Global e-commerce giants willing to take a hit to expand market share in Vietnam

Advertisements

Companies can see the long-term potential of the country’s rapidly expanding online shopping sector.

Vietnam’s blossoming e-commerce market has attracted global retailers such as Amazon, Alibaba and Shopee, but earning a profit in the country is another story.

American e-commerce giant Amazon is set to join Vietnam’s fast-growing market this month by opening up its platforms to local small and medium enterprises.

The company is expected to sign a deal with the Vietnam E-Commerce Association at a forum in Hanoi on March 14.

The deal was discussed at a meeting late last year between the association and Amazon, the world’s most valuable brand now worth $150 billion, according to Brand Finance Global Ranking.

Its development strategy will be revealed at the Vietnam Online Business Forum, which will be held first in Hanoi and then move to Ho Chi Minh City on March 16, and include discussions regarding online shopping trends, tax management and new technologies.

Other foreign online retailers have already infiltrated the Vietnamese market.

Earlier this year, China’s second biggest online e-commerce firm JD.com Inc announced plans to invest in Tiki, a Vietnam-based online retailer that it intends to help with fulfillment, logistics and more. JD.com co-led the financing with Vietnamese entertainment and social media firm VNG Corp.

The firm did not disclose the size of the deal, but said that JD.com will become one of Tiki’s largest shareholders alongside VNG.

In 2017, Alibaba officially entered Vietnam, and attracted tens of thousands of businesses after just six months. In June last year, the Chinese giant spent $1 billion raising its stake in Southeast Asian online retailer Lazada from 51 percent to 83 percent. Lazada is the biggest online retailer in Vietnam in terms of revenue, accounting for a whopping 30 percent of overall sales.

More than 90 percent of investments into Vietnam’s e-commerce platforms had come from foreign sources including China, South Korea and Thailand as of 2017, according to Nikkei Asian Review.

Trade expert Vu Vinh Phu attributed the inflow of large international e-commerce firms to the country’s growing online shopping trend, improved internet services and an increase in mobile-based payments.

Up to 59 percent of Vietnam’s nearly 95 million people have bank accounts, data from the central bank shows.

The potential for the sector is huge amid an expanding middle class and smartphone usage.

Across the country, the ratio of people using smartphones among mobile phone subscribers reached 84 percent in 2017, increasing from 78 percent the previous year, according to the Nielsen Vietnam Smartphone Insights Report 2017.

“The growth rate of Vietnam’s e-commerce market is estimated at about 35 percent, which is 2.5 times higher than Japan,” said industry expert Duc Tam at the recently-held Vietnam Online Business Forum 2017.

Online sales in Vietnam have expanded rapidly in recent years, currently accounting for 3.39 percent of the country’s retail market. The total retail market grew 10.9 percent last year to $173.27 billion.

The World Bank forecasts that Vietnam’s $200 billion economy is likely to grow to a trillion dollars by 2035. More than half of its population, compared with only 11 percent today, is expected to join the ranks of the global middle class with consumption of $15 a day or more.

According to one estimate, about 30 percent of the population will be buying goods and services over the internet in 2020, with each shopper spending an average of $350 per year.

“Foreign investors have seen the potential and they are pouring in money to take over the market,” said Phu.

Huge costs hinder profits

Despite the huge potential in Vietnam, e-commerce firms have faced development challenges, and many say they have suffered huge losses for years.

VNG Corp reported a loss of $122 billion (over $5.3 million) from its investment in e-commerce firm Tiki.vn in 2017.

Some local e-commerce companies like Lingo.vn, Deca.vn and Beyeu.com have been forced to shut down due to prolonged losses.

Huge logistics costs, which account for 60-70 percent of online retailers’ revenues, were the main cause of their losses, trade expert Phu explained. Large e-commerce firms also need massive warehouses covering thousands of square meters, and hundreds of staff to work in them.

Explaining why foreign investors are continuing to increase their presence in Vietnam’s e-commerce market, Phu said their current goal is to attract customers, stretching their influence on the market.

Firms often suffer losses in the first 5-7 years, said a trade expert. “It’s not time to make a profit yet. It’s time to increase market share.”

Agreeing with them, Nguyen Manh Dung, head of the Vietnam and Thailand Office under CyberAgent Ventures, said e-commerce requires long-term investment, and investors could start to earn profits after 5-10 years of operation.

Even Amazon, in some markets, has only started making a profit after 10 years of investment, local media quoted Dung as saying.

With fierce competition in Vietnam, it is likely to take e-commerce firms some time before they start reaping the rewards, he added.

Source: VnExpress

​Youth suicides shine light on cyberbullying in Vietnam

Advertisements

A wake-up call for those in Vietnam who are still using social media without any proper knowledge of the legal consequences of their actions.

A pair of shoes, a cellphone and a death note that reads “Sorry, Dad and Mom” were what L., an eleventh grader in Vietnam, left on the bank of a pond where she allegedly drowned herself days after somebody posted on social media a video of her kissing her boyfriend.

Her death sent a shockwave across her family, friends and the nation.

It drew public attention to an issue that has become increasingly haunting in Vietnam with the rise in popularity of social media – cyberbullying.

L was not the first victim of online harassment in the Southeast Asian country.

In June 2015, a female high school student in southern Vietnam’s Dong Nai Province killed herself with herbicide after footage of intimate moments between her and her boyfriend was posted on social media, drawing toxic comments attacking the girl’s decency.

Herbicide was also what a female high school graduate in Hanoi used to end her life in June 2013 when one of her portraits was edited into the body of a woman in revealing clothes and shared online.

In September 2016, a male high school student from the northern province of Yen Bai hanged himself out of shame from being beaten and forced to kneel by a gang of youths, which was captured in a clip that went viral on social media.

At a sitting of Vietnam’s lawmaking National Assembly last November, Minister of Information and Communications Truong Minh Tuan revealed a shocking figure: six cases of youth suicides in Vietnam over the last three years were directly related to social media bullying and harassment.

How many more deaths will it take for real change to happen?

 

An inviolable right

“From a legal perspective, the online sharing of photos or videos of a person without their consent is an infringement upon the person’s inviolability of personal privacy and secrecy, which is protected by the Constitution,” said lawyer Tran Ba Hoc from Ho Chi Minh City.

“Those who share such materials subject themselves to possible lawsuits,” he added.

This is a wake-up call for those in Vietnam who are still using social media without any proper knowledge of the legal consequences of their actions, Hoc said.

Dr. Dang Hoang Giang from the Center for Community Support Development Studies has much to say about mob psychology on social media, where he says everybody can be anonymous.

“The attraction of social media lies in the fact that it gives one a stage to perform,” Giang wrote in one of his best-selling books in Vietnam.

It is easy for a mob to demonize its target, he argues, as they always stand and judge from afar without putting themselves in the shoes of their victim to look at things from a different perspective.

Online anonymity strips one of the common sense to realize that the other party is hurt by their words, Giang explains.

“Personal privacy is not only one’s right to ‘be left alone,’ but also to forget” about what had pained them in the past, Giang wrote in his book.

Oftentimes, victims of cyberbullying are left in despair long after the angry mob has moved on to another target, he wrote, and their coping mechanism is to remain silent.

“Justice cannot be motivated by emotions of a crowd,” he stressed.

“An angry mob can create not justice or the rule of law, but dictatorship.”

 

 

Source: Tuoitrenews

Vietnamese beer giant makes great losses using government fund

Advertisements

The largest alcoholic beverage manufacturer in Vietnam has been held accountable for issues concerning its distribution of profits and generation of significant financial losses after using the government budget to invest in various domestic businesses.

The State Audit Office of Vietnam, the organ examining the use of public finance and property, has submitted a report to the Ministry of Industry and Trade, in which it mentioned the ineffectiveness in investment by Saigon Beer-Alcohol-Beverage Corporation, otherwise known as Sabeco, which is partially owned by the government.

The auditing administration said that Sabeco used the state capital in 2016 but is incurring a loss at the present.

Therefore, the firm has had to make a VND444.7 billion (US$19.5 million) worth of provision offset any potential losses.

This amount of expenditure accounts for 77.8 percent of the value of investments originally used.

Most of the corporation’s ventures are in banking and stocks, which are remotely related to its core field, beverage production.

The three largest investment projects of VND154.1 billion ($6.8 million), VND126.8 billion ($5.6 million) and VND39.3 billion ($1.7 million), respectively, went to Orient Commercial Bank, DongA Bank, and PVI Saigon – an insurance business. 20

Sabeco has been discovered making a loss investing over VND20.8 billion ($913,000) in Vinashin, a state-owned shipping building enterprise whose name was recently sullied with infamous illicit practices by its former leaders.

The auditing administration proposed conducting an investigation into causes for the investment losses and people to blame for the situation at Sabeco.

It also required the Ministry of Industry and Trade to point out who amongst the ministry’s personnel failed to ensure that the beer giant’s dividends – profits for shareholders – accumulated from 2016 backwards were distributed to the government, the major owner of nearly 90 percent of the company’s shares back to the end of the year.

The auditing body said the government should have received VND2.5 trillion ($110 million) in dividends.

It wanted to ascertain who stood behind the excessive reward to the company’s chief executive officer, general director, head of control and chief accountant in fiscal 2015.

The officials were collectively paid more than VND15 billion ($659,000), which is VND12.7 billion ($527,000) higher than the allowed level.

Sabeco, with the catchphrase “Vietnam’s pride,” used to be a business nearly completely owned by the government before a Thai magnate bought more than half of its shares in December 2017.

 

 

Source: Tuoitrenews

Now’s the best time to visit Hanoi’s Hoan Kiem Lake, and here’s why

Advertisements

You don’t have to wait till autumn for a spot of ‘leaf-peeping’ in Vietnam’s capital.

For anyone not familiar with leaf-peeping, it is simply taking a walk under a shady canopy and looking up to admire the foliage changing from fresh greens to yellows, reds and golds.

The leaves on the freshwater mangroves (loc vung in Vietnamese) are changing around the city’s beloved Hoan Kiem Lake (aka Sword Lake), and the breathtaking scenery it creates is a must-see.

Local photographers are out in force at this time of year to capture the vibrant changes around the lake.

The leaves glow a burning red for just a few days before falling from the trees, making the moment even more precious.

The perfect blend of a colorful landscape and the spring sunshine.

Hanoi has just been named one of the best places to visit in March by Business Insider, and leaf-peeping around Hoan Kiem Lake didn’t even get a mention!

 

 

Source: Tuoitrenews

Inspectorate proposes prosecution of MobiFone over AVG acquisition

Advertisements

Most of the violations and damages caused by MobiFone are the responsibilities of the Board of Directors and relevant key officers.

According to the conclusions of the Government Inspectorate in Document No.355/KL-TTCP issued on March 14, the actual financial status and business activities of AVG since its establishment to the time it was acquired by Mobifone were very bad.

Its total assets were over VND3.26 trillion ($143.6 million), including VND1.267 trillion ($55.8 million) of payables and VND208.6 billion ($9.2 million) of the remaining value of fixed assets. The company was constantly in the red, accumulated losses of VND1.633 trillion ($72 million) from the establishment to March 31, 2015, equivalent to 45 per cent of AVG’s charter capital.

AVG’s capital from the audio services business line mainly came from loans. This company poured VND2.473 trillion ($109 million) into capturing up to 68 per cent of the charter capital in Mai Linh Silk Worm Seed JSC (SSJC Mai Linh) and An Vien BP JSC.

This figure was 13 times higher than the initial investment of these two companies’ shareholders, and carried significant financial risks. Additionally, the information on the deals was obscure, but MobiFone still bought these two investments.

In Mobifone’s proposal submitted to the Ministry of Information and Communications (MIC) to invest into AVG, Mobifone misrepresented AVG’s financial status to the degree that it made a positive assessment: “The revenue of AVG from 2012 to 2014 increased, along with gross profit and all other indicators.”

Misrepresenting information is a violation of Article 9 of Law No.69/2014/QH13 on the management and utilisation of state capital invested in enterprises.

Mobifone’s irresponsible choice of the appraisal agency, negligence in checking the appraisal results, and relying on them to conduct the acquisition amount to a serious violation of the law.

Although AVG’s valuation was not objective and reliable—not to mention that it violated appraisal standards, Mobifone accepted the results, which showed the irresponsibility of MobiFone. Meanwhile, the cost for consultancy services was high at VND3.19 billion ($140,000) in the contract, of which Mobifone paid VND1.54 billion ($68,000).

Mobifone used the VND16.565 trillion ($730 million) price appraised by AMAX to negotiate and purchase 95 per cent of AVG’s shares. This figure included payable debts of VND1.134 trillion ($50 million). In fact, after excluding intangible assets of VND13.448 trillion ($592.5 million) and payable debts of VND1.134 trillion ($50 million), the equity of AVG was only VND1.983 trillion ($87.4 million) on March 31, 2015.

However, MobiFone acquired 95 per cent of AVG at VND8.889 trillion ($392 million)—a highly inflated price which caused a loss of about VND7 trillion ($309 million) to state capital in MobiFone, including AVG’s payable debts of VND1.134 trillion ($50 million).

During the share purchase MobiFone did not exclude AVG’s two investments outside the television sector (SSJC Mai Linh and An Vien BP), which was not in line with the directions of MIC.

In addition to the wrongdoings in formulating and submitting the acquisition proposal to MIC, MobiFone also violated regulations on share transfer contracts and payment for stake purchases and related costs.

In the agreement, MobiFone committed to provide financial assistance for AVG to pay debts of a total of VND1.094 trillion ($48.2 million). This commitment was not in conformity with the investment policy approved by MIC. MobiFone used 100 per cent of its equity to invest and resulted in a loss of VND1.3 billion ($57,270) in corporate income tax for the state budget.

As a result, MobiFone’s violations caused financial damages of VND7.006 trillion ($309 million) to the state capital in the company, as well as heavily impacted the business results in 2016 and the next years. MobiFone’s profit from financial activities in 2016 was reduced by VND321.7 billion ($14.14 million) and the accumulated damages up to December 31, 2017 were VND1.983 trillion ($87.36 million).

Based on the conclusions of the inspectorate, the chairman and the members of the Board of Directors, general directors, deputy general directors, the chief accountant, as well as relevant divisions will be subject to penal review and punished according to the law.

 

 

 

Source: VIR

Amazon welcomes Vietnamese traders, but will not come to Vietnam

Advertisements

Despite rumors that Amazon will enter Vietnam as a competitor of China’s Alibaba, the representative of the US e-commerce giant expressed no such intention when he attended Vietnam Online Business Forum today in Hanoi.  

The manager of Amazon’s Global Selling Singapore, Gijae Seong, said they have now three markets in Asia together with five markets in Europe and three others in America. The three current markets of Amazon so far are Japan, India, and Singapore.

Seong refused to answer any questions about a possible expansion in Vietnam as a retailer, but he was eager to welcome local traders to operate on the Amazon platform and export their products to the world.

With an introduction on Youtube, Seong took Mary Nguyen as an example. Nguyen started trading her tailored clothes and accessories with the trademark Marycrafts on Amazon in 2015 and posted a growth rate of 150 per cent so far. Based in Singapore, Nguyen has now four workshops with 80 workers in Vietnam.

Seong told the event participants that other traders in Vietnam could enjoy similar success when operating on the platform, adding that they can either learn how to trade online on Amazon or join a training session at the local Vietnam E-commerce Association (VECOM).

According to Nguyen Ngoc Dung, vice head of VECOM, they cooperate with the giant retailer to train small and medium-sized Vietnamese enterprises to reach foreign markets through Amazon’s platform. They offer different training courses on capacity building and legal knowledge regarding trading on foreign markets.

Dung said VECOM will work as a connection and a sharing hub between successful Vietnamese sellers and newcomers to the platform.

He said this will definitely help potential small exporters and traders who still face difficulties in exporting, especially to potential markets like the US and Europe.

Dung said the first course is expected to begin this April and will be free of charge. Candidates who wish to join should deposit VND2 million and get their money back after finishing the course.

According to data, earlier this year, Amazon’s market value surpassed Microsoft for the first time. The US e-commerce giant’s market capitalisation reached $702.46 billion in February, ranking as the third most valuable company in the world behind Apple and Alphabet, the company that owns Google.

 

 

Source: Song Huong

VIB proposes cash dividend for shareholders and ESOP shares for the bank’s staffs

Advertisements

Vietnam International Commercial Joint Stock Bank (VIB) today announces its release of documents for the Annual General Shareholders Meeting (AGM) due on March 29, 2018 in Ha Noi.

Positive business results in 2017 According to the documents, the year 2017 is a turning-point with strong transformation activities that took place on a systematic scale and that have started to show positive results. From the growth perspective, 2017 witnessed the strongest and highest growth year of VIB in the last 5 years, with all business units exceeding their sales and profit plan. Profit before tax (PBT) reached VND1,405 billion, doubling that of previous year and reaching 187% of the plan approved in the last the Annual General Shareholders Meeting. Total assets reached VND123.2 trillion, achieving 103% of the plan approved in the last AGM; credit growth reached 26%; bad debts maintained below 3%.

Relating to non-financial performances, VIB continued to be recognized by international institutions and state management agencies as one of the best banks in terms of quality and transparency. The bank was the first bank in Vietnam to win “The leading Vietnam Bank for Trade Finance for SMEs” granted by Asian Development Bank. VIB received “Vietnam’s Outstanding Innovative Banking Service Award in 2017” from IDG for MyVIB Social Keyboard, the award “The most innovative banking brand in Vietnam 2017” from The Global Brands Magazine, UK and “Best Customer Service Bank Vietnam 2017” award from Global Banking & Finance Review (GBAF).

Moody’s Investors Service upgraded VIB rating in terms of VIB’s local currency deposits and foreign currency deposits from stable to positive, and continued to affirm VIB to be in the group of highest credit rating banks in Vietnam.

The Bank proposes dividend payment by cash and bonus shares of 5 per cent and 31 per cent, respectively, for shareholders and ESOP shares for its staffs by using treasury shares.

Business plan 2018

In 2018, VIB sets the PBT target of VND2,005 billion, up 43% year-on-year. The bank is expected to propose plan for increasing the chartered capital to maximum VND 8,100 billion. The methods of raising capital are comprised of offering and issuing new shares to investors in form of private placement up to 10% of charter capital, issuing bonus shares using share premium reserves, Investment & Development reserves, Capital reserves and Retained earnings. The additional capital is aimed to provide credit to corporate and individual customers with stable financial status, potential development, priority customers in the priority areas of the Government. It’s also expected for investments in facilities, technology, products, risk management capacity as well as upgrading the branch network in order to enhance the competitiveness of VIB and expand the presence of the bank in provinces and cities across the country.

With the capital planning, VIB is expected to achieve some of the bank’s major business targets in 2018, including a 43 percent increase of earnings to VND2,005 billion. Also, the Bank’s total assets are aimed to reach VND150.231 trillion, up 22 per cent; deposits are expected to amount to VND100 trillion, growing by 22 per cent; bad debts maintains below 3%. The Board of Directors proposes that the AGM 2018 authorizes it to choose suitable time for listing VIB shares on Ho Chi Minh City Stock Exchange (HOSE or HSX) in coming time.

The AGM will be held at Hanoi Daewoo Hotel on March 29, 2018.

By Thu Nguyet, Source: VIB

Universities to be given right to determine tuition

Advertisements

The new education law allows universities to have the right to determine tuition, as well as their missions and development paths.

Dong Xuan Dam from the Hanoi Economics University said the new policy would benefit students, because training establishments will have to improve quality.

Meanwhile, students are concerned that tuition will increase too much, making it impossible for poor students to access tertiary education.

However, Dao Van Dong, president of the Transport Technology University, has reassured the public, saying that schools will have to think carefully before setting up tuition for different majors.

He said schools would not be able to raise the tuition to high levels, because they have to compete with others to attract students.

“The enrollment will be negatively affected if schools require high tuition,” he explained.

Le Huu Lap, former deputy president of the Posts and Telecommunications Institute of Technology (PTIT), also commented that students will not be paying high prices for bad training quality.

‘This is a story about the market mechanism,” he said.

Dong, while applauding the self-determination policy, said schools would still need support from the state.

The problem is that economics and social sciences training majors require higher training costs than technology.

Technology schools, which are less attractive to students, are worried that higher tuition could affect enrollment.

One solution would have the state apply measures to support schools and help attract more students to majors with low demand.

Dam said technology schools have to spend big money on laboratories and equipment.  He said it was necessary to balance the benefits of schools and students and allow talented students to access higher education.

The draft education law stipulates that accreditation of tertiary education establishments must be done by independent institutions which have legal status, not by state agencies as currently applied.

Lap said state agencies do not have enough specialists and financial capability to do such work.

“This is the job of companies and independent institutions,” he said. “And don’t worry that there will be many university rankings. Only rankings by prestigious accreditations will exist.”

At present, the tuition for one-year study at ‘star’ general schools is higher than the tuition for 4-year study at the most prestigious private universities. As universities now lack students, they dare not raise tuition. Meanwhile, the demand for lower education levels is always very high.

 

 

Source: Vietnamnet

Property market expected to be stable in 2018

Advertisements

The country’s real estate market in 2018 will maintain mid-term stability, while merger and acquisition in the sector will continue to see strong development.

This was revealed in the Top 10 Reputable Property Developers, Building Material Companies and Contractors 2018, which was announced by Việt Nam Report and online newspaper VietnamNet on Tuesday.

The surveyed top 10 firms said real estate developers would enjoy opportunities of high economic growth rate, newly-signed Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade agreement to attract more foreign investment and approval for establishment of special administrative economic zones.

However, the survey also said local property developers would face challenges of macro-economic instability in the region, State divestment making capital dispute more severe and virtual money affecting the market and condotel, officetel and hometel segments with potential risks due to lack of clear management policies.

The firms said special administrative economic zones would continue to be promising lands to lure large real estate projects.

The estate, construction and building material sectors will be linked to the Fourth Industrial Revolution.

The survey revealed that in addition to traditional marketing methods, customers were increasingly getting access to property information through internet.

More than half the surveyed people said they sought information on websites specialising in real estate and on social networks.

When the requirements of home buyers become stricter, information in the market will become more transparent. Investors and contractors will pay attention to the sustainability and life span of projects and construction buildings.

According to experts, the quality of estates in 2017 improved due to the pressure of competition. They said property developers were required to improve their ability while enhancing professionalism and quality in projects.

Last year, the real estate market saw positive changes in all segments. In Hà Nội and HCM City alone, there were 64,263 successful deals. A range of new products, such as condotel, officetel and hometel were developed, making the real estate market more attractive.

According to the report, prestige was one of the top three reasons for customers in choosing a product in the real estate sector.

Vingroup and Novaland top the list of the 10 most reputable property developers in 2018.Vingroup has been leading the market with diversified products such as apartment buildings, offices, resorts, shophouses, condotel and officetel.

Novaland, on the other hand, has been a popular brand in the south, with strong financial abilities and large land funds.

Coteccons Construction Joint Stock Company and Hòa Bình Corporation occupy the first and second positions in the list of top 10 reputable contractors in 2018.

Hòa Phát Steel Joint Stock Company and Viglacera Corporation Joint Stock Company top the list of the 10 most reputable building material companies in 2018. Both are large-scale companies in the building material sector with hundreds of construction projects every year throughout the country.

The award ceremony will be organised on April 18 at the Việt Nam National Convention Centre in Hà Nội.

 

 

Source: VNS

Foreign banks’ withdrawal no cause for concern: experts

Advertisements

The trend of foreign financial institutions withdrawing capital from their Vietnamese joint ventures has raised questions about the country’s state of financial stability, but experts claim the situation is no cause for alarm.

Since early to mid 2017, well known international institutions such as France’s BNP Paribas, Hong Kong’s HSBC and Australia’s Commonwealth Bank have attracted media attention as they took turns withdrawing money from their Vietnamese partners.

The trend continued with ANZ’s sale of their retail sector in Việt Nam to Shinhan Bank’s Vietnamese branch in December 2017. US Standard Chartered Bank sold its entire 8.75 per cent stake in a joint venture with Asia Commercial Bank (ACB) in January 2018.

The main reason for a number of international banks’ narrowed operations in Việt Nam, according to some experts, is an inevitable change in their business strategy. These banks consider maintaining previous investments less profitable than withdrawing capital from their Vietnamese partners and investing elsewhere.

Banking expert Nguyễn Trí Hiếu drew a contrast between Western banks and Asian banks. He explained that Asian investors are quite knowledgeable about Việt Nam’s market and business culture with their own native clients working here, much more so than their Western counterparts.

Hiếu told the Vietnam News Agency (VNA) that in recent years, many Asian investors from Japan, South Korea, Malaysia and Singapore have entered Việt Nam, while investors from European countries are becoming more cautious, with some banks withdrawing capital from the country.

Talking to the VNA, financial expert Bùi Quang Tín said that a divergence in business strategies is unavoidable when domestic and foreign capital investors work together for a significant length of time.

Tín shared his positive view that in the near future, foreign investors will be able to invest more in local banks, namely Vietcombank, VietinBank or BIDV, once these institutions opt for a more open cooperation policy, especially with Agribank’s imminent equitisation.

He further argued that private commercial banks should expect profit in the following years to rise, while the bad debt ratio is expected to decrease thanks to the National Assembly’s Decree 42 on handling bad credit institutions.

In the same vein, the National Financial Supervisory Commission quoted financial and banking expert Can Van Luc that the national banking system is better than it was a few years ago.

Luc opposed the suggestion that a high level of non-performing loans, lack of risk management and corporate governance have reduced Vietnamese banks’ attractiveness.

“I do not think that the country’s business market is deteriorating, nor is it the reason behind decreasing banks’ profit, as some have commented,” said Lực.

On the contrary, positive factors such as sharply increasing banking stocks, average annual growth rate of 15 to 16 per cent in the financial sector and a more open legal corridor mean Việt Nam should be seen as a potential investment destination, he added.

Here to stay

In order to attract and retain investment from foreign banks, the domestic banking system would need to be more flexible, professional and comprehensively re-structured, said Hiếu.

“The national banking system has begun restructuring in recent years, but still not all the way. Only when domestic banks are able to deal with bad debts, replenish their own capital to become healthier, more stable and more attractive, can foreign investors start pouring money in,” he explained.

And yet, ANZ Vietnam’s representative told the VNA that they will not be out of Việt Nam completely, acknowledging a long and successful operation history in the country.

According to ANZ, the transfer of their retail banking business to Shinhan Bank is part of a strategy to simplify the bank and increase its capital efficiency.

This would hopefully allow ANZ to focus its resources on Asia’s largest business segment – corporate clients and financial institutions – as ANZ is one of the four leading banks in trade support and capital in the region.

ANZ’s representative further said that the bank was committed to continuing its presence in Việt Nam, to support regional and national financial institutions and businesses.

The bank was optimistic about business opportunities in Việt Nam, thanks to the stable government, favourable population model, trade integration and foreign direct investment, as well as the rise of a new middle class.

 

 

Source: VNS

Cornell to collaborate with Vingroup to establish VinUniversity in Hanoi, Vietnam

Advertisements

Cornell University announced plans March 13 to collaborate with Vingroup, Vietnam’s largest property developer, in establishing a world-class teaching and research institution, VinUniversity.

The campus for this private, nonprofit university will break ground this year, at a ceremony in the Gia Lam urban area of Hanoi, Vietnam.

Cornell is involved in a multiyear consulting services contract that includes advising on the development of infrastructure, campus reviews, curriculum and faculty hiring. Project experts intend for VinUniversity to meet the QS 5-star rating standards, the highest audit rank available from the British education company Quacquarelli Symonds. The university will include schools of business, hospitality and real estate; engineering and technology; general education; public health and health services; nursing; and medicine.

Cornell SC Johnson College of Business will carry out much of the advising.

“Cornell SC Johnson College of Business is pleased to collaborate with Vingroup and provide extensive consultation in a variety of areas, drawing from a wealth of expertise at multiple colleges and units at Cornell,” said Rohit Verma, dean of external relations for SC Johnson College of Business. “We’re looking forward to working with Vingroup in the creation of a new university to benefit the citizens of Vietnam.”

Cornell SC Johnson will provide faculty resources as needed from across Cornell, particularly those related to business and engineering. In addition, it will provide support to Vingroup in the areas of administration, curriculum development and faculty recruitment, critical for the formation of the new university.

“Our goal is to offer quality higher education in Vietnam by establishing a top university, both excellent in teaching and research, which will contribute positively to the economy of Vietnam,” said Le Mai Lan, vice chairwoman of Vingroup. “We envision VinUni as a place where students can advance their skills in the areas of business, technology and health science, and we hope that our graduates will help Vietnam become a stronger competitor in Southeast Asia and on the global stage.”

Enrolled students will take a mix of business, technology and health policy courses, including core courses required for each of the degrees. VinUniversity will begin recruiting faculty in spring 2018. By 2020, administrators hope to enroll as many as 300 students in the university’s inaugural class.

Source: Cornell

Property sales in Industry 4.0 era

Advertisements

Applying advanced technology is not only helping real estate buyers and sellers to manage information and transactions in an easy and efficient manner, but also enhancing the sellers’ ability to connect and advertise their products. However, this is just the beginning of a long journey.

Tech on every step of the way

Trying to sell a property of some 40 square metres in Vinh Hung, Hanoi, a seller named Hoang often visits Facebook and other online property trading platforms to check out the prices of properties of the same size. His online activities have in fact been collected by software developers and he is considered a target for pop-up ads and email marketing. Hoang has been seeing the ads of properties that he once browsed through or those in similar price and size ranges in the neighbouring areas that are of concern to him.

Most people like Hoang are rather surprised about these new types of marketing and advertising. They do not even know how these ad companies or real estate agencies get their phone numbers. It turns out that this is just a new trend of accessing potential customers among property developers and distributors—the beginning of Industry 4.0 in the property sector.

Given the development of the Internet of Things (IoT) and artificial intelligence (AI), software programmers and Internet providers can collect data from users to form a big data warehouse, scrutinising the trends of Internet usage, online shopping, and products of interest.

In a bid to reach target customers in a rather competitive market, mortgage brokers that are sensitive enough have launched their marketing campaigns on social media platforms, such as Facebook or Zalo, or through professional online advertising channels like Google AdSense. Many mortgage brokers even purchase customer data, which may include not only the customers’ contacts but also their relationships, habits, and demands.

Nguyen Quoc Anh, deputy general director of Dai Viet Group, the operator of online property trading platform batdongsan.com.vn, noted that with the development of technology, the online trading of properties has gained popularity due to its convenience and cost savings.

Property Technology, or PropTech, is the new generation of technology that helps transform the housing market through three main arms, comprising property information, property transaction, and property management. Through PropTech, developers will be able to manage their property trading and transactions completely online, targeting the tech-savvy younger generation.

In the past two years alone, data from batdongsan.com.vn shows that some 52 per cent of homebuyers were in the 25-34 age bracket. This age group grew up with technology, social media, and integrated economies. They are highly adaptable and always willing to share facilities with one another.

As a result, they are very fond of PropTech that helps them check information, compare the prices and products, calculate loans, and find financial solutions that fit them best. What is more, it reduces the risks of buying and selling houses, particularly when making the purchase through an agency. Procedures for housing transactions are also carried out online to save time.

Professionalism needed

According to Pham Thanh Hung, vice president of CEN Group, the opportunity to tap into the real estate market through disruptive technologies is huge, yet many PropTech startups have ended in failure. A reason for this is that they are often followers and thus cannot make predictions. That being said, if they had started off with a PropTech app back during 2013-2014, right before the housing market begun to warm up, they would have been far more successful.

Yet there have been a number of startups that develop property-related technologies. With large-scale marketing campaigns and customer networks, they have been reasonably successful. However, there were difficulties along the way.

User behaviour is one of them when many Internet or smartphone users are still new or rather unfamiliar with the PropTech apps or the application of disruptive technologies in real estate. Mortgage brokers, at the same time, do not fully understand the apps themselves and so cannot apply the advanced technology in their property sales.

In addition, technology cannot replace the human factor, in this case, the professional mortgage brokers. Should mortgage apps be developed and welcomed by users, real estate agents may no longer find work, as sellers and buyers could contact each other through the apps. But a property buyer still needs a professional service provider to advise him on a purchase and whether the prices are reasonable. Especially, the related legal procedures require professional assistance.

Last but not least, in property dealings, creditability is the most important thing. If an app fails to build trust amongst mortgage brokers, buyers, and sellers, it is destined to fail. This has in fact happened to some e-commerce businesses that forged information and at the end lost customers’ trust.

According to Hung, the application of technology is an indispensable trend in online property trading. While it cannot completely replace human agents, it is a new breeze of change promising to revolutionise the real estate sector to usher in the era of Industry 4.0.

Adopting disruptive technologies is the new real estate trend, and it is a costly game to play as tech changes are unpredictable. The more startups or businesses join the race of advanced technology, the fiercer the competition will be, helping drive it towards professionalism. The ultimate beneficiaries will be homebuyers.

 

 

Source: Viet Duong

Barack Obama’s $6 dinner table preserved for posterity in Vietnam

Advertisements

A table where former US President Barack Obama ate with chef Anthony Bourdain on an official trip to Vietnam two years ago has gone on display.

The table, complete with dinner set and empty beer bottles, has been encased in glass.

The owners of the Hanoi street food restaurant where the two men ate for $6 (£4) on plastic stools say the idea came from their customers.
They wanted to see where Mr Obama had sat and what he had eaten.

Photo: Facebook Dam Ha Phu

“The customers love it, many take photos next to the table,” Nguyen Thi Hang Nga, co-owner of the Bun Cha Huong Lien restaurant, told the BBC.

“For us, it is a nice memory that we will cherish forever. It is not a PR gimmick, I don’t think we get more clientele.

“The display was set up just before the Lunar New Year [in mid-February] and I haven’t noticed any change in the flow of diners.
“Of course, the bowls and plates on display have been washed, as well as the empty beer bottles!”

The honour is normally reserved for the country’s top leaders such as Ho Chi Minh who had their meals kept this way for posterity.
It is thought to be the first time a foreign dignitary has been remembered in this way.

Bourdain says he is not sure what to make of it.

The original photo of the 2016 meal which the chef shared on Instagram drew more than 120,000 likes and thousands of comments.

Source: BBC

Uber agrees to sell most of its Southeast Asia business to rival Grab

Advertisements

Uber would take about 30% stake in Grab; deal not sealed yet.

Uber Technologies Inc. has reached an agreement in principle to sell most of its Southeast Asia operations to local rival Grab Inc., ending a costly fight for market share in the fast-growing region, according to people familiar with the matter.

In exchange for its operations in Southeast Asia, Uber would gain a roughly 30% stake in Grab, these people said. The two companies are still hashing out the final terms of the pact, the people said, cautioning any deal would be subject to regulatory scrutiny. One of the people said Uber’s stake in Grab could wind up being smaller.

Uber was spending some $200 million annually to take on Grab and another upstart in the region, PT Go-Jek Indonesia, two of the people said. Go-Jek, a motorcycle-taxi service based in Indonesia, recently raised more than $1 billion in funding from KKR & Co. and Tencent Holdings Ltd., among others.

A deal could relieve pressure on Uber’s new chief executive, Dara Khosrowshahi, who is trying to shore up the company’s finances ahead of an expected 2019 initial public offering. Uber posted a net loss of $4.46 billion in 2017 on sales of $7.36 billion.

 

 

Source: The Wall Street Journal

Local cosmetics sector needs preferential policies

Advertisements
Vietnam needs more preferential policies to attract investors to the local cosmetics sector, economic experts have recommended.  

According to the Vietnam Association of Essential Oils, Aromatherapy and Cosmetics, import and export turnover of cosmetics products surged from $3 billion in 2016 to $6 billion in 2017.

Due to the various materials that Vietnam can offer to produce cosmetics, the country has become a potential hub for foreign manufacturers.

In addition to offering incentives to foreign cosmetics firms, Vietnam should come up with measures to encourage the growth of local beauty products, experts recommend. (Photo sggp.org.vn)

Material advantages

Claudia Bonfiglioli, CEO of Information Beauty, said that sales generated from worldwide organic beauty products were $480 million last year, up 10 per cent year-on-year.

The organic cosmetics sector is expected to double in value this year, she said, adding that this has encouraged multiple cosmetics manufactures to switch to organic products.

Vietnam is among a number of countries able to offer organic materials with high-added value such as coconut, mu trom (sterculia foetida), turmeric and aloe vera at affordable prices.

In addition to its powerful labour force, Vietnam has a large market ready to buy organic beauty products.

Of nearly 100 million people, 60 per cent of the population is under 35 years old, according to the Nielsen Company.

Vietnam’s average per capita income has risen to VND53.5 million ($2,431) per year in recent years, the company said.

Bart Verheyen, director of Medicare’s commercial affairs, said that within six years, Medicare had opened 65 stores in Việt Nam with a focus on beauty and health products. Medicare plans to double its number of stores in the years to come.

While organic beauty products are expected to be on-trend, imported cosmetics will be preferred to local ones, he added.

Local beauty products

Local beauty companies are encountering many challenges, given the significant growth of the imported beauty sector and expansion of cosmetics distribution systems by foreign firms.

According to director of the Vietnam Association of Essential Oils, Aromatherapy and Cosmetics, Nguyen Van Minh, of the $6 billion of total export/import turnover in the cosmetics sector, only 5 per cent is generated from sales of local beauty products.

Though turmeric, aloe vera and other materials are considered precious, domestic firms have sold them in raw form only and neglected extraction of their essence for production of higher-end products.

Thorakao and Miss Sai Gon are among a few local brands that still have a share in the market, although it is modest.

Limited capital investment presents another challenge for domestic companies to expand their scale of production and incorporate modern technologies in their production chains.

This challenge, however, cannot be overcome in the short term, Minh said.

The association has sought approval from authorities to establish a research centre that maximizes the use of existing materials and assists in effective manufacture of local cosmetics products.

However, the proposal has not received any feedback.

On a different note, the local authority’s failure to effectively monitor operations of unlicensed firms and seize their counterfeit cosmetics has greatly affected consumers’ trust in local products.

Future growth

According to economic experts, Vietnam should come up with measures to not only attract investment from foreign cosmetics firms but encourage growth of local beauty products.

New local beauty products should be introduced, while the establishment of a research centre should be considered to bring the best out of the abundant raw materials for cosmetics production in the country, they said.

Cosmetics firms should also keep up with new trends in organic products to efficiently produce and distribute products widely embraced by consumers.

 

 

Source: VNA

Exit mobile version