Tung, deputy head of the Department of Crop Production, said Vietnam had 26,174 hectares of jackfruit last year which provided an output of 307,534 tonnes of fruits. Of which 38.6% of the farming area and 37.1% of the output were from the Mekong Delta.
Since early 2019, an additional 1,140 hectares have been used for growing jackfruit, most of the new cultivation areas are in Tien Giang, Hau Giang and Can Tho provinces.
According to Tung, since jackfruit is not considered the key export fruit in many provinces, there aren’t any investment or support policies. Farmers also do not have a detailed plan for intercropping or conversion from rice land. Spontaneous and scattering jackfruit cultivation means high risks during the monsoon season, especially when embankment systems are not complete.
Tung also raised concerns over diseases because there are many difficulties in providing and managing clean and quality seedlings.
“Because we depend hugely on border trade with Chinese traders so there will be market fluctuation and risks we can’t manage,” he said.
Tran Bac Ha, former chairman of BIDV, died while being held for alleged banking violations in Hanoi.
Colonel Do Quang Mao, a senior official at the 105 Military Hospital, told VnExpress that Ha, 62, was brought dead to the hospital Thursday morning by staff members of a prison in Hanoi’s Ba Vi District.
Since the death happened in an area outside the hospital’s jurisdiction, the police’s forensic team would decide the cause of death, Mao said.
Ha, former chairman of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), the country’s second largest listed bank, was under investigation for “very serious” violations committed during his tenure.
He had worked at BIDV for 35 years until retiring in September 2016. Ha was arrested in November last year.
In its report in June last year, the Central Inspection Committee, the top watchdog of Vietnam’s Communist Party, concluded that Ha had violated the democratic centralism principle and working regulations, was guilty of mismanagement, as well as violations of the duties and responsibilities of his position.
Ha violated credit procedures and regulations in approving a number of loans, investments and debt management decisions. In particular, he enabled 12 companies owned by Pham Cong Danh, former chairman of Vietnam Construction Bank (VNCB), to borrow VND4.7 trillion ($206 million) from BIDV.
While BIDV eventually managed to retrieve this money, the loans had helped Danh steal over VND9 trillion from VNCB. At a trial in 2016, Danh was sentenced to 30 years in prison, the maximum jail term allowed by Vietnam’s Penal Code.
In addition to holding Ha responsible, inspectors found that the standing committee of BIDV’s party unit for the 2010-2015 and 2015-2020 terms had also violated the democratic centralism principle, showed lack of responsibility, poor leadership and lack of inspection and supervision.
These violations in turn enabled multiple systematic violations to occur at BIDV, causing very serious consequences and resulting in many staff members being criminally prosecuted, negatively affecting the lives of all BIDV employees, the inspectors said.
Ha was expelled from Vietnam’s Communist Party in June 2018.
During a trial that opened in January regarding violations committed by Danh and Tram Be, a former deputy chairman of Sacombank who also let Danh borrow money from his bank, Ha was summoned as a witness and a person with related interests and obligations.
However Ha did not attend the trial, and his lawyer said he was being treated for cancer in Singapore.
The trial was eventually postponed due to a lack of evidence or a strong enough argument to press charges against Danh, Be and 44 other bankers.
When the trial resumed in July last year, Ha was summoned again, along with 234 other people. He did not show up, as he was reportedly still in Singapore for treatment. Danh was sentenced to 20 years in jail while Be received four years.
The BIDV arrests were part of a nationwide corruption crackdown that has ensnared hundreds of public officials and business people over the past three years.
A number of plastic waste items are on view at an admission-free exhibition in Hanoi, serving as a stark reminder of just what humans have done to the ocean and marine life.
The highlight of the Réduisons! (Reduce!) exhibition, held by PRX-Vietnam at the Institut Français de Hanoï – L’Espace at 24 Trang Tien Street, Hoan Kiem District from July 15 to August 31, is an art installation made of around 500 kilograms of used plastic items and designed as a giant wave of trash.
This artwork, made of numerous plastic items including bottles, cups, bags, straws and foam boxes that were washed and cleaned, is placed upside down on the ceiling of the exhibit, making visitors feel like they are walking under a sky of trash.
As some parts of the ‘plastic waste sky’ are so low that visitors can even touch them, they also give the impression that people are being engulfed in a sea of trash with no escape routes.
In addition to the giant installation, the organizers also set up several infographic illustrations along the venue to present serious messages about the alarming situation of plastic trash in Vietnam.
Notably, an electronic board displaying the amount of garbage discharged by Hanoi citizens with real-time updates is placed right at the entrance of the exhibition.
PRX-Vietnam is a cooperation office between the People’s Committee of Hanoi and the Île-de-France region, with the support of Agence Française de Développement (AFD), focusing on climate, biodiversity, peace, education, urban development, health and governance.
Vietnam is one of Asia’s five worst polluters, and ranked 17th in the world for ocean plastic waste pollution, with 13 million metric tons of waste released to the ocean every year, according to international organizations.
Vietnamese Prime Minister Nguyen Xuan Phuc has recently asked for plans to phase out the use of plastic products in Vietnam with the goal of making the country free of single-use plastics by 2025.
The financial services industry is going through dramatic changes as a consequence of changing customer behavior, increasing expectations, channel proliferation, disruption, innovative use and adoption of new technologies and the digitization of business and society in general. Cost reductions, increasing top-line revenue and mitigating risk remain the key drivers, also in retail banking.
The digital transformations taking place in finance are driven by many common challenges and opportunities across the industry, whether it concerns insurance, retail banking or other financial services. At the same time, in each of those financial industry segments there are several specific challenges, depending on the digital transformation maturity level, the region, the overall ecosystem, the customer context, the business scope and the degree in which digitization has taken place and processes have been connected.
Deputy Chief Executive Officer cum Chief Information Officer at Vietnam International Bank (VIB), Mr. Tran Nhat Minh talks to Vietnam Insider about the journey and challenges in digital banking transformation evolutions in his bank.
Could you share some facts and figures about VIB’s digital transformation process over recent years? How did these changes help improve your business performance last year?
Digital technologies are rapidly disrupting business models across industries and Banking is not an exception. VIB, as a player in the industry is also actively engaged in transforming our business to digital.
VIB started our digital journey 7 years ago, when we stepped up from the market’s standards by adopting SOA Architecture in preparation for a digital transformation. 2 years later, in 2014, with the emergence of mobile technologies and rapidly changing consumer behavior, VIB once again set the pace by introducing our MyVIB mobile banking application to the market, going beyond normal banking apps by providing multiple value-added services. It is still considered one of the most innovative mobile banking apps on the market, as well as one that offers the best user experience.
By the year of 2015, VIB pioneered digital procedures to open a bank account online. This process not only allows customers to apply for a current account online within minutes, but also reduces time and resources of VIB’s operational human force.
2016 & 2017 we focused on open collaboration with Fintech Entrepreneurs to launch a series of innovative services that go beyond banking services, such as booking hotels and flights, or transferring money on social media using MyVIB social keyboard.
2018 was the year that we reinforced VIB’s website and transformed it into a sales platform, with completely new and accessible user interface and sale process. As a result, the number of visitors has doubled since launch, and the number of new users increased by nearly 120%.
This year, we will continue to reinforce our digital platforms by embracing digital technologies such as Robotics Automation, Machine learning, and Chatbot.
What kinds of technology has VIB been investing in to upgrade your banking system and services in recent years? How is the progress of implementing digital core banking system to accommodate Internet banking payment services and digital payments at VIB at the moment?
VIB has been actively seeking the right technologies that we can embrace overtime without causing too much change in our legacy systems. Instead of pouring out a lot of money in new technologies, we focus on optimizing our legacy systems and at the same time investing in suitable digital technologies (such as Enterprise service bus, Robotics Automation, Machine learning, Open API, and Cyber security) and ensuring that these new technologies are consistent with our enterprise architecture.
We upgrade legacy systems such as Core Banking, Core card, e-banking and payment gateway periodically to ensure service consistency and 24/7 availability.
We focus on expanding our collaboration with Fintech to offer creative and flexible digital solutions to consumers.
Besides working with world class IT companies such as Oracle, IBM, Microsoft, Cisco in normal traditional IT banking model, we are also making our own way to explore open-source technologies. Our goal is to harness technologies that are cheaper, easier to implement and which would increase our in-house capabilities.
How has VIB’s operational model and business strategies changed in order to adapt to the digital transformation trend as well as to capture opportunities from the local banking sector?
The world is at the early stages of Industry 4.0, and so is Vietnam. We have massive opportunities regarding digital transformation. 66% of our population is Internet users. 72% of those who use smart phone and banking customers are responsive to the trend: 44% are using digital services, the e-wallet market is booming with more than 10 million users from 20 active e-wallet companies in the market. Digital banking is critical to this trend towards a cashless society.
At VIB, we focus on offering fast, simple and secured digital services across digital channels. MyVIB is recognized as a powerful app that integrates multiple functions beyond normal banking app. Our sales website is becoming a primary channel for external customers to open accounts and cards. We are developing internal digital solutions to serve internal customers, aiming to provide smart and interactive tools that save time and money for both the bank and the customers.
Digital interaction between banks and customers has now been considered among the most difficult challenges facing banks in Vietnam. What do you think about this statement? What barriers has VIB been facing?
Digital technologies are changing consumer behavior and new competitors (such as Fintech) are on the rise. It will be increasingly difficult for banks, specifically traditional banks to interact with customer successfully without effective communication on digital channels. At VIB, we believe the solutions are customer centric design thinking and a digital marketing approach.
In the process of developing digital banking, we have been facing some barriers regarding customer behavior. For example, when we first introduced our mobile banking app and internet banking to consumers, they hesitated to use these services due to lack of trust, fear of insecurity and unclear benefits. We had to make sure to communicate frequently with customers through digital marketing and communication. By adopting the customer centric design thinking, we made sure that the services were fast and easy to use, so as to foster a sense of security and encourage consumers to continue using the apps. We measured performance, analyze and improve daily every single detail in interactions between VIB and our customers. Until this day, this process is constantly repeated to ensure constant optimal experience.
What are your plans and strategies to accelerate technology investment for the bank’s digitalization process in the future?
VIB is using 6-7% of our total revenue to invest in technologies. As mentioned above, we will not only be investing in new digital technologies but also investing to improving the legacy systems. We can’t just get rid of the legacy systems in the short term, but we also can’t delay the digitalization process, hence we plan to get the best of both worlds by proactively developing and upgrading both old and new technologies and ensuring compatibility. The goal is to serve our traditional business while making our way to digital business.
Digital banking is one of VIB’s top strategic directions. Digital transformation is not just a trend, it is a must for our survival over the next 10 years.
The new partnership will provide SMEs access to financing in Vietnam, where SMEs today account for 96-98% of all enterprises
The partnership will leverage IVB and Cathay’s data analytics modelling and tools, Indovina Bank’s FCL credit line, in addition to Finaxar’s innovative SME credit solutions
Finaxar’s SME credit solutions is the first-of-its-kind, completely online and automated credit financing solution, providing access of funds up to 500 million VND (22,000 USD)
Finaxar VN, Indovina Bank and Cathay Financial Holdings on Thursday, July 18, 2019 announced its partnership to improve access to financing for small and medium enterprises (SMEs) in Vietnam.
The partnership will provide working capital to SMEs that are growing fast in the region with easier, more streamlined access to credit online through Indovina Bank’s FCL credit line product powered by FinaxarTM. Today, SMEs comprise 96-98% of enterprises operating in Vietnam, but up to 60% are still unable to access credit to fuel their growth.
“In our experience, small businesses in Vietnam face random demand fluctuations which require them to possess some form of capital flexibility. This is where the Finaxar Credit Line (FCL) comes in. FCL is part of Finaxar’s reinvention of traditional business financing to accommodate and support the growth of SMEs in the 21st century,” said Finaxar co-founder Vihang Patel.
FCL is a first-in-region, completely online, automated credit financing solution specifically tailored for Vietnam’s SMEs.
Business owners can now access funds of up to 500 Million VND (22,000 USD) through FCL easily online. In contrast to traditional financing, FCL uses a simple model, charging a single percentage fee upfront on the loan amount, with no hidden or processing charges. In-principle credit approval can be granted within 30 minutes of an online application.
“Our mission is to bring a full suite of innovative products into the market to reinvent how business finance for small businesses are done and to address the pain point of access to financing for SMEs,” said Finaxar’s co-founder Dr. Sian W. Tan.
Specifically designed to work around such difficulties in accessing credit, FCL does not require business owners to provide any collateral and gives business owners flexibility in their repayment schedules. FCL allows owners to grow their businesses in various ways, including procuring inventory and boosting general business expansion.
“We care about Vietnam’s people and how SMEs are being financed for business growth,” said Marcus Lopez, Executive Vice President and Head of Digital, Data and Technology at Cathay Financial Holdings, investor to both IVB and Finaxar.
Powered by IVB/Cathay’s sophisticated data analytics modelling and tools, plus innovative financing solutions backed by IT infrastructure and API platforms, we are pleased to partner with Finaxar offering tailor made products and services to unbanked local clients and customers. With 214 offshore office worldwide as well as intensive footprints in Asia-Pacific markets, we are open to all possibilities to collaborate creating even more exciting business benefits to this region,” said Mr. Lopez.
