Vietnam Telecoms Market Report 2018

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The “Vietnam
Telecoms Market Report 2018” report has been added to ResearchAndMarkets.com’s
offering.

This country report and accompanying data annex provide a comprehensive overview of Vietnam’s telecoms market, including KPIs and data on subscribers, penetration, revenue and ARPU.

The report analyses the strategies of major players in the country’s fixed and mobile telecoms markets, and includes market share data and operators’ infrastructure status.

Data coverage

The country report data annexes provide a range of key metrics for each country’s telecoms market. Figures are supplied for each year since 2006. The data annex was last updated in May 2018. Metrics include the
following.

Fixed telecoms market

Connections

  • Total voice (narrowband and VoBB)
  • Narrowband
  • VoBB
  • Total broadband
  • Broadband split by access technology: DSL, cable modem, FTTH/B, BFWA
    and other
  • IPTV
  • Dial-up Internet
  • Household penetration (for voice and broadband)
  • Unbundled local loops

Revenue and ASPU

  • Service revenue
  • Service revenue as percentage of GDP
  • Service revenue per head of population per month
  • Retail revenue (defined as service revenue minus wholesale revenue)
  • Retail revenue as percentage of GDP
  • Retail revenue per head of population per month
  • Retail revenue split by type of service: voice (including split by
    narrowband and VoBB, and split by narrowband access and calls),
    broadband (including split by technology), dial-up Internet, business
    network services
  • Broadband retail revenue as a percentage of fixed retail revenue
  • Voice ARPU per month
  • Broadband ARPU per month

Traffic

  • Fixed-originated minutes
  • Outgoing MoU per active connection

Operator-level metrics/market share

  • Broadband subscribers by major broadband operator (and associated
    market shares and year-on-year changes)
  • DSL connections (incumbent and total, incumbent’s share)
  • Incumbent’s market share of service revenue

Total telecoms market (fixed and mobile)

  • Voice connections
  • Broadband connections
  • Service revenue
  • Service revenue as percentage of GDP
  • Service revenue per head of population per month
  • Retail revenue (defined as service revenue minus wholesale revenue)
  • Retail revenue as percentage of GDP
  • Retail revenue per head of population per month
  • Retail revenue split by voice and data
  • Originated minutes

Mobile Telecoms Market

Connections

  • Total (handset plus mobile broadband, excluding M2M)
  • Split by prepaid and contract, and prepaid share
  • Population penetration for total, prepaid and contract
  • 3G, and 3G percentage of total
  • Handset, and split by smartphone and basic
  • Handset population penetration
  • Broadband
  • Broadband population penetration
  • MVNO penetration

Revenue and ARPU

  • Service revenue
  • Service revenue as percentage of GDP
  • Service revenue per head of population per month
  • Service revenue split by prepaid and contract, and prepaid share
  • Service revenue split by voice and data, and data as percentage of
    service revenue
  • Retail revenue (defined as service revenue minus wholesale revenue)
  • Retail revenue as percentage of GDP
  • Retail revenue per head of population per month
  • Split by voice and data
  • ARPU per month (total, prepaid and contract)

Traffic

  • Mobile-originated minutes
  • Outgoing MoU per active connection

Operator-level metrics/market share

  • Connections (and associated market share)
  • Prepaid and contract connections
  • Proportion of prepaid accounts
  • ARPU per month (total, prepaid and contract)
  • Service revenue
  • Service data revenue (as a percentage of service revenue)

Total telecoms market (fixed and mobile)

  • Voice connections
  • Broadband connections
  • Service revenue
  • Service revenue as percentage of GDP
  • Service revenue per head of population per month
  • Retail revenue (defined as service revenue minus wholesale revenue)
  • Retail revenue as percentage of GDP
  • Retail revenue per head of population per month
  • Retail revenue split by voice and data
  • Originated minutes

Companies Mentioned

  • CMC Telecom
  • FPT Telecom
  • Mobifone
  • SCTV
  • VNPT-Vinaphone
  • Viettel

For more information about this report visit https://www.researchandmarkets.com/research/nhnc89/vietnam_telecoms?w=4

View source version on businesswire.com: https://www.businesswire.com/news/home/20180615005739/en/

Property booming in Saigon

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The HCM City housing market will continue to grow this year, especially the VNĐ1 billion (US$44,000) condo segment, the HCM City Real Estate Association (HoREA) has predicted.

Lê Hoàng Châu, its chairman, said the VNĐ1 billion segment would be the most liquid while the luxury segment will be restructured in line with actual demand. VNS reports.

Authorities would continue to cool down the land and condotel segments, it said.

In the second half of the year developers would continue to upgrade the city’s infrastructure, rebuilding old apartments, joining in resettlement programmes and developing smart urban areas, it said.

They would strengthen relations with foreign investors to raise more funds, it said.

In the first five months of this year the property market was slightly down compared to the same period last year, with only 29 projects launched, almost 10 per cent fewer.

Nearly 9,200 housing units were put in the market, 8,690 of them apartments and the rest houses, down by more than 44 per cent.

The slowdown had spread to the apartment market, with the luxury segment declining by 26 per cent, the mid-price segment by 32 per cent and the low-end segment by 70 per cent.

Land prices shot up, especially in District 9, though of late they have levelled off.

Fifteen M&A deals were done.

Property attracted the third highest amount of FDI.

According to HoREA, developers face challenges in getting loans since banks are tightening credit on instructions from the State Bank of Việt Nam.

The association wants the Government to control two main factors that affect the market: the imbalance between demand and supply in the luxury apartment and condotel segments and the disinformation spread by brokers to manipulate land prices.

Asian Women’s U-19 Volleyball Championship: Iran Beaten by Vietnam

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Iran was defeated against Vietnam at the 2018 Asian Women’s U-19 Volleyball Championship quarter-final on Saturday.

The Iranian team suffered a narrow 3-2 (19–25, 25–14, 25–18, 18–25, 15–13) defeat to the host.

The Iranian women started the campaign with a 3-1 win over Hong Kong but suffered a narrow 3-2 defeat to Australia in the preliminary round.

Iran qualified for the next stage as the winner, beating Macau 3-0 and then defeated India 3-0 to qualify for the competition’s quarter-final.

Iran lost to Japan 3-0 and failed to qualify for semi-final.

The 2018 Asian Women’s U-19 Volleyball Championship is a biennial international volleyball tournament organized by the Asian Volleyball Confederation (AVC) with Volleyball Federation of Vietnam (VFV) for the women’s under-19 national teams of Asia.

The tournament is being held in Bac Ninh Province, Vietnam, on June 10-17.

AAG cable breakdown affects internet traffic in Vietnam

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The Asia America Gateway (AAG) undersea cable suffered from a breakdown, cutting off all international connections through the AAG-SH1 branch of the line, an internet service provider in Vietnam confirmed on June 16 afternoon.

Earlier, a number of internet users in Vietnam complained about lost of access to Gmail and Facebook. VNS reported.

The cause of the breakdown has not been clarified, but it is believed to be a power leakage or cable breakage.

This is the third breakdown of the cable line this year. The previous two ruptures were on January 6 and May 22. Repair of the May 22 breakdown was just completed on June 2.

The AAG has a total length of 20,000 km, connecting Southeast Asia with the United States. It was put into operation in November 2009. The route’s connecting point with Vietnam is part of the S1 section, extending 314 kilometres and coming on land in Ba Ria-Vung Tau province.

Foreign car makers expand production in Vietnam due to non tariff barriers

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Vietnam’s policy on tightening car import regulations under Decree 116 may be the main reason behind foreign car makers’ decision to expand production in Vietnam.

Most recently, Toyota Vietnam proposed the Vinh Phuc People’s Committee to rent 9.1ha of land in Phuc Yen city to expand its automobile manufacturing plant, raising its annual capacity from the current 50,000 to 90,000 units by 2023. Accordingly, the total capital for this expansion is about $40 million. Vietnam Invesment Reviews reports.

Toyota’s move is supposed to be the result of Decree No.116/2017/ND-CP, which introduced many strict conditions and regulations about importing cars, which came into effect early this year. Not only Toyota, but Ford and Hyundai are also planning to expand production scale in Vietnam due to the decree.

According to the Vietnamese government, Decree 116 aims to boost the development of the country’s automobile manufacturing industry and enhance the standards of imported cars across a variety of metrics. In addition, the high standards stipulated in the Decree also contribute to improving the localisation rates of car makers doing business in the country.

However, the decree also made Toyota and other car manufacturers temporarily halt production in Indonesia due to difficulties in exporting cars to Vietnam. According to the Indonesian Association of Automotive Manufacturers, the new regulation temporarily halted the production of 9,337 vehicles which were meant to be exported to Vietnam.

Newswire thejakartapost.com quoted the Indonesian Trade Ministry’s director general for International Trade Oke Nurwan saying that the new Vietnamese regulation could significantly affect Indonesian exports of completely build-up (CBU) vehicles to the country.

With the new regulation, in addition to business licences, car exporters and manufacturers must have Vehicle Type Aproval (VTA) certification issued by authorities in the exporting countries.

Furthermore, government bodies will randomly inspect one or two cars of each imported batch. Accordingly, the levels of air emissions, quality, as well as engine security will be inspected.

On February 22, the general secretary of the Association of Indonesian Automotive Industries Kukuh Kumarasaid that Decree 116 has increased export expenses. The inspections could last for one or two months, during which the rest of the batch also need to stay at the ports and exporters have to pay storage charges.

Oke also added that Indonesia stood to lose US$85 million in vehicle exports to Vietnam under the decree in December 2017-March 2018.

Maybe the decree’s strict conditions have made it more desirable for car manufacturers like Toyota and Hyundai to expand their manufacturing facilities in Vietnam to save export costs.

Previously, Korean car manufacturer Hyundai in March made a deal with the northern province of Ninh Binh to construct its second Vietnamese automotive plant in the province. While expanding business scale in Vietnam, Hyundai expects to increase its localisation ratio to 40 per cent to export vehicles to Southeast Asia.

Singaporean Oxley unit invests in Vietnam companies

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Oxley subsidiary, Oxley MK Holdings Vietnam Company, has subscribed for 49 per cent of the charter capital in MK Thao Dien Company for 19.6 billion Vietnamese dong (S$1.14 million).

MK Development Management Company holds the remaining 51 per cent. Straitstimed reoports

MK Thao Dien was incorporated in Vietnam in August last year, and has been dormant since. The plan is for the company to “undertake property development projects in Ho Chi Minh City”, Oxley said. Its investment will be funded by internal resources.

In a separate filing to the Singapore Exchange on Thursday (June 14), Oxley said that its joint venture company in Vietnam, Oxley MK Hanoi Joint Stock Company, has seen its capital increase from 20 billion dong to 320 billion dong, with additional shares issued to shareholders of Oxley MK Hanoi in proportion to their shareholdings. Oxley MK Holdings Vietnam has a stake of 20 per cent in the joint venture.

In addition, Oxley MK Holdings Vietnam has acquired 2.88 million shares from one of the joint venture partners, Tran, for some 65.96 billion dong. Therefore, its stake in Oxley MK Hanoi has since risen from 20 per cent to 29 per cent.

Adopting automation key for Vietnam manufacturers

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Vietnam-based garment-makers should embrace technology-driven automation to address the new realities of accelerating wage growth and the global shift towards placing smaller orders.

Vietnam has been among the leaders in Asia in terms of wage growth, with real wages expected to grow 4.7% this year, according to a recent annual survey conducted by human resources company Korn Ferry.

At the same time, smaller quantity orders, targeted on multiple seasons and hence many deliveries are generating demand for ever-shrinking lead times and low costs.

“The economy in Vietnam is growing fast, putting pressure on conventionally low wage industries like apparel manufacturing to increase the wages as well,” said Saurav Ujjain, business head (south-east Asia) at India-based technology company ThreadSol.

Speaking to just-style, he added: “The trend to smaller orders is putting additional strain on the manufacturer bottom-lines, and the only way out of this is to shift towards technology-driven automation to lessen the workload while ensuring repetitive and quality output.”

ThreadSol claims its software solutions can help manufacturers boost their profit margins by up to 50%, with Hong Kong-based Luen Thai’s Ocean Sky, northern Vietnam’s Duc Hanh Garment JSC, Fashion Garments (near Ho Chi Minh City), and Saitex (from the same region), already on the list of Vietnam-based clients.

The company’s IntelloCut software, for example, generates an optimised cutplan from millions of possible combinations by grouping similar widths, shades and shrinkages, to boost quality and profitability.

According to Ujjain, technology and automation adoption in Vietnamese-owned and managed clothing factories lag behind their foreign-owned and managed counterparts – which he attributes to a comparatively longer hierarchy and conservative approach to large-scale changes.

This delay could prevent Vietnamese manufacturers from making the most of the upcoming Comprehensive & Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Vietnam is member, and which follows Hanoi’s striking of a free trade deal with the European Union.

For instance, while the CPTPP will open the Australian market more for Vietnamese garments through reduced tariffs, growth in orders could be hindered as Australian consumers’ preference for online orders clashes with Vietnam’s inability to swiftly produce small quantity orders amid technological constraints.

Australian brands and retailers often score many sales online, so they usually order in small quantities to avoid a large inventory, according to Tr?n Van Quy?n, a representative of Woolmark Company of Australia in Vietnam, as quoted by newspaper Vietnam News.

By Jens Kastner

Two killed at railway crossing in north-central Vietnam

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Couple on a motorbike tried to beat a train at an unmanned crossing in Thanh Hoa Province.

Police inspect section of a railway in Thanh Hoa Province where two people were killed when trying to cut through an approaching train. Photo by VnExpress/Lam Son

According to a report by VNExpress, Two people were killed instantly in the north-central province of Thanh Hoa on Friday when they tried to speed past an SE11 train at an unmanned crossing.

SE11 is code for the train that plies the north-south route.

The motorbike carrying Tran Van Que, 45, and an unidentified female passenger, was completely destroyed after being dragged for about 20 meters.

The accident, which happened around 11 a.m. today, is being investigated, local officials said.

The SE11 train was delayed for 30 minutes by the accident.

Concerns about Vietnam’s railway safety have been raised following consecutive crashes recently, including four crashes in as many days in May.

A report by the Vietnam Railway Company showed that there are 5,793 level crossing points across the country. Out of those, only 641 have stationed guards, 366 have automatic alarms and 507 have warning signs.

 

by Le Hoang

Wife strips husband’s mistress naked in public and burns her with CHILLI POWDER

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A FURIOUS wife dragged her husband’s mistress from her beauty salon by her hair, stripped her naked and burnt her with corrosive chilli powder after accusing her of having an affair with her husband.

Because of the strength of the extra hot chilli powder, the woman was left with facial marks and multiple bruising following the attack on Tuesday evening at around 10pm.

The 30-year-old was dragged onto a packed street in Thanh Hoa, Vietnam, by her hair.

The wife of the unnamed man then pulled off the woman’s clothes and pulled her trousers down before covering her in fish sauce.

David Pam, who witnessed the altercation on a busy high street in the eastern city, said the woman then smothered the naked beauty therapist in hot chilli powder.

The practice is said to be a growing copycat trend in the country, which has emerged when wives confront their husband’s mistresses.

Mr Pam photographed the brutal scene and local police are now interviewing the injured woman and are investigating the attack.

Eyewitness Mr Pam said: ”There was lots of cursing at the women. The wife said she had been married for ten years and that the beauty spa owner had destroyed her marriage.

”There were a group of women helping her. She pulled her hair and slapped her. She put chilli powder over her body in the middle of the High Street.

”The victim showed no resistance, she just was on the ground and received it. I think she was taken to hospital because of burns caused by the powder.”

Thanh Hoa Police Chief Lam Son Ward told local media that officers received a call at 10pm about a girl who was jealous and had attacked another woman with fish sauce and chilli.

Mr Ward said of the attack: ”When officers arrived, all parties involved had left the scene.

“The cause of the case is now being verified. There are signs of a crime being committed by humiliating another person.”

The alleged attacker, if found guilty, could be charged with humiliating another person, intentionally inflicting injury and causing public disorder.

Chris Smalling learns how to speak Vietnamese

And Thanh Hoa police head Nguyen Chi Phuong confirmed an investigation had been launched, saying: ”After the investigation is completed, the public security bodies will handle the case strictly according to the law with regards to the violence displayed, the hooliganism and the lack of culture.”

The attack is not the first time a jealous lover has taken matters into their own hands in Vietnam.

In September 2016, a love cheat was recovering in hospital after his mistress’s husband allegedly chopped off his penis and threw it away.

The victim’s relatives found his missing penis two hours later after begging his attacker to reveal what he did with it.

It was then rushed to a hospital where surgeons reattached it to the unnamed 32-year-old in a 12-hour-long operation.

Vietnamese GrabCar driver filmed calling passenger ‘stupid’ for not greeting him

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The GrabCar driver during the fierce argument with his passenger in the video footage posted to Facebook

A Vietnamese GrabCar driver was caught on camera using offensive language against a female passenger, saying she failed to greet him when getting into his vehicle.

The footage, filmed by the passenger herself, has attracted thousands of views since being uploaded to Facebook earlier this week.

During the two-minute video clip, the GrabCar driver insisted that the traveler should have greeted him first.

“I don’t know what you look like because I can’t see your picture with the app, so you have to say hi when you get in my car,” the cabbie reasoned.

“It’s the same as when you walk into someone’s house and greet the owner. Are you a thief or something?” he continued.

The passenger seized the opportunity to retort, calling the driver’s comparison ridiculous and asserting that she had no responsibility to say hello.

“You are the service provider. If anyone has to greet first, it is you,” she stressed.

The argument escalated when the driver called the passenger “stupid” and “impolite,” hoping that hurling insults at his customer would teach her some manners.

Despite the tension, the GrabCar driver refused to heed the passenger’s requests to stop the vehicle and let her out.

“If you are not stopping the car, then shut up,” the passenger said at the end of the video clip.

Comments on the video showed a general consensus that the driver’s attitude was completely off base.

Tuoi Tre (Youth) newspaper contacted Grab Vietnam for comment on Thursday but had not received a response as of the time of this article’s publication.

Since taking the helm of the ride-hailing industry after Uber’s exit from Vietnam in April, Grab has received a series of complaints from its customers about exorbitant fares, poor quality, and unreasonable cancelations by drivers.

By Duy Khang, Tuoi Tre News

A code of conduct proposed for Chinese travelers

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Some experts believe that a specific code of conduct for Chinese travelers can help better manage problems that have existed in recent years. 

Chinese tourists, for example, were found wearing T-shirts containing the ‘nine-dash line’ that violates Vietnam’s sovereignty when they entered Vietnam in mid-May.

Many people have once again called on to restrict the number of Chinese travelers to Vietnam because of risks to public order. Da Nang tour guides lodged an appeal with agencies, complaining that Chinese provide tour guides operate illegally in Vietnam and distort Vietnam’s history.

The ‘zero-dong tours’, the map with illicit ‘9-dash line’ and the bad behavior of many Chinese in public have all raised concern.

Some extremists have even called on travel firms to refuse Chinese travelers because the revenue they generate is not high enough to cover damages they cause.

Meanwhile, many people disagree, saying that China is the biggest market for Vietnam.

A report of the Vietnam National Administration of Tourism (VNAT) showed that 1.7 million out of 5.5 million foreign travelers to Vietnam in the first four months were Chinese, an increase of 40 percent over the same period last year. 

A report of the Vietnam National Administration of Tourism (VNAT) showed that 1.7 million out of 5.5 million foreign travelers to Vietnam in the first four months were Chinese, an increase of 40 percent over the same period last year.

In 2017, about 4 million Chinese travelers came to Vietnam, an increase of 50 percent over 2016.

Lam Duy Anh Cuong, chair of the Khanh Hoa provincial Tourism Association, also said Chinese travelers are important clients.

However, he admitted that the sharp increase in the number of Chinese travelers who come to Vietnam under cheap tours have caused damage to the tourism environment.

In such circumstances, a policy which maintains a reasonable growth rate would ensure the quality of services and avoid overloading infrastructure.

Nguyen Duc Quynh, deputy CEO of Furama Resort Da Nang, said to attract suitable travelers, Vietnam needs to better understand tourists and create favorable conditions for them to spend money in Vietnam.

He said that agencies should develop shopping centers meeting certain standards and sell products and services Chinese travelers want.

An expert has suggested releasing a code of conduct specifically designed for Chinese travelers.

The expert said in September 2017 Chinese travelers to Singapore were given handbooks of tips when touring Singapore. The handbook contained recommendations about what Chinese travelers should not do in the country.

Vietnam plans to attract 15 million foreign travelers in 2018 and obtain total revenue of VND620 trillion.

Source: Vietnamnet

Thousands of foreign specialists work in Binh Duong, live in HCM City

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Attracting $31 billion worth of FDI (foreign direct investment), Binh Duong Province is the workplace for thousands of foreign specialists. However, their homes are not in Binh Duong, but in HCM City.

Every day, thousands of specialists working in the industrial zones (Izs) of Thu Dau Mot City in Binh Duong province spend two hours travelling from HCMC to Binh Duong and back.

Expats, especially high-ranking executives at foreign invested enterprises located in Binh Duong, want to buy or lease high-quality houses convenient to their office.

But they have to find the houses in HCM City. Some mid-end apartment projects have been developed in Binh Duong province. However, as they are not located in the central area, they cannot attract buyers. The apartments are not high quality and lack amenities.

Every day, thousands of specialists working in the industrial zones (Izs) of Thu Dau Mot City in Binh Duong province spend two hours travelling from HCMC to Binh Duong and back.

The real estate market has developed strongly in the northern part of Binh Duong, including the districts of Tan Uyen and Ben Cat, where there are many IZs. However, there is only land and there are no apartments in the area.

Thus, expats would rather live in HCMC, especially in the districts of Thu Duc, 2, 9 and 7 to enjoy modern utilities and developed services.

Binh Duong leads the country in competitiveness in attracting FDI. By the end of March 2018, it had attracted $31 billion worth of FDI.

Ranked second in terms of FDI attraction, just to HCM City, Binh Duong has attracted thousands of specialists and workers.

According to CBRE Vietnam, about 8,500 foreign workers out of total 15,000 expats working for IZs had registered their temporary residence by March 2018. This means high demand for the real estate market in Binh Duong.

It is estimated that Binh Duong every year needs 30,000-40,000 more workers to develop local trade, services, education and entertainment services.

Soon after Thu Dau Mot City was upgraded into a first-class urban area, many real estate developers accelerated the implementation of projects.

These include apartment projects, namely The Habitat Binh Duong, ECO Xuan, Sora Gardens, Roxana Plaza, Citadines Central, First Home Premium and Metro Tower, Marina Tower and Samsora. There are also house and villa projects such as Golden Center City, Mega and Midori Park.

Duong Thuy Dung from CBRE Vietnam said many real estate firms have realized great potential in Binh Duong and are moving ahead with projects. These not only include domestic but also foreign investors from Asia.

By Mai Chi, Vietnamnet

​Saigon’s new Mien Dong Bus Station plagued by sluggish construction

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The inauguration of Ho Chi Minh City’s new Mien Dong (Eastern) Bus Station will be delayed until at least the end of this year, moving the opening day more than ten months behind schedule due to sluggish construction progress.

The groundbreaking ceremony for the Mien Dong Bus Station was held in April 2017 for what was expected to be an approximately eight month project.

Site clearance delays pushed the planned completion back to Vietnam’s Lunar New Year, held in mid-February of this year.

Now, nearly four months after the second deadline, the project’s completion still seems far from sight.

The new facility is aimed at eradicating regular congestion at the current bus station in Binh Thanh District as well as providing better services for residents who wish to travel to provinces east of Ho Chi Minh City and localities in the central and northern regions of Vietnam.

A model of the new Mien Dong Bus Station

With a total capital of VND4 trillion (US$176.4 million), the completed station will cover an area of 16 hectares, of which 12.3 hectares will be in outlying District 9, Ho Chi Minh City and the rest in neighboring Binh Duong Province.

From just outside the building site, it seems workers are busy constructing concrete pillars at the main hall of the station while the rest of site seems basically empty.

Several houses that were meant to be demolished to make way for the new bus station have yet to be taken down.

Streets surrounding the construction site are filled with dust, polluting the air in the neighborhood and creating a serious risk of traffic accidents when trucks pass by.

According to leaders of the Saigon Transportation Mechanical Corporation (SAMCO), the project’s developers, the site clearance process is still unfinished as there is one household who has refused to move.

A map detailing the location of the new Mien Dong Bus Station

SAMCO is seeking approval from competent authorities to let the family buy a 140 square meter piece of land as compensation for their relocation.

The firm also attributed the slow construction to difficulties in transferring land plots needed for the construction site.

In addition, the E3 and D11 roads included in the project overlap with an existing street, causing further challenges as the developer must ensure that citizens are still able to use the routes during the ongoing construction.

Given the current pace, SAMCO expects that the new bus station will be put into operation on December 31.

By Duy Khang

Source: Tuoi Tre News

Groceries adopt digital technology as they feel the heat from online competition

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Grocery owners have begun feeling the pressure of ‘Jack Ma’s retail empire’ which has entered Vietnam through Lazada. They are upgrading their stores in an aim to be more professional in the digital era.

Nguyen Thi Cuc, owner of a grocery in Hoang Mai district in Hanoi, said she spent VND5 million to buy a computer and barcode reader last week.

“Supermarkets and convenience stores have mushroomed. If I did not upgrade my store, I would lose customers,” she explained.

Cuc is satisfied about her decision. She doesn’t have to spend time to calculate bills, but she knows exactly how much money she has and how big the stocks are. However, she admitted that it took her a lot of time to get used to a computer and she sometimes has to ask for her granddaughter’s help.

The locations in advantageous positions and hospitable services are the biggest advantages of grocery stores.

However, the advantages alone will not be enough to attract customers. Many groceries now are trying to sell goods through many channels. They advertise on Facebook, Zalo or sell products via phones.
The big changes in the global retail industry can be seen in Vietnam. Buyers use phones, computers and game machines to access the internet, and buy goods anywhere they want, on websites, Facebook, Zalo, or e-commerce floors, or go directly to shops.

However, omni channels, a growing tendency of modern retail, pose challenges for retailers. They need to find solutions that optimize profit and manage all sale channels.

What is the fate of groceries?

Contrary to predictions of many years ago, the traditional retail channel continues to grow. Its market share has decreased slightly by several percent, but the revenue still increases. According to the General Statistics Office (GSO), in 2016, the retail revenue increased by 10.2 percent, higher than the 9.8 percent growth rate in 2015, to $118 billion.

Meanwhile, a report of the Trade Research Institute predicted that Vietnam’s retail industry would grow by 11.9 percent per annum in 2016-2020 to have the value of $179 billion in 2020.

According to Nielsen, Vietnam has 1.4 million grocery stores and 9,000 traditional markets, which have revenue of $10 billion a year and hold 75 percent of market share.

According to Tran Trong Tuyen, CEO of DKT, said offline and online sales management, multi-channel inventory management and order management on mobile platforms are the problems retailers have to solve.

By Kim Chi

Source: Viet Nam Net

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