Police have launched legal proceedings against the director of Nhật Cường Company, a major mobile phone dealer in Hà Nội, for alleged smuggling.
Bùi Quang Huy and eight others were detained on suspicion of smuggling and violating regulations of accounting, causing serious consequences.
On May 9, police officers raided multiple Nhật Cường Mobile stores.
Thousands of mobile phones, iPads, and electronic and telecommunications equipment and components were confiscated. All of the outlets were forced to suspend operation.
Huy’s house in Tây Hồ District’s Thụy Khuê Street was raided.
Police suspect Huy and others organised a transnational smuggling ring and established two systems of financial and accounting documents, hiding significant amounts of revenue.
Police are expanding the investigation to clarify the crimes of those involved and verify the loss of State property.
Nhật Cường Mobile is the brand of Nhật Cường Trading and Technical Services Company Limited with nine retail shops in Hà Nội since 2001.
It has a guarantee centre in the northern region and an enterprise resource planning centre in the south.
The company has also entered the IT sector and won many large bidding packages. In 2017, it was honoured as one of Việt Nam’s 50 biggest IT firms.
An album featuring young girls sporting fake pregnancies in an anti-child abuse campaign has come in for heavy criticism.
The photo album is part of a project against sexual abuse of children initiated by two MCs (masters of ceremonies), Cong To and Minh Tra, in collaboration with photographer Da Mieu and Hanoi-based Shine Academy, which offers courses on soft skills.
Released last week, the photo album, titled “Nhung dua tre mang bau” (Children with pregnancy) puts the girls in situations where they have been abused by men.
In the photos, the girls, between eight and 12 years of age, wear fake pregnant bellies and their faces reflect anxiety, fear and panic so as to portray the suffering of real victims.
The photos carry captions like: “What is inside [my belly] mom?”; “Mom, the devils are real”; “He did not let me tell anyone and as you [the parents] are always busy, I did not dare to tell you anything”; and “He said it’s gonna be okay but it really hurts.”
Apart from these quotes, the album carries data on the child abuse situation in Vietnam. It says that a child is harassed or abused every eight hours, and 93 percent of perpetrators are in the family circle.
It calls on everyone to be aware and raise their voices to protect children.
While the photographs touched the hearts of some people, many disagreed with the approach adopted.
The faces of the children in the photos are not obscured and many people are worried that they can be used for nefarious purposes, defeating the original intention, and eventually, affecting the young models themselves.
“Why are the faces of the men hidden and that of the children shown? The team [behind the project] does not seem to care about people and only wants shock in order to get attention,” reader Hoang Huong commented.
“The reverse impact of this project should be carefully considered. The idea is good but the way it is expressed is not humane. Maybe the team should have sought advice from psychologists specializing in youth and social issues before implementing the project,” commented another reader, Nguyen Bao Tri.
The defense
MC Cong To, the project’s creative director, said the team did think about the option of hiding the faces of the girls at first but then they worried that it would make viewers misunderstand that the models are real victims who’d already been abused.
“We did make it public that all girls in those photos are just models for the project. They have been offered two courses in child sexual abuse prevention and understand clearly the value of what they did.
“We have the agreement from their families and all of us were on the same page on how the project should be implemented,” he said.
The photographer, Da Mieu, said the project aimed to attack sexual abusers of children, and choosing models of an older age would have been misleading.
The team also said this photo album is just a start for their project to protect children from sexual abuse. For the next step, they are working on a similar album for boys and plan to release it soon.
Dang Hoa Nam, head of the Department of Child Affairs under the Ministry of Labor, Invalids and Social Affairs, said he has seen all the photos and also followed public reaction.
He said that while he agreed with the motivation behind a project to depict current events through art, there was some validity to the criticism.
Although the team had got permission from the parents before shooting photos of the girls, they should not have let the faces of the kids appear so clearly, because that could affect their lives later, Nam said.
“On the other hand, the message that the photo album wants to deliver is not yet clear. Pregnancy is not everything that a child will have to carry after being sexually harassed. What it does to their emotional and mental health is something they will never forget,” he said.
Child sexual abuse is not rare in Vietnam, as reported by the public, yet official data on sexual harassment is not regularly published in the country.
A report released last month by the Ministry of Public Security said out of 1,600 reported cases of child abuse last year, 80 percent involved sexual assault and in most cases, the perpetrators were someone close to the children or having authority over them, like neighbors, relatives or teachers.
The State Bank of Vietnam will auction the scrap metal from coins which are no longer in circulation.
Over 601 tonnes of coins, after being turned into scrap, will be auctioned at a reserve price of VND48bn (USD2m), or VND80,000 per kilo. The price is exclusive of VAT, loading or transportation costs.
The Technical Centre for Quality Measurement Standards 1 carried out the chemical analysis and testing on the scrap.
The metal coins that worth from VND200 to VND5,000 went into circulation in late 2013 to be used on buses, phone booths and vending machines. However, the coins are of low-quality metal and became rusty quickly. Moreover, they were rarely used because of their low value and lack of everyday practicability.
In April 2011, the State Bank of Vietnam stopped the production of metal coins.
Digitization could contribute 1.1 percent GDP per year to Vietnam until 2045, experts say.
“Vietnam has a bright future in digital economy development,” Dr. Lucy Cameron, senior research consultant at Australian federal scientific research agency CSIRO, said at a conference on the issue Wednesday.
Cameron said that while Vietnam has been investing in production, manufacturing and assimilation of technology to boost traditional growth, breakthrough solutions needed sharper focus.
Vienam should foster growth in advanced technology and promote innovation to extract due value from digitization, she said.
In the best case scenario, if Vietnam fully implements digitization, GDP could rise by 1.1 percent, Cameron said. Vietnam’s GDP currently stands at $224 billion.
“Having a young workforce as well as being positioned in the high-growth Asia-Pacific region are Vietnam’s advantages for digitizing its economy. If Vietnam can manage change it well, it will be able to achieve its ambitions, attract technology and boost innovation,” she said.
Ousmane Dione, country director of the World Bank in Vietnam, stressed that innovation and productivity-based growth was an urgent requirement for Vietnam.
The country has experienced remarkable growth in the last few years, but is still behind some countries in the Asia-Pacific region, he said, adding that Vietnam needs to conduct reforms in the fields of science, innovation and technology, in order to improve performance both in the private and public sectors.
Cameron recommended that Vietnam builds a unified platform to connect technological systems to take advantage of key strengths, focus on specialized areas, and provide increasing support for innovation.
Vietnam needs to participate in many regional forums, promote the growth of venture capital funds, and boost partnerships in technology and transfer of know-how, he said.
Two weeks ago, Data 61, an Australian data science research and engineering firm, projected that Vietnam could add $162 billion to its GDP in 20 years’ time by turning its economy digital.
However, Data 61 also warned that 38 percent of jobs could be lost to digitization.
Google and Singaporean sovereign fund Temasek have estimated that Vietnam’s digital economy was worth $9 billion in 2018, and expected to reach $30 billion by 2025.
The digital economy has been booming in the last few years. It grew by over 25 percent last year and the country can sustain this rate for the next two or three years, according to the Vietnam E-Commerce Association.
Two sign strategic cooperation agreement to provide bank’s priority individual customers with outstanding investment products.
The Vietnam Prosperity Joint Stock Commercial Bank (VPBank) and VinaCapital Fund Management (VCFM), a member of the VinaCapital Group, one of Vietnam’s leading investment and asset management firms, recently signed a strategic partnership agreement in which the two will work closely to offer VPBank’s individual customers a range of new and diverse investment products.
VCFM will introduce to priority customers of VPBank a new form of investment through open-ended fund shares, which are favored by domestic and international investors alike due to their high levels of safety and liquidity.
VCFM currently offers three open-ended funds: VEOF (VinaWealth Equity Opportunity Fund), which invests in listed stocks, VFF (VinaWealth Enhanced Fixed Income Fund), which invests in bonds, and VIBF (VinaCapital Insights Balanced Fund), which invests in a mix of stocks and bonds. Each of these funds offers a different level of risk and potential return to meet differing investor needs.
VPBank and VCFM have also agreed to jointly develop specialized seminars, sales days, and meetings to introduce VCFM’s financial products to the bank’s customers. VCFM’s financial experts will analyze and advise on investment planning strategies for each group of VPBank’s customers, helping to ensure they have sufficient information to make wise investment decisions, as well as establish an ongoing relationship with them to keep them updated on market trends – whether positive or negative – to help minimize risks and maximize returns.
“We are very pleased to work with VPBank to offer their customers expanded personal investment opportunities and advice,” said Ms. Nguyen Thi Thai Thuan, General Director of VCFM. “Investment products can play an important role in a diversified personal finance plan. We continually strive to create new products that both meet the needs of consumers and capitalize on positive market trends, and look forward to offering these products to VPBank’s customers.”
Mr. Phung Duy Khuong, Deputy General Director of VPBank, said that individual Vietnamese investors are gradually discovering the benefits of investing in open-ended funds. “VinaCapital has been at the forefront of offering new investments to the retail market, and we are delighted to work with them to offer our customers a larger range of investment solutions as we continue to aim to become the best retail bank in Vietnam,” he said.
The bank last month also signed a cooperative agreement with local technology startup Haravan, called “Empower 50,000 Vietnamese enterprises”, with the participation of over 100 e-commerce and retail businesses, in order to improve digital transformation capacity and accompany the development of local enterprises, especially small and medium-sized enterprises (SMEs).
South Korea banks on Vietnam alliance after China chill
Northeast and Southeast Asian partners prioritize economic ties over frictions
South Korea and Vietnam may not be natural allies, yet their bond is quickly becoming one of the region’s deepest.
These are two nations divided by historical bloodshed, political ideology and global status. One is an advanced but rapidly aging Northeast Asian capitalist democracy long past a “miraculous” economic rise. The other is a youthful Southeast Asian one-party socialist state, still in the early stages of its own economic miracle.
Despite, or in some ways because of these differences, their trade has exploded 34-fold since 2000. Tourism is booming in both directions. South Korea’s biggest manufacturers, starting with Samsung, have poured billions into Vietnamese plants as an alternative to China. Retailers and banks are targeting Vietnam’s up-and-coming consumers.
Even the coach of the Vietnamese national soccer team is a South Korean transplant who has become an adopted hero.
The countries are marching toward a shared future. But as they draw closer, the potential for friction also grows — over Vietnam’s bureaucratic red tape, or South Korean companies’ treatment of workers, or the unresolved legacy of the Vietnam War.
Ask 30-year-old Ho Chi Minh City resident Cao Tran Phuong Chi, and she will tell you that South Korea no longer seems like a foreign country to many Vietnamese. “South Korea has been a common word in Vietnamese daily life for years,” said Chi, a retail worker who devours South Korean movies, TV dramas and K-pop music, along with food and cosmetics.
“It’s well-known for its culture and entertainment, fashion and investment,” she added.
To upgrade her career, Chi enrolled in a five-week program backed by South Korean retail conglomerate Lotte Group and the state-run Korea International Cooperation Agency at the Industrial University of Ho Chi Minh City. “The training course offers good stories, experience and programs which are being taught in South Korea,” she said.
Cao Tran Phuong Chi, center, hopes to improve her career prospects through this course backed by Lotte Group and the Korea International Cooperation Agency at the Industrial University of Ho Chi Minh City. (Photo courtesy of Lotte-KOICA-IUH Service Training Center)
Ties between the countries have blossomed to the extent that Vietnam was South Korea’s No. 3 export destination for the second straight year in 2018, after only China and the U.S., according to data from the Korea International Trade Association. It is expected to top the U.S. in 2020.
South Korea in 2014 surpassed Japan as the top source of accumulated foreign direct investment in Vietnam — a position it has not relinquished since.
“Many ASEAN countries are under the influence of Japan, but Vietnam is an exception,” said Lee Tae-joo, president of the Re-shaping Development Institute, a Seoul think tank. “It has a special relationship with South Korea.”
Much of this is thanks to South Korean manufacturers like Samsung Electronics and LG Electronics. Samsung has invested about $9.5 billion in the country since 2007, producing over 150 million smartphones at its factories in the provinces of Bac Ninh and Thai Nguyen, north of Hanoi.
LG makes appliances in Hai Phong, a two-hour drive east of the capital. The company announced in late April that it would transfer its smartphone production lines from Pyeongtaek, outside of Seoul, to Hai Phong later this year, increasing its annual Vietnamese smartphone production to 11 million units.
Phones have been Vietnam’s top export since 2013. More importantly, South Korean investment has spawned a manufacturing ecosystem that promises to fuel the Vietnamese economy for years to come.
Samsung has invested about $9.5 billion in Vietnam since 2007. (Photo by Kim Jaewon)
“There were around 7,000 Korean firms operating in Vietnam, providing jobs for more than 700,000 workers and contributing around 30% to Vietnam’s export value,” Vu Ba Phu, director of the Vietnam Trade Promotion Agency, said at an investment promotion conference in Hanoi in late April. South Korean companies, he stressed, have “also helped promote the development of Vietnam’s supporting industry.”
Samsung did business with 35 “tier 1” local suppliers in 2018, up from just four in 2014. This year it is sourcing from 42, and the number is expected to rise to 50 in 2020. The suppliers, in turn, are branching out into other industries like automobiles, armed with know-how gleaned from working with Samsung.
For South Korean companies, which rushed to cash in on China’s huge market and inexpensive labor in the 2000s, Vietnam offers even lower costs and ostensibly less political risk.
The average Vietnamese manufacturing worker earned $3,812 last year, about a third of China’s average of $10,520, according to the Hyundai Research Institute. And since Beijing clamped down on Korean companies over Seoul’s deployment of a U.S. missile defense system, more are heading for Vietnam instead.
Few companies were hit harder by the defense dispute than Lotte, which agreed in 2016 to provide land for the anti-missile system — part of a golf course in Seongju. The Chinese government later appeared to punish the company, over alleged fire safety violations and other issues, prompting it to sell most of the 99 Lotte Mart discount stores in China.
Now, there are 14 Lotte Marts in Vietnam, one of which is inside the 65-story Lotte Hanoi Center, which also houses a department store and hotel. The building has become a landmark in the capital, drawing thousands of people a day.
When it comes to consumer market size, there is no comparison. China is home to around 1.3 billion people, well over 10 times the population of Vietnam. Nevertheless, Lotte is investing heavily in Ho Chi Minh City and Hanoi. It had poured in 1.8 trillion won ($1.5 billion) by 2016, and intends to spend an additional 1.2 trillion won by 2024.
Lotte is applying lessons learned in China.
“We advanced to China in the 2000s, relatively late [compared with] our rivals. That raised costs, leaving us behind in the competition,” said Sim Young-woo, general director at Lotte Properties Hanoi, which developed and manages Lotte Hanoi Center. “So, we decided to reach the Vietnamese market early.”
South Korean financial institutions jumped in early, too.
Bourse operator Korea Exchange helped the Ho Chi Minh Stock Exchange get up and running two decades ago. Now it is developing IT systems for the Ho Chi Minh City and Hanoi markets.
South Korea’s Shinhan Bank is the biggest foreign lender in Vietnam with $3.7 billion in assets, though it is still small compared with Saigon Commercial Joint Stock Bank, Vietnam’s largest private bank, which had $18.2 billion as of the first quarter of 2019.
Shinhan showed its commitment in 2017 when it acquired Australia and New Zealand Banking Group’s local retail unit. “Western banks are leaving this country because they focus on corporate and investment banking, but we are betting on growth in retail banking,” said Lee Sang-hoon, a Shinhan director. “We grew explosively last year, creating enormous synergy effects.”
Lee added, “Vietnam is a new growth engine for us because we cannot expect much profitability in our home country.” The net interest margin of banks in Vietnam, a key indicator of profitability, was about twice that of lenders in South Korea in 2017 — 2.9% versus 1.63%, according to Vietnamese research firm Biinform and Seoul’s Financial Supervisory Service.
As the face of its brand, Shinhan chose one of the most recognizable South Koreans in Vietnam: soccer coach Park Hang-seo.
Last year, Park led Vietnam to the title in the AFF Suzuki Cup — the Association of Southeast Asian Nations regional championship. He also took his side to the semifinals of the Asian Games, falling to the eventual champions: South Korea.
Afterward, South Korean President Moon Jae-in remarked, “I realized that the two countries have become closer friends through soccer by watching Vietnamese people wave flags of both Vietnam and South Korea.” Moon is looking to boost ties with Vietnam and the broader ASEAN bloc under his “New Southern Policy,” which seeks more well-rounded diplomatic ties beyond the U.S., China, Japan and Russia.
The Vietnam-South Korea relationship is not a one-way street. Hanoi has loosened regulations on foreign business ownership, opening the door for more Korean companies. A research affiliate of Vingroup — one of Vietnam’s largest conglomerates — opened an R&D center in the South Korean city of Daegu in March.
Shin Sun-ho, principal at the Korean International School in Ho Chi Minh City, described the relationship as an “alliance connected by blood.”
Shin said about 30% of the school’s 1,900 pupils — from kindergarten through high school — are of mixed South Korean and Vietnamese heritage.
Keeping up with enrollment demand is a struggle. “South Koreans’ rush to Vietnam is so huge,” he said. “We will open a new building next year, but it won’t be enough.”
The principal has also felt the effects of South Korea Inc.’s exodus from China to Vietnam. “That’s why we have so many children from China.”
Shin said the school strives to raise “experts who are familiar with both Korean and Vietnamese culture and language. I hope they’ll become leaders later, playing key roles in connecting the two countries.”
The Korean International School in Ho Chi Minh City strives to raise “experts who are familiar with both Korean and Vietnamese culture and language.” (Photo by Kim Jaewon)
But even blood brothers have issues. Workers’ rights are one friction point.
“Korean managers often treat Vietnamese workers harshly, raising some labor issues here,” said a Vietnamese journalist who asked not to be named. “Sometimes they ask why employees go to the restroom so often.”
Shin said that “Korean companies should avoid exploiting” Vietnamese workers.
At the same time, South Korean companies wrestle with the socialist bureaucracy. “It takes so much time to get approval from the authorities,” said one Korean businessman on condition of anonymity. “They often demand money for making it swift.”
Overshadowing the ties is a troubling prospect for Vietnam: the possibility that North Korea could one day take its place as South Korea’s preferred production base, if sanctions are lifted. Samsung alone accounts for more than 20% of Vietnam’s exports — a level of dependence that worries Hanoi.
Some Vietnamese also find themselves burying grievances over South Korea’s involvement in the Vietnam War on the U.S. side. “We do not forget,” one Vietnamese journalist said. “We just ignore it for the future.”
Shin said South Korea should address the past.
“South Korean soldiers committed many sins including killing civilians during the Vietnam War, a tragedy of modern history,” he said. “Koreans should reflect and apologize for what they have done, which would pave the way for mutual interests in the future.”
MasterCard has just named the Vietnam International Bank (VIB) as one of its leading bank partner in e-commerce transactions and value of credit card spending in Vietnam.
“We highly appreciated the outstanding indicators in the issuance and spending of credit cards that VIB has achieved recently. VIB became one of the banks having the highest total value of credit card spending in 2018 with the growth rate reached over 300 per cent compared to 2017, doubling the market’s average rate. We were also impressed that VIB had led e-commerce transactions in 2018 with a growth rate of over 200 per cent in comparison with 2017.” said Winnie Wong, MasterCard’s Country Manager for Vietnam.
This is the outcome of VIB’s transformation efforts in satisfying customers’ demands, providing unique credit cards with preeminent utilities and attractive incentives. VIB’s amount of e-commerce spending in 2018 also affirms its modern technology platform, helping customers make transactions safely, conveniently and quickly.
VIB representative (mid) Mastercard Country Manager for Vietnam (right)
Unique credit cards with preeminent utilities
VIB has launched 6 new credit cards since December 2018 and has been well received by the market. For example, Happy Drive – the only credit card in the market offering up to 500 litres of gasoline per year and cashback 30 percent on car maintenance fee; VIB Financial Free – the 1st credit card with free annual fee and withdrawal up to 100% card limit. Or other credit cards with outstanding benefits such as VIB Cash Back, VIB Rewards Unlimited, VIB Travel Elite with the best refund, reward points, miles and currency exchange transaction fee. VIB has recently launched Zero Interest Rate credit card, becoming the first and the only credit card waiving interest rate for all card expenses during five years.
Attractive and continuous promotions
In addition, VIB’s cardholders will be offered 0 per cent of installment at hundreds of VIB’s partners all over the country, discounted up to 50 percent for food, travel, hotel, health care expenses. Especially, VIB has exclusive privileges for the cardholders such as: 15 per cent discount on Wednesday at Agoda.com; VND300,000 discount on Sunday at Shopee.vn; 10 percent cash back for all transactions at Booking.com; 0 percent installment at British Council, Dale Carnegie Việt Nam; 0 per cent installment when buying Prudential or Liberty Insurance.
Modern and safe technology platform
VIB’s credit cards are applied technologies to quickly satisfy the demands of using credit cards, reduce paper and protect the environment. VIB is also the first bank to launch Virtual Card feature, enabling customers to make online transactions immediately after issuing credit cards on the system without receiving physical ones; and Green PIN feature, allowing customers to receive and change PIN immediately via MyVIB mobile banking application without receiving PIN on paper. In the early of May, VIB has implemented contactless payment feature for its credit cards, helping customers to complete transactions with a slight tap to payment terminals instead of swiping the cards over magnetic stripe or chip reader.
With an income from VND7 million per month, customers can immediately own VIB credit cards by accessing to www.vib.com.vn or VIB fanpage, calling hotline 18008192 or going to any VIB’s branches all over the country. If using MyVIB, customers click “Apply for VIB products”, choose “Credit card”. Then VIB’s staffs will contact within 5 minutes to consult before the credit cards will be issued and delivered to customers.
Biên Hòa, 25km from Ho Chi Minh City in Dong Nai province, is one of the key industrial centers of Vietnam, a multitude of industrial development zones, factories and warehouses dominating the local economy. Yet the nearby province of Bình Duong has become the epicenter of investment in the country, attracting 3,444 new foreign businesses from 64 nations, with a registered capital of $331bn, employing 450,000 of a provincial population of 2.1 million. Little wonder Bình Duong’s economic growth rate was at 14.5% in 2011-15, and per capita income more than $5,100, 2.4 times the national average; or that Vietnam’s exports/GDP rate was 200%, second worldwide only to Singapore.
Vietnam’s reform process, known as “Doi Moi”, or renovation, started in 1986, first in the agriculture sector. Previously all tools of production — land, capital, working assets — were collectivized and owned by the state and peasants were paid in rice and other produce which “the state bought at a predatory price”, says the former deputy prime minister, Vy Khwan.
This was changed to allow farmers to keep their surplus at a market price. The flow of goods across internal borders was encouraged, and other goods to be marketed on the basis of supply and demand. Foreign trade was spurred by an end to the barter system between socialist states.
The results were staggering. With more secure property rights and market-based pricing (rice had been trading at one-tenth of the market price in 1988), households leapt at the opportunity to sell surpluses. The value of agricultural exports surged from $500-million in 1986 to $40-billion in 2018, an average annual growth rate of more than 15%. Today, Vietnam’s coffee producers have the highest yields in the world.
A foreign investment law followed in 1987, with FDI growing steadily from $320-million in 1990 to a total stock of $130-billion in 2018. At the same time, GDP per capita has leapt from just $570 in 1987 to more than $2,500 by 2018. Between 1986 and 2018, Vietnam’s economy grew at an annual average rate of 6.4%, notably higher than the average for South-East Asia and all lower-middle-income countries at 4.2% and 4.8% respectively.
The Vietnamese Singapore Industrial Park (VSIP) is, as the name suggests, a joint venture with a Singapore consortium headed by that government’s Temasek fund, and is a stand-out facility in Bình Duong. Started in 1996, it now encompasses several parks in the area and farther afield, with $11-billion invested by 800 tenants, providing 200,000 jobs. With more than 6,000 container trucks leaving the VSIP facilities daily, Route One towards Ho Chi Minh City is a slow-moving mass of rattling, ducking and diving trailers and trucks.
Above and below: From its start in 1996, the eight VSIP industrial parks now encompass 800 tenants and 200,000 jobs. Photos: Greg Mills
It was not always this way. In the 1960s and 1970s, Route One was a focus of National Liberation Front attacks against American convoys. The area around Biên Hòa suffered especially badly during and after the war, with the settlement of large numbers of refugees worsening an already severe humanitarian situation.
Biên Hòa was also the site of the main US airbase. By the early 1960s, it had become a joint facility for the US Air Force and the Republic of Vietnam Air Force, one of the last bases to fall to the advancing North Vietnamese troops before the collapse of the Saigon government on 30 April 1975.
The costs of conflict were massive. Just off Route One is a South Vietnamese army cemetery, where some 18,000 people are buried, 10,000 in unmarked graves, part of some 250,000 South Vietnamese military deaths. Once neglected, more attention is being focused on the gravesite as the wounds of the war heal, the change in its name from Bình An Military Cemetery to the People’s Cemetery reflecting a change in spirit.
Time heals, eventually. Bình An Military Cemetery, the final resting place of 18,000 of the 250,000 South Vietnamese soldiers who lost their lives in the war. Photo: Greg Mills
Similarly, the US government has committed more than $200-million to the decontamination of the land around the Biên Hòa airbase from the notorious Agent Orange. For a decade from 1961, US forces sprayed 80 million litres of the defoliant over 78,000 square kilometres of southern Vietnam in attempting to create a demilitarised zone and reduce the cover for their Vietnamese foe.
But the country has put the conflict behind it, despite the enormous loss of life, as many as 3.4 million, including two million civilians. There are now more than 320 industrial parks across the country. The first, Linh Trung, was created in 1993 within Ho Chi Minh City as a joint venture between the Vietnamese government and a Chinese state-owned company, one of 17 IDZs now in the city.
There are today 133 factories in the various phases of Linh Trung, with 75,000 employees. Annual exports total $2.9-billion, with $1.2-billion invested.
They take it seriously. Binh Duong’s industrial park one-stop shop. Photo: Greg Mills
So why did they come to Vietnam?
“In 1993, this was a very poor place, more like a village than the city you see today,” says Linh Trung president Yang Kai Yong. Originally from Guangzhou, he admits that the main advantage of being in Vietnam is in the comparative costs of labour.
Labour costs in the major cities (Hanoi, Da Nang and HCMC) average $200 a month, and some $180 in Bình Dương, against $500 in China in comparable industries.
But it’s not all about the cost of labour.
“Vietnam made a decision to open up quite early on. Their policies have learned from the experience of other countries. It is also a stable society,” he observes, “since the first thing that an investor considers is security.”
Export industries pay no VAT and corporate income tax is at 20% (compared to 33% in China), and there is a 10% incentive for an initial 12 years. Electricity rates are 50% lower than China, though logistics efficiencies are about 20% less.
Most importantly, these factors together meant that investors “made money, which is why we stayed, and why we reinvested. Vietnam has been good for us, and its trade with China good for Vietnam.”
Given that other countries also offer low wages and incentives, something more was required. Hence the stress, still today, on making it easy to invest, with one-stop shops and a welcoming attitude the norm. And the parks did not wait for investors to knock on their doors. In 2018 alone, VSIP staged 30 seminars and promotions for potential investors around the world. They have a waiting list of nearly 70 investors wanting space in their parks in Bình Duong.
While many African countries are hung up on concerns about local procurement and value addition in such parks, often forestalling these initiatives before they even take off, the Vietnamese approach has been different. They saw the principal value in growth terms, both of employment and in the economy. For example, the average income to labour at VSIP has increased six-fold over the past 20 years. The industrial parks now employ more than three million Vietnamese, from just 86,000 in the late 1990s.
It’s a labour revolution, but not the one imagined by the country’s revolutionaries back in 1945.
There will be challenges, of course, as Vietnam’s labour costs inexorably rise and machines become cheaper and more efficient. Investment in manufacturing is notoriously disloyal. This can be offset by increasing local content (and thus adding more value domestically) or by improving productivity.
Yet even today, these parks are far from the caricature of cut and trim, sweatshop garment industries. To the contrary, most of the businesses are relatively hi-tech. In Linh Trung, for example, less than a third of the 133 factories are in garments or shoes. Misumi, the Japanese engineering firm, for instance, arrived 20 years ago and now employs 3,000 CNC (Computer Numerical Control) machine operators across three factories.
44 years ago there were tanks rumbling down this street to crash through the gates of the Presidential Palace. Now its tourists, bikes, buses and cars. Vietnam received 15.5 million foreign visitors in 2018. Photo: Greg Mills
And neither are these businesses a story of the big, bad Western multinational. The vast majority, some 90%, is Asian. This explains the government’s concentration, too, on securing free trade agreements with ASEAN, Japan, Korea and China along with the United States and European Union. Vietnam, government officials proudly recount, joined the World Trade Organisation in 2007. They cannot get enough of globalization in the form of capital, trade, and technology.
Despite the bitter history, Vietnam realizes it needs foreigners. They not only bring money, but technology, skills and markets. This can be seen in the gulf of efficiency between foreign and local businesses. Today foreigners provide 20% of total capital, but account for half of GDP and 75% of exports.
More gains can immediately be made through privatization of the about 700 SOEs which remain under state control. Some 11,000 have been “corporatized”, either through amalgamation or privatization, since Doi Moi began in 1986. The Vietnamese also realize that they need to increase the efficiency of domestic businesses, and that likely goes hand in hand with a more pluralistic political environment.
The IDZs have been a triumph in Vietnam because the government has been responsive to the needs of investors and Vietnamese workers alike. The workers, too, have reciprocated with enthusiastic alacrity. There are no magic ingredients to this success, being founded less on innovation than blood, sweat and policy. As one investor put it:
“The economy is the economy. You invest because of the conditions, not because of how you might like them to be.”
The pertinence of Vietnam’s reforms to others is in demonstrating that a development trajectory is by no means the inevitable result of forces outside national control. To the contrary, they are very much within the power of political leadership. They simply have to possess the courage to make the necessary changes and in so doing, in Vietnam’s case, alter the fortunes of generations.
By Greg Mills and Emily van Der Merwe
This article first appeared on Daily Maverick.
By Daniel Moss,
a Bloomberg Opinion columnist covering Asian economies.
This Trade War ‘Winner’ Looks an Awful Lot Like China
Vietnam shares many of the mainland’s shortcomings. How long before Trump notices?
An Asian Communist state with a government-directed industrial policy churns out cheap goods for consumption in America. The country has a heavily controlled exchange rate, brandishes its low labor costs, enjoys a trade surplus and is wary of opening sensitive industries to foreigners. Add what might be politely described as some history of antipathy toward the U.S.
You might be forgiven for thinking that place is China, whose trade dispute with the U.S. is deepening. But no, it’s Vietnam.
Lured by the low cost of manufacturing, companies from Nike Inc. to Ikea have been redirecting parts of their supply chain from China to the Southeast Asian nation in recent years. Foreign direct investment in Vietnam has climbed for six consecutive years; the economy is humming, with a growth rate of about 7 percent; and the government is relaxing at least some barriers to foreign ownership. These are all reasons the country is often cited as one of the few winners from the trade war.
It also begs the question why, despite sharing many of China’s characteristics, Vietnam has avoided the ire of President Donald Trump and his army of trade protectionists bent on clipping Beijing’s wings. If a much-less-threatening Germany — with its still-high costs of labor, democratic government and shared currency — can end up on the administration’s blacklist, surely Vietnam shouldn’t be spared.
The U.S. trade deficit with Vietnam keeps widening
This is the context in which to view the reporting of my Bloomberg News colleagues Saleha Mohsin and Jenny Leonard that the U.S. will expand the number of countries it scrutinizes for currency manipulation. Vietnam could be named a manipulator outright, according to people familiar with the situation. While the label isn’t consequential in itself, it’s worth considering as a warning of future policy trajectory — particularly for the growing number of businesses and investors that have considered parking their money and resources there lately.
What’s probably saving Vietnam from Trump’s onslaught, for the moment, is its size. The country’s population of roughly 100 million people puts it on par with the Philippines, and its GDP is a mere 1% of the U.S.’s. Bottom line: It’s no China, geographically, demographically, commercially or militarily. Nor is it currently perceived as a threat to American strategic interests. In the past few years, Hanoi’s relations with Washington have been fairly amicable.
When I visited Hanoi in September, the optimism was almost unbridled. The air was thick with anecdotes about U.S., European, Japanese, South Korean and even Chinese companies scouting for sites in Vietnam as a way to escape the vagaries of economic rivalry between Washington and Beijing. Yet doubts are starting to creep in about whether Vietnam’s congested ports and roads can handle the influx of traffic; whether its workers have the requisite skills; and whether land costs are rising too briskly.
Is Vietnam’s scale too small to draw comparisons with China? Quite possibly. But its industrial strategy and development model bear a resemblance to Beijing’s decades ago.
The U.S. once saw a burgeoning Asian economy as the investment opportunity of a lifetime. Fleets of investment bankers and business leaders showed up telling anyone who would listen that the country was the next big thing and an ideal place to set up shop. Superlatives abounded. Troubled political relations were a thing of the past — and Western-style capitalism would make ties even smoother. It didn’t work out that way in China.
The bullish-on-Vietnam scenario might be the real thing. Yet it’s also worth asking what can go awry with the benefit of hindsight.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Daniel Moss at dmoss@bloomberg.net
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Rachel Rosenthal at rrosenthal21@bloomberg.net
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Shopee’s mobile application achieved the highest Monthly Active Users number in Vietnam for the 1st quarter of 2019, according to an all-new ranking by iPrice Group and App Annie Intelligence.
Mobile shopping is quickly becoming an important factor of e-commerce business in Vietnam.
According to Google and Temasek’s 2018 report on Southeast Asian e-Conomy, more than 90% of Southeast Asians are now connecting to the internet primarily through their smartphones, making this region one of the most mobile-first globally. iPrice Group also noted that during last year’s Singles’ Day, the rate of consumers accessing their e-commerce platform by mobile has risen rapidly from 62.5% in 2017 to a whopping 80.4% in 2018.
Facing such an important trend in customer behaviours, e-commerce merchants in the country are now scrambling to improve and promote their mobile apps.
To provide a better understanding on the state of this competition, iPrice Group has cooperated with App Annie Intelligence to come up with a ranking for mobile shopping apps with highest Monthly Active Users in Vietnam.
Taking first place in this ranking for Q1/2019 is Shopee, a reward for their clear mobile-first approach.
Top 10 mobile shopping apps with highest Monthly Active Users in Vietnam in Q1/2019, source: iPrice
Shopee has been investing a lot on campaigns to attract consumers to their mobile app specifically. Most noteworthy is their notorious Shopee Baby Shark video. Another one which happened exclusively in Vietnam is their “Shopping festival 4.0”, a musical event featuring some of the country’s biggest pop stars.
When it comes to the app itself, Shopee is also not afraid to innovate. An assessment report by marketing research agency Econsultancy in 2018 has this to say about the Shopee mobile app: “Shopee has focused on mobile from the beginning and built its user interface around it. This made users’ mobile shopping experiences faster and more intuitive – users can buy or sell their items in less than 30 seconds – allowing Shopee to capture a large group of mobile users in Southeast Asia and Taiwan.”
Ranked at number two is Shopee’s biggest regional competitor Lazada. This is perhaps a more surprising result as according to iPrice Group’s previous Map of E-commerce Report, which ranks Vietnamese e-commerce companies based on average website traffic, Lazada’s monthly website traffic has been on a decline that puts them at the 3rd position in the country, behind Shopee and Tiki.
However, when it comes to mobile, Lazada is still fighting strong. It seems that the e-commerce giant is now shifting to put a bigger emphasis on mobile shopping.
Ranking in top 5 behind Shopee and Lazada are the apps from three local e-commerce platforms: Tiki, Sendo, and Adayroi. These three companies also have been achieving good results in term of average website traffic for recent quarter, making them worthy opponents for the two regional companies.
Behind this top 5 in the ranking are AliExpress, Amazon, eBay, and Alibaba, all of which are currently not officially operating in Vietnam.
iPrice Group is a meta-search website operating in seven countries across Southeast Asia namely in:
HongKong,Malaysia Singapore, Indonesia, Thailand, Philippines, and Vietnam. On a regular basis,
iPrice Group releases key insights on topics pertaining e-commerce, start-ups, and others.
On Monday, Trump twisted “There is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today. This has been proven recently when only 4 points were paid by the U.S., 21 points by China because China subsidizes product to such a large degree. Also, the Tariffs can be completely avoided if you buy from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That’s Zero Tariffs. Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That’s why China wants to make a deal so badly! There will be nobody left in China to do business with. Very bad for China, very good for USA! But China has taken so advantage of the U.S. for so many years, that they are way ahead (Our Presidents did not do the job). Therefore, China should not retaliate-will only get worse!”
…completely avoided if you buy from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That’s Zero Tariffs. Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That’s why China wants to make a deal so badly!…
Just few hours after Trump twisted, an account named dungdn replied that “Dear Mr. President. As a business law firm in Vietnam, we are ready to advise the tariffed companies for free of charge whenever they want to move to Vietnam. Just contact us at: info@gbs.com.vn or visit our website at: https://gbs.com.vn”
Dear Mr. President. As a business law firm in Vietnam, we are ready to advise the tariffed companies for free of charge whenever they want to move to Vietnam. Just contact us at: info@gbs.com.vn or visit our website at: https://gbs.com.vn
We did a research and have found that, the dungdn account owned by Duong Ngoc Dung, Managing Partner of Global Business Service Company (GBS), a legal and business services firm in Vietnam. According to the introduction on GBS’s website, Duong Ngoc Dung drives strategic partner development, industry alliances, and new business initiatives for GBS. He has successfully developed win-win relationships with leading Multi-National companies. In his recently twist, Duong said “Happy to be a contributor of “Doing Business“ by World Bank” with check-in location at the World Bank office.
In Vietnam, GBS positioned as one of the leading consulting firms, which helps clients achieve their goals by combining the highest global standards with local expertise. The firm focuses on company formation services, legal services, labor and employment and tax services.
We will keep you posted what Trump will reply on the twist.
Vietnam, with a population just shy of 100 million, is one of the largest countries in Asia and one of the most attractive markets for growing global brands.
Until recently, though, Vietnam was in the digital ‘dark ages’. According to World Bank figures, as recently as 10 years ago a mere 25% of the country was on the internet, less than a third of the percentage of UK citizens who online at the time (78%).
Since then, however, the country has progressed considerably and now around two-thirds (63%) are online, with projections that the country will reach Western levels by 2025.
Because of its size and digital sophistication, marketers in the country are becoming increasingly interested in marketing technology innovations, such as omnichannel. But just how far along are they? And what barriers to further progress are they facing?
To find out, Econsultancy, in association with Resulticks, recently surveyed marketers in Vietnam about their marketing technology priories and progress. The results, combined with responses from marketers across Southeast Asia, are available in our recent report, The Omnichannel Imperative, available to download.
Below are a few highlights from the report about the progress marketers in Vietnam have made with omnichannel marketing and how they compare with other marketers in the region.
1) Vietnamese marketers work for firms with sizable revenues
Even though it is classified as an ’emerging’ economy, Vietnamese companies have revenue figures which compare favorably to medium and large businesses in the West. In our survey, the smallest companies represented have revenues of around VND200 billion (US$8.6 million) annually and 1/3 take in more than VND500 billion (US$23 million) per year.
So, while market conditions are considerably different in Vietnam than in other, more developed markets, marketers in Vietnam have comparable budgets and marketing technology stacks to other marketers globally.
2) Marketers in Vietnam use all available data for their digital marketing
When asked about whether they agreed that their company is taking an integrated approach to customer engagement data and leveraging 1st, 2nd and 3rd party to do so, most marketers in Vietnam either ‘Strongly'(33%) or ‘Somewhat’ (37%) agreed with the statement.
While 18% in total disagreed (5% ‘Somewhat’, 13% ‘Strongly’), the ratio of respondents who agreed to disagreed for this question in Vietnam (3.8 to 1) was much greater than in neighbouring Indonesia (1.8 to 1).
3) In Vietnam, marketers are most enthusiastic about real-time marketing and omnichannel marketing
When asked to choose which three marketing concepts are a priority for them and their company in 2019, more marketers in Vietnam chose ‘Real-time marketing’ (57%) and ‘Omnichannel delivery and engagement’ (56%) than the other themes listed.
These percentages were largely in line with regional averages (65%, 52% respectively), but the overall enthusiasm for real-time marketing was considerably less than it was for marketers in Thailand (71%) and Indonesia (90%).
So, while the ability to connect with consumers across devices and in real time is important to marketers in Vietnam, it appears to be slightly less urgent than for other marketers in the region.
4) Vietnamese marketers are more likely to face data challenges than technology issues
When asked about the main challenges faced when carrying out omnichannel marketing across channels, marketers in Vietnam were more likely to respond that they had ‘too much data to manage’ (41%). This percentage is greater than region overall (38%) and from marketers in Indonesia (26%).
Vietnamese marketers, however, were less likely to say that they faced ‘technology or software limitations’ than the regional average (36%) or marketers in Indonesia (57%).
This result indicates that, in Vietnam, marketers may be more up-to-date with the current omnichannel technology but are struggling with the amount of data required to power their systems. Marketers elsewhere in the region, however, may be slightly ahead in deploying omnichannel and hitting the limits of their current technology stack.
5) Data issues in Vietnam may be related to the current vendors
To discover possible causes for their current woes, respondents were asked to rate their current solution against a variety of criteria. Survey-takers in Vietnam were most likely to rate their omnichannel systems as ‘poor’ at ‘data integration / unified view of data across all channels’, higher than the regional average (19%) and countries such as Singapore and Malaysia (15%, for both).
They were, however, much less likely to have issues with multi-touch attribution (10% indicating their solutions were ‘Poor’) than regional average (23%). Interestingly, multi-channel attribution is one of Indonesian marketers’ biggest problems, with 33% of respondents rating their vendors as ‘Poor’ in this area.
Additionally, the ‘ability of platform to scale’ was much less of an issue for marketers in Vietnam, with only 10% rating their current solution as ‘poor’, compared with 19% overall and an astounding 45% in Indonesia. Again, these disparate results from neighbouring countries may indicate that Vietnam is slightly behind Indonesia in rolling out omnichannel and, soon, will face similar attribution and scaling issues with omnichannel marketing.
As Vietnam’s aviation sector booms and passenger numbers rise at double-digit rates, local upstart Bamboo Airways is embracing what it hopes will be a novel way of standing out in a crowded market: Golf.
Competition among airlines in Vietnam has intensified since Bamboo launched in January. Malaysia’s AirAsia Group recently canceled its foray into the Vietnamese market, and increased traffic has placed strain on Vietnam’s aging infrastructure.
But Bamboo chief executive Trinh Van Quyet is confident he can fend off budget carrier VietJet and state-owned Vietnam Airlines by using the airline to connect his golf resorts to cities in Vietnam and northeast Asia.
“Even international airlines don’t have an ecosystem like Bamboo’s,” said Quyet, chairman of Bamboo’s parent company, FLC, which owns five golf resorts across the country.
The young airline’s slogan is “more than just a flight.”
“We have the rooms and combo packages for passengers. They can visit Vietnam, stay and play golf for free,” Quyet told Reuters in a recent interview from an FLC resort in Ha Long Bay.
Quyet is hoping that helps draw tourist crowds from South Korea, Japan and Taiwan, some of Bamboo’s first international destinations.
Bamboo has already sold out its domestic packages for this summer, a company spokeswoman said.
The package offers flights from the southern business hub of Ho Chi Minh City to an FLC resort in northern Vietnam for about $500, just more than half what it would cost to fly and golf separately, the spokeswoman added.
Popular attraction
Tourism to Vietnam from golf-obsessed South Korea has soared in recent years. The number of visitors from that country in January to April this year rose by 23.2 percent from a year earlier to 1.45 million, according to Vietnam’s Government Statistic Office.
“I hadn’t heard of Bamboo before; I learned about it on the way here,” said golfer Kim Yeong-jin, a South Korean businessman who had just putted for a bogey at the Ha Long Bay resort’s 11th hole.
Kim had traveled to Vietnam with Vietnam Airlines, but said he would be interested in one of Bamboo’s packages.
An official at Pacific Air Agency, a Seoul-based PR firm Bamboo hired to attract clients in South Korea, said they expected an increase in tourist demand.
“That will help Bamboo Airways expand its international routes,” said the official, who was not authorized to speak to the media. Pacific Air Agency plans to start promoting Bamboo this autumn, the official added.
Bamboo also hopes to attract pilots with golf.
In an online job advertisement, the airline said it would offer Boeing 787 pilots free golf at FLC resorts.
In early May, Vietnam’s deputy transport minister Nguyen Nhat told a government meeting that his ministry had received a complaint from Vietnam Airlines that the state-owned carrier was losing its pilots to Bamboo.
“That’s just how the market works, and the state won’t be able to interfere too deeply into this,” Nhat told the meeting, according to a report posted to a Vietnamese government website.
Vietnam Airlines, which is more than 80% government-owned, declined to comment.
Nearly one-third of Vietnam Airlines’ Boeing 787 pilots have resigned in the past few months, “pushing the national airlines into an emergency state of pilot shortage,” a report by state television said on May 9.
The report said salaries offered by new airlines are significantly higher than at Vietnam Airlines, making them “irresistible.”
Financing
Despite Vietnam’s rising GDP and fast-growing tourism industry, it could take some time for Bamboo to reach profitability, according to Shukor Yusof, head of aviation consultancy Endau Analytics.
“There’s every chance the carrier can be profitable if it can withstand losses in the first couple of years,” Yusof said.
Quyet, however, told Reuters he expects Bamboo – which has 20 domestic routes and plans to serve as many as 40 international cities – to be profitable as soon as next year.
FLC reported a net profit of 470 billion Vietnam dong ($20.13 million) last year, up 22 percent from 2017.
Bamboo leases all 10 of its aircraft but has signed deals with Boeing Co and Airbus SE to buy dozens more. The first of Bamboo’s Boeing 787s is scheduled to be delivered in the third quarter next year, and its first Airbus A321 in 2022.
Quyet told Reuters that capital from Bamboo, FLC and funds borrowed from Vietnamese and foreign banks would be used for the purchases.
“The payment for the planes is being made normally and in a timely manner,” he said.
The lawyer-turned-entrepreneur said he made his fortune investing in real estate with FLC, short for the Finance Land Corporation.
By 2016, he had become Vietnam’s second dollar billionaire and started to turn his attention to planes.
“When I was a student, I couldn’t even afford a bicycle,” Quyet said.
Last week, Vietnam has launched helicopter tours over iconic Ha Long Bay, flying Bell 505s. The tours will be flown by state-owned Vietnam Helicopter unit Northern Vietnam Helicopter (VNH North).
Ha Long Bay is a Unesco World Heritage Site and the most popular tourist attraction in Vietnam. It is expected to attract up to 16 million visitors by 2020. The new Van Don International Airport opened last year is less than an hour’s drive away.
VNH North provides utility and transport services across several industries such as oil and gas, tourism, air ambulance, search and rescue, and VIP transportation. The company plans to offer point-to-point transfers from Hanoi to Ha Long Bay, charter flights, wedding photography, and aerial surveys with its Bell 505s. VNH also is a Bell Customer Advantage Plan maintenance plan customer.
American helicopters Bell 505s
“We are proud to be part of this historic milestone for Vietnam,” said David Sale, Bell managing director, Asia-Pacific. “The Bell 505 is a great aircraft for tourism and is already flying tourists in Australia, Cambodia, Indonesia, and now Vietnam.”
On Monday, American Ambassador in Vietnam Kritenbrink posted on the Facebook page of the U.S Embassy in Hanoi that “Last Friday marked a milestone of the first commercial sale of American helicopters to Vietnam. Bell Helicopters, and their local partner, Vietnam Helicopter Corporation, commission their first two aircraft for tourism in Halong Bay. While there have been American helicopters in Vietnam in recent years, there have been no commercial sales until now. I’d like to congratulate Bell and their partners on this agreement. I think this is just one sign of the even greater economic cooperation yet to come.”
Cash transactions remain highly popular in Vietnam compared to other ASEAN countries as it has low banking penetration.
A new Standard Chartered report says Vietnam has the lowest bank account ratio in six ASEAN countries at 30.8 percent of the population aged 15 and up.
This ratio is 34.5 percent in Philippines, 48.9 percent in Indonesia and 81.6 in Thailand.
Cashless payment in ASEAN
Credit card ownership in Vietnam accounts for only 4.1 percent of the population, compared to 9.8 percent in Thailand.
The debit card ownership ratio, meanwhile, is 26.8 percent, lower than Indonesia at 30.9 percent and Malaysia at 73.8 percent.
Only 3.5 percent of the Vietnamese population have a mobile money account, while this ratio is 10.9 in Malaysia.
According to a report by Dat Nguyen on VNExpress, even though the country’s e-commerce industry has been growing at double-digit rate in recent years, 90.2 percent of online purchases are paid with cash, the report said. This ratio is highest, compared to only 47 percent in the Philippines where the percentage of population with bank accounts is only slightly higher than that of Vietnam.
Cash-on-delivery for internetpurchases
“Although there is a rise in alternative electronic means of payments in the region, cash still dominates. Apart from Singapore, the more traditional means of banking and payments remain more popular for the rest of ASEAN,” the report said.
The reasons of high cash usage, Standard Chartered said, is a lack of understanding of how digital payments methods work and how to start using them.
Others included concerns over the confidentiality of financial records, and the perception that cash is still the simplest and most straightforward payment method, the bank said.
But there is still a lot of potential for cashless payment to grow in Vietnam, the report said, noting that with over 70 million mobile users and 64 million internet users, e-wallet payments are set to gain more traction in the coming time.
There are over 20 e-wallet apps in Vietnam, while foreign operators such as Samsung Pay, Alipay, and Amazon have also entered the local market to tap the large potential, the report said.
The value of e-wallets transactions in 2017 exceeded VND53 trillion ($2.2 billion), an increase of 64 percent from the previous year, according to the State Bank of Vietnam.
The government is striving to increase cashless payment in the country. A resolution issued in January recommended that cashless transactions made viable for all urban household bill payments by the end of this year, prioritizing mobile payments and payment via card readers.
Ho Chi Minh City this week has instructed all schools, hospitals and many others to accept non-cash payments.
