With more and more Chinese tourists arriving, why not encourage them to spend more?
Chinese e-commerce conglomerate Alibaba has signed an agreement with the National Payment Corporation of Vietnam (NAPAS) that will allow Chinese tourists to use its online payment platform in Vietnam.
The agreement with Ant Financial, Alibaba’s financial services arm, will enable Chinese travelers to use the Alipay platform throughout Vietnam via NAPAS member banks and its intermediary payment service networks, according to business technology websites.
Under the agreement, people with cards issued by NAPAS member banks in Vietnam will be able to use Alipay to make purchases on Alibaba’s websites, such as AliExpress and Taobao.
NAPAS is the only intermediary payment service provider licensed by the central bank to provide electronic payment services in Vietnam. The corporation operates an inter-bank connection system with tens of thousands of ATMs run by 43 banks, including Vietnam’s top lenders Vietcombank, Vietinbank and BIDV.
“The collaboration with Alipay is part of our strategy to expand international cooperation and to explore new payment solutions,” NASPAS chairwoman Nguyen Tu Anh said, as cited by ZDNet.
Official figures showed that more than 3.2 million Chinese tourists visited Vietnam in the first 10 months this year, up 45.6 percent from a year ago and accounting for nearly a third of foreign arrivals.
A Bloomberg report last December, citing Credit Suisse figures, said a 30 percent increase in spending by Chinese tourists would boost Vietnam’s gross domestic product by nearly 1 percentage point.
Alipay, which has more than 520 million daily users globally, has been expanding its global presence along with China’s rising outbound travel.
The payment service entered the Australian market late last year under a similar agreement with the Commonwealth Bank of Australia.
News of the deal with NAPAS comes a week after Alibaba founder Jack Ma visited Hanoi and spoke at a prominent e-payment forum co-hosted by VnExpress and NAPAS.
At a meeting with Vietnamese Prime Minister Nguyen Xuan Phuc, Ma said he would consider establishing a store for Vietnam on Alibaba’s e-commerce app.
Gambling laws have been relaxed and the race is on to corner the billion-dollar market.
Macau’s biggest junket operator Suncity Group plans to pour billions of dollars into building a resort in Vietnam’s popular resort town of Hoi An, Bloomberg reported.
The group has teamed up with Vietnam-based closed end fund VinaCapital and Hong Kong-based conglomerate Chow Tai Fook to build the $4 billion integrated resort and casino in the coastal town, which is scheduled to open in 2019.
Suncity owns 34 percent of the coastal project through its Hong Kong-listed subsidiary and has a management contract to operate the casino.
The group is one of a number of companies that have been eying Vietnam’s gaming business expansion, especially now the country has loosened regulations on gambling.
Singaporean resort developer Banyan Tree Holdings has also asked the government to license a casino at the Laguna Lang Co resort development.
The resort, located about an hour by road north of Da Nang International Airport, has more than 300 hotel rooms and villas plus a golf course, spas, residences and a conference center. The second phase of development at the complex will include more hotel rooms, residences and a casino, if permission is granted.
Vietnam’s decision to allow locals to roll the dice in casinos for the first time is one of the reasons for the surge in gaming investment. Before the law was changed only foreigners were allowed in casinos.
Earlier this year, the Vietnamese government announced that from mid-March and for a three-year trial period, citizens aged over 21 with a monthly income of at least VND10 million ($445) will be allowed to gamble in local casinos. Similar to rules governing gambling in Singapore, Vietnamese people are charged VND1 million per day or VND25 million per month as an entry fee.
The country’s average annual income was around $2,200 last year.
Vietnamese people are big fans of gambling, so the new regulation was expected to help casinos attract more customers.
A study by Augustine Ha Ton Vinh, an academic who has researched Vietnam’s gaming industry extensively, showed Vietnamese spend an estimated $800 million each year gambling abroad in places such as Macau, Singapore and just across the border in Cambodia.
Hoping to tap tourists and possibly domestic gamblers, local property conglomerate FLC Group has plans to build a casino resort in the Van Don Special Economic Zone in northern Vietnam. Quang Ninh Province’s People’s Committee has recently given the firm the go-ahead to build the 4,000-ha complex, including a casino, five-star hotel, convention center and golf course on the islands of Ngoc Vung and Van Canh at a cost of $2 billion.
Gaming companies are interested in the casino business in Vietnam because the industry is still new and there’s little competition, said Nguyen Ngoc Thanh, vice chairman of the Vietnam Property Association.
Those that arrive here first could easily dominate the market and maximize their profits, he added.
In addition, the Vietnamese government has recently reduced obstacles for would-be casino developers. Hanoi used to require a minimum investment threshold of $4 billion, but that figure has been revised down to $2 billion as part of a recent decree.
With about 30 gaming facilities, Vietnam could generate as much as $1.2 billion in gross gaming revenue each year, according to a Grant Govertsen, an analyst with Macau-based Union Gaming Securities Asia.
Vietnam’s eight recently-licensed casinos, mostly small, generate an estimated $300 million in gaming revenue, according to Forbes magazine.
Not a surefire bet
Despite investors’ eagerness to open casinos in Vietnam, it has not been that easy to attract gamblers, and many casinos have been performing below expectations.
The Grand Ho Tram Strip is an example.
In 2016, the Ba Ria-Vung Tau-based resort, which opened in July 2013 with 541 hotel rooms and a casino with 90 tables and about 500 gaming machines, was losing up to $3 million a month, Nikkei Asian Review quoted Ben Lee, who acted as a consultant for Ho Tram in its early stages, as saying.
Former head of the Foreign Investment Agency under the Ministry of Planning and Investment Phan Huu Thang said casino complexes have failed to attract gamblers because of poor services.
Most casino complexes in Vietnam are small-scale and only offer gaming. They do not provide entertainment or shopping services, he said.
Meanwhile, some casino managers have blamed their losses for a lack of Chinese gamblers, the main clientele for most casinos in Vietnam, citing the case of the Royal International Corporation.
The firm, which runs the only casino in Vietnam’s famous Ha Long Bay, said in a new financial report that its losses in the third quarter had jumped 23 times from a year ago to more than VND69 billion ($3.04 million).
That added to a VND100 billion ($4.4 million) loss in the first nine months, a fourfold increase from 2016, the company said.
Most of the losses were incurred by its casino operation, but its villa business also played a small part, it said.
Some experts have warned that Vietnam needs to carefully consider licensing more new casinos as they could saturate the market.
The country ranks sixth globally in terms of how many of its students were studying in the U.S. in the 2016-2017 school year.
The number of Vietnamese students in the U.S. has increased for the 16th year in a row with more than 22,400 Vietnamese students attending American colleges and universities in the 2016-2017 academic year, a 5 percent increase from the previous year, new data shows.
Of the total figure, 68 percent were undergraduates, 15.6 percent were graduate students, 9 percent enrolled in Optional Practical Training (OPT), and the remaining 7.4 percent were pursuing non-degree programs, according to the annual Open Doors report by the U.S.-based Institute of International Education, which focuses on international student exchange and aid, foreign affairs and international peace and security.
Vietnam remained the sixth leading economy of origin for all international students in the U.S.
China retained top spot, followed by India, while South Korea exchanged places with Saudi Arabia to stand in third and Canada came in fifth.
The rest of the top 10 was made up of Taiwan, Japan, Mexico and Brazil.
2016-2017 marked the second consecutive year that U.S. colleges and universities hosted more than one million international students, reaching a record high of 1.08 million, said the report.
Engineering, business and management, and math and computer science remained the top fields of study for international students in 2016-17. Math and computer science were the fastest growing fields of study with a rise of 18 percent from 2015-16.
The top 10 states for international students were California, New York, Texas, Massachusetts, Illinois, Pennsylvania, Florida, Ohio, Michigan and Indiana.
The data also revealed that Vietnam is becoming a more popular destination for American students. In 2016-17, Vietnam welcomed 1,012 students from the U.S., up 9.8 percent on-year.
In his speech at the APEC CEO Summit in central Vietnam on November 10, U.S. President Donald Trump noted: “Vietnamese students rank among the best students in the world. And that is very impressive.”
IFC, a member of the World Bank Group, is providing Vietnam International Commercial Joint Stock Bank (VIB) with a $185 million syndicated loan. The IFC-led financing package aims to address two key development challenges in Vietnam — the financing gap faced by micro, and small and medium enterprises (SMEs), and lack of affordable housing.
Of about 600,000 formal active SMEs, only 30 percent could access bank capital with the total loan amount accounting for just three percent of the banks’ portfolio. As Vietnam aims to emerge as a manufacturing and commercial hub in South East Asia, long-term funding for SMEs is becoming more critical. Also, the rapid urbanization is creating new demand for housing in major cities, with estimated needs of 374,000 additional units in cities annually.
Given the scenario, IFC’s long-term funding commitment would enable VIB to double its SME and affordable housing portfolios over the next five years, lending more than $1 billion in total. “The much-needed syndicated funding from IFC and participating banks will help grow VIB’s SME and affordable mortgage portfolios, positioning the bank to become one of the leaders in these segments,” said Han Ngoc Vu, VIB Chief Executive Officer.
Han Ngoc Vu, VIB Chief Executive Officer.
“The long-term financing is particularly relevant in Vietnam, where debt markets are still nascent, limiting the funding channels and options for financial institutions.”
The five-year financing package comprises $100 million from IFC’s own account and $85 million from three international lenders including Cathay United Bank Co. Ltd, Industrial and Commercial Bank of China Ltd., Hong Kong Branch, and Thailand’s Kiatnakin Bank Public Company Ltd.
“This syndicated facility marks a milestone for VIB and other local privately owned banks in Vietnam to access long-term funding from foreign commercial lenders, enabling them to grow longer-term financial products such as residential mortgage lending,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR.
“This project will support the country’s key development goals of creating jobs, developing SMEs, and strengthening industrialization and urbanization.”
VIB joined IFC’s Global Trade Finance Program in 2011 and the current trade line of $120 million has enabled it to help local companies increase their import and export activities and create jobs. IFC also advised the bank on SME banking to effectively and sustainably serve the SMEs, one of its strategic segments, going forward.
About IFC IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY17, we delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity.
About VIB Established in 1996, Vietnam International Commercial Joint Stock Bank (VIB) has now become one of few local banks with the highest credit ranking rated by Moody’s. Currently, VIB owns 160 branches/ transaction offices nationwide and banks with more than 8,000 correspondent banks in 61 countries. The bank has over 4,000 employees serving 1.6 million personal customers and 34,000 corporate customers. Commonwealth Bank of Australia (CBA), VIB’s strategic shareholder, is one of the world’s 10 largest banks by market capitalization, with more than 100 years of history. CBA now owns a 20 percent stake at VIB. Through the capability transfer program, both parties have collaborated closely and efficiently to make VIB the most innovative and customer-centric bank of Vietnam.
The fierce opposition by traditional taxi firms to Uber and Grab, the uncertainty of state management of bitcoins, and the number of Vietnamese starting up businesses in Singapore all show that it is necessary to amend the legal framework in the context of the digital economy.
The development of the digital economy may increase GDP in ASEAN by $1 trillion in the next 10 years, according to one research report.
Thailand, for example, has established the Ministry of Digital Economy and Society whose functions are planning, developing and implementing activities for the digital economy.
Malaysia has decided to allocate a budget of $36 million to develop an e-commerce ecosystem and has also encouraged digital invention movement with projects worth $100 billion, to be implemented in the next 10 years.
Akamai’s quarterly reports showed that Vietnam ranked 95th in the world in internet connection speed in 2015, but jumped by 37 grades to 58th in the first quarter of 2017.
In terms of a database, Vietnam has many companies that collect, analyze and process specialized data.
Considerable improvements in information security have been noted with a report from the Vietnam Information Security Association saying that the information security index has been increasing year after year, surpassing the world’s average level for the first time in 2016.
Vietnam is in not inferior to regional and world countries in the growth rate of high-speed internet, smart electronic devices and mobile phone users. It is expected that by 2020, the number of Vietnamese smartphone users will increase by 30 times to 60 million (60 percent of population) compared with 2010.
“We have basically become ready,” said Nguyen Xuan Hai from EPG-AVSE Global, the Association of Vietnamese Scientists and Experts.
“The images of older people reading news on iPads or children learning via the internet, and images of businesspeople connecting with their assistants via mobile phones or housewives doing online shopping have become very common,” he said.
As information technology develops rapidly, the legal framework cannot keep pace with it, he said.
According to Hai, there are two scenarios for legal framework. First, apply a closed-door policy and rely completely on internal resources. Second, remove legal barriers to let technology firms develop freely.
Both scenarios have their advantages and disadvantages, and Vietnam has to make a choice. However, the 4.0 revolution bringing about the digital economy is inevitable.
The annual startup promotion event Techfest Vietnam 2017, themed “Ecosystem connect”, began in Hanoi on November 14.
Addressing the opening ceremony, Deputy Prime Minister Vu Duc Dam stated Vietnam welcomes international investors and scientists to join its innovative efforts, making creative startup a practical movement.
A legal framework coupled with support from the Government and succeeded pioneers are key to the startup development, he added.
On the occasion, the Ministry of Science and Technology debuted the national portal for startup and innovation – http://www.startup.gov.vn – to help people access updated information, opportunities, and success stories nationwide.
With larger scale compared to last year’s edition, the Techfest Vietnam 2017 was estimated to attract up to 4,500 visitors, 200 startups, and 130 investors and funds.
It featured six potential arenas for startup-related activities – agriculture, education, tourism – food services, health, new technologies, and start-up support communities.
The 2016 Techfest attracted nearly 170 investors and more than 3,000 visitors.
With young population, Vietnam is working towards becoming a start-up nation in the Asia-Pacific Economic Cooperation (APEC). The Government targets to have one million effective enterprises by 2020.
Former England and Arsenal player Sol Campbell sent a message to Vietnamese football fans through Arsenal’s Facebook page yesterday.
In his video Campbell said he “was very excited to come to Viet Nam and let’s make it a great event. See you soon!”
The well-known midfielder will visit fans in HCM City from November 16-19 as the official ambassador of Arsenal.
Campbell is one of the members of Arsenal’s unbeaten squad in the Premier League in 2004, along with Freddie Ljungberg and Robert Pires who came to Viet Nam previously.
During his stay, Campbell will take part in different activities with fans, such as a cooking contest. He will also offer commentary on a match between Arsenal and Tottenham. He will join conferences on training practices and healthy living, as well as visiting historic site in the city.
He will tell stories about his time as a competitor, including memories of Arsenal beating big rivals like Manchester United and Liverpool to take the trophy in 2001-02 and 2003-04.
Campbell, 43, played for Notts County, Porstmouth, Tottenham, and Arsenal before ending his career with Newcastle United in 2011.
He played 20 years with 646 matches and scored 29 goals at the Premier League. Apart from two titles with Arsenal, Campbell bagged one League Cup with Tottenham and an FA Cup with Portsmouth.
In his 11 years on the national team, he played 73 matches and netted one goal. He was named among the Best 11 of World Cup 2002 and Euro 2004.
Actor Truong The Vinh received the “Most Promising Award” of the 1st PIFFA Supreme Awards which was held in Kuala Lumpur, Malaysia from November 4-6.
The actor is the only Vietnamese artist who was honored at the film fest for his role in the film Choi thi chiu (Miss, Miss, Miss… and Miss!).
The organizing board also granted awards, including Best Actress to Chutimon Chuengcharoensukying of Thailand; “Best actor” to Farhad Aslani of Iran; Best Director to Stanley Tong of China.
The 1st PIFFA Supreme Awards was founded by Profima International Film Festival And Awards (PIFFA).
The awards presented by this ceremony are recognized by the Professional Film Workers Association of Malaysia, The National Film Development Corporation Malaysia (FINAS) and Ministry of Communication and Multimedia (KKMM).
The event attracted filmmakers and artists from around the world, such as Japan, Iran, South Korea, Thailand, Indonesia, Vietnam and others.
Vietnamese movie star and director, Ngo Thanh Van, known as Veronica Ngo, will star in the movie Star Wars: The Last Jedi, confirmed its distributor, Walt Disney Studios.
Vietnamese-American actress, Kelly Tran, who will also star in Star Wars, will come to Viet Nam at the end of this month before the movie hits the theatres internationally on December 15.
Kelly Tran and Van will address a press conference in Viet Nam to introduce and promote the movie. This will be the first time that Walt Disney will organise a movie promotion event in Viet Nam, with the attendance of a Hollywood star.
Kelly Tran will play the role of Rose Tico, a maintenance worker for the Resistance, who joins John Boyega’s Finn on a mission “Behind enemy lines”.
Vân will portray Paige Tico, Rose’s sister. Paige is a gunner and a pilot in the Resistance during the First Order, who gets some coaching from X-Wing flyboy, Poe Dameron, played by Oscar Isaac.
In Lucasfilm’s Star Wars: The Last Jedi, the Skywalker saga continues, as the heroes of The Force Awakens join the galactic legends in an epic adventure that unlocks age-old mysteries of the Force and shocking revelations of the past.
Early this year, Van played the role of a killer named Tien in the US fantasy thrill movie, Bright, which starred Will Smith and Joel Edgerton. In 2015, she also played a supporting role in a sequel to the 2000 Hollywood blockbuster, Crouching Tiger, Hidden Dragon II: The Green Legend.
Van, who grew up in a small town in the northern province of Tra Vinh, began her career as a film director and producer after more than 15 years of working as a fashion model and pop singer.
HCMC has put forth a plan to build Metro Line No.3A from Ben Thanh Market in District 1 to Tan Kien in Binh Chanh District that together with the Metro Line No.1 will connect the western, central and eastern parts of the city.
Metro Line No.3A linked with Metro Line No.1 from Ben Thanh Market to Suoi Tien Park, which is now under construction, will form a metro network that connects two major bus stations of the city, Mien Dong in the east and Mien Tay in the west, and passes through central districts.
Planned to be up and running in 2026, Metro Line No.3A will help ease congestion in the western part of the city, reduce traffic accidents and vehicle emissions, and boost the socio-economic development of the city.
The project will be divided into two phases. Phase one will stretch from Ben Thanh Market to Mien Tay bus station, with a total length of 9.7 kilometers. Phase two from Mien Tay bus station to Tan Kien will be more than 10 kilometers long. Nearly half of the metro line will go underground.
According to a report sent by the HCMC government to the Ministry of Planning and Investment on November 10, the project requires a total investment of about VND62 trillion (US$2.73 billion), or more than US$110 million per kilometer.
Compared to other metro projects, like Metro Line No.1 costing US$97 million per kilometer and metro lines in Singapore, Malaysia and Hong Kong with US$103-345 million per kilometer, the estimated cost of Metro Line No.3A is credible.
It is estimated that only 11.3% of HCMC residents will use public transport, including metro, buses and taxi cabs, by 2030, while the remainder will mainly travel by private vehicles like motorbikes and cars.
Investment in the metro system is aimed at discouraging the use of private vehicles, thus reducing greenhouse gas emissions and traffic congestion.
Three electric car routes proposed to serve river bus passengers
In another development on public transport, the HCMC Department of Transport has proposed the municipal government open three electric car routes to transfer passengers of river bus services which will be launched this month.
The department last week wrote to the municipal government asking for permission to open an electric car service in the downtown and two others in District 2.
The first route will start at Bach Dang Wharf, running along Hai Ba Trung, Dong Du, Mac Thi Buoi, Lam Son Square, Le Loi, Nguyen Hue, Le Thanh Ton, Pham Hong Thai, Pham Ngu Lao, Yersin, and Tran Hung Dao, and then back to Pham Ngu Lao, Pho Duc Chinh, Nguyen Cong Tru, Ton That Dam, Vo Van Kiet, Nguyen Thai Binh, Ton Duc Thang, Nguyen Hue and Me Linh Square before coming back to Bach Dang Wharf.
The route will pass through famous destinations in the city such as Ben Thanh Market, the Opera House, Nguyen Hue pedestrian square and some large hotels.
The second route will depart from Binh An Wharf, running on Street No. 20, Tran Nao, a road in parallel with Hanoi Highway, Mai Chi Tho, Dong Tay, Street No. 24, then come back to the parallel road on Hanoi Highway, Tran Nao and Street No. 20, and ends at Binh An Wharf.
Route No. 3 is planned to carry passengers from Thao Dien Station, going through Street No. 66, Nguyen Van Huong, Thao Dien, Xuan Thuy, Nguyen Van Huong, Street No. 66 and come back to Thao Dien Station.
The department suggested using ten electric cars with eight to 14 seats each on these routes from 5 a.m. to 22 p.m. every day.
Since early this year, HCMC has piloted three electric car routes in the city center and Phu My Hung area in District 7. These vehicles serve 800 to 1,000 passengers a day.
The department said electric car routes connecting road and waterway transport services would help ease traffic congestion in the city. The first river bus route in the city linking Bach Dang Wharf in District 1 and Linh Dong Ward in Thu Duc District with a total length of 10.8 kilometers is expected to be put into service this month.
The HCM City People’s Committee has approved the purchase of a number of diesel buses that will replace older ones that are in poor condition.
The city’s Transport Department was asked to ensure the buses’ quality and buy only enough diesel buses to replace those in poor condition. The diesel buses are used mostly on bus routes without Compressed Natural Gas (CNG) refuel stations.
The city had previously planned to replace a number of older diesel buses with environmentally-friendly CNG buses by the end of the year, but it has faced problems installing CNG refueling stations. There are only four CNG refuel stations in the city.
The Department of Transport is working with the city’s departments of Planning and Investment as well as Industry and Trade, and other relevant authorities, to speed up the installation of CNG refueling stations in other areas of the city.
In a bid to comply with a central bank regulation on cross ownership, Vietcombank is planning to divest its entire stake in five units, including four banks and a finance company, Chairman Mr. Nghiem Xuan Thanh said.
The fourth-largest bank in Vietnam by assets expects to reap VND1 trillion ($44 million) from selling all of its 6.97 per cent in Military Bank and 8.2 per cent in Eximbank in early 2018, according the Mr. Thanh. It previously planned to retain stakes in these two banks, with Military Bank returning good dividends, and an Eximbank that it was “advised” to support during the restructuring process.
The bank earlier announced that it will offer 13.2 million shares or 4.3 per cent of Saigonbank at an initial price of VND12,550 ($0.55) each, and 6.6 million shares of the Cement Finance Company (CFC) at VND11,549 ($0.5) each at the upcoming auction on November 20.
The deals are expected to generate roughly VND242 billion ($10.7 million) for Vietcombank, while it also aims to offload its entire 5.07 per cent holding in the Orient Commercial Bank (OCB) in the time to come, the Chairman said.
Cross ownership was rampant in Vietnam’s banking system five years ago, presenting opportunities for vested interests and manipulation. To deal with the pressing phenomenon, the State Bank of Vietnam (SBV) issued Circular No. 36 in 2016, stipulating that a commercial bank can own stakes in at most two other credit institutions with less than 5 per cent of voting rights.
A recent draft law by the SBV, which revises the Law on Credit Institutions, is set to further crack down on the issue.
Cases of purchase, sale, or transfer of shares with a value of 1 per cent or more of a bank’s charter capital will require the SBV’s written approval before implementation, while the money to buy the shares must be proved legally and must not have been originated through loans, according to the draft law.
The draft law also stipulates that major shareholders and related persons must not own more than 5 per cent of the charter capital of another credit institution.
Many banks have delayed the withdrawal from other banks although the deadline was set for 2015, with Vietcombank itself having been required by the government to comply with the rules. With the benchmark VN-Index rising 32 per cent since the start of this year, together with strong rallies of banking shares and solid earnings, Vietcombank is expected to see no difficulties in divesting the shares.
Vietcombank saw its third quarter pre-tax profit rise 31 per cent year-on-year to VND2.68 trillion ($119 million), resulting in a pre-tax profit of VND7.9 trillion ($348 million) for the first nine months of the year, an increase of 25 per cent year-on-year and equivalent to 86 per cent of its annual plan.
The strong increase in Vietcombank’s pre-tax profit was attributed to healthy growth in financial services, core business activities, and other activities. It was able to keep its provision for credit losses stable at VND4.5 trillion ($198.2 million), nearly unchanged against the same period last year.
After the first three quarters, Vietcombank had total assets of VND898.5 trillion ($39.57 billion), mobilized capital of VND688 trillion ($30.3 billion), and total lending of VND536 trillion ($23.6 billion), with all figures increasing by between 14 and 16 per cent on an annual basis.
Its bad debts as at September 30 stood at 1.15 per cent, down from 1.51 per cent as at the end of 2016, thanks to a decline in sub-standard and potentially irrecoverable debts.
Apple Vietnam has asked that some requirements on import examination be removed to shorten the time needed for customs clearance.
Vietnamese businesses are also complaining about the complicated procedures.
Under the current regulations, Apple must obtain licenses for every consignment of imports. It has also asked to remove the requirement on licenses to import Apple Watches and licenses to import mobilephone products stipulated in Circular 18/2014.
Chair of the Government Office Mai Tien Dung spoke about Apple’s imports at a working session with ministries on examination procedures.
“Even iPhone 7 and iPhone 8 also have to bear examination, and Vietnam doesn’t have laboratories and technologies for examining,” Dung said. “The products from G7 countries still cannot be done in Vietnam, but we still examine them.”
Meanwhile, an analyst said Vietnamese inspection bodies examine imports without specialized instruments. Therefore, it is unreasonableto have imports examined and collect VND1 million in examination fees.
Not only Apple, but other gian firms also have difficulties because of the complicated procedures in Vietnam. VCCI’s (Vietnam Chamber of Commerce & Industry) chair Vu Tien Loc commented that the requirements on administrative procedures are so complicated that even Boeing cannot satisfy them.
Meanwhile, FPT’s CEO Bui Quang Ngoc commented some policies are ‘designed in a way to trap businesses’.
A representative of a foreign-invested technology enterprise said it still has to follow a strict examination procedure even though the imports are only for internal testing, not commercial purposes.
“It takes too much time. In general, the procedure lasts 35-45 days,” he said.
He went on to say that there are many problems in MOIT’s (Ministry of Industry and Trade) Circular 04/2014 on used imports.
At his company, computers are replaced once every two years. The new computers are imports, so the enterprise has to follow certain procedures.
His company wants to donate the old computers to schools or organizations, but it had to donate computers to Myanmar because of the complicated procedures.
The Ministry of Finance (MOF) has agreed with Apple that it would be better to remove the licensing for every consignment of imports in accordance with Circular 18.
Regarding the conformity certification, MOF thinks that Vietnam needs to recognize the conformity certificates granted by international organizations as the basis for assessing import quality.
Regarding the licensing to Apple Watch device imports, the ministry said if the capacity of Apple Watch products is less than 60 mW, Apple does not have to get a license for imports from the Ministry of Information and Communication.
The sound of “1, 2, 3, Zo” rings out at bia hoi establishments around Vietnam every day and night. Bia hoi, or local draft beer, has been the most popular drink among Vietnamese people, especially in the north, for many, many years but a challenge has been thrown down in recent times, by craft beer.
The craft beer industry has been booming in the West for a decade. It arrived in Vietnam just a few years ago via some foreigners testing the waters with their own locally-made equivalent. Craft beer, it’s said, expresses the personality and style of the master brewer and the brewery where it’s made.
Production scale is usually quite small, with different tastes coming from master brewers creating his or her own formulas, in which more or less ingredients are added to create a unique flavor.
This requires the brewer be constantly creative and innovative, as not all formulas produce a tasty beer. Still, the number of new craft beer flavors numbers in the hundreds every year.
Adaptable consumers
Ho Chi Minh City’s Pasteur Street Brewery, the first craft brewer in Vietnam, made 300 differently-flavored beers in its first year. Director of the Pasteur Street Brewing Co., Mr. John Reid, is considered the key individual behind the arrival and the rising popularity of craft beer in Vietnam.
With Jasmine IPA its best-seller, Pasteur Street is the largest company in the industry in Vietnam and two years since getting underway now exports to several countries in the region.
In a relatively short period time, more than 20 craft brewers and brewing companies have joined the scene, mostly in Ho Chi Minh City, such as Heart of Darkness, Platinum, BiaCraft, Winking Seal, Fuzzy Logic, and East West, as people in the southern city are quite open and adaptable.
Hanoi, meanwhile, also has a few craft brewers such as Furbrew, Barett, and the latest, Ibiero, which was launched just four months ago.
The majority of craft brewers are pleased with their initial results and surprised by the willingness of Vietnamese consumers to try their brews. “Results have been great!” Pasteur Street Brewery’s Account Manager Mischa Smith told VET.
“There have been nights when my boss and I have been the only foreigners at our place, with everyone else being Vietnamese! This is the kind of growth we love to see.”
After a year in the business, Heart of Darkness has seen its business grow significantly every month, with a steady shift from an expat customer base to a nice mix of expats and Vietnamese. “We are at about at 60/40 right now, Vietnamese to expats,” said founder Mr. John Pemberton. “We’d like to get to a 70/30 mix.”
After five months, the owner of Ibiero is also quite happy, as nearly 80 per cent of customers are Vietnamese. “We have many Vietnamese customers who keep coming back,” Chairman Do Giang Vinh said. Surprisingly, more than 30 per cent of its customers are women, while about 35 per cent are return customers.
At the East West Brewing Company, the ratio of Vietnamese customers is about the same as at Ibiero. CEO Loc Truong expected its customer base would be mainly expats and foreign tourists but he’s been proven happily wrong. A 375-ml glass sells for about VND100,000 ($4.3), or twice the price of an imported beer and five-times the price of local and regional brews. “At such a price, craft beer truly is premium so will find favor in big cities like Hanoi and Ho Chi Minh City,” Mr. Loc said.
Despite its high price, it seems a lot of Vietnamese customers are attracted by craft beer’s uniqueness. “Craft beer doesn’t have preservatives, and ingredients are mostly imported from Europe,” Mr. Vinh said. “It must be kept at a suitable temperature, so the flavor and quality only last about three months. Making craft beer is not easy, and it’s difficult to produce flavors that prove popular among a large number of drinkers.”
Its diverse flavors have, however, proven popular among drinkers. “We wanted our Vietnamese customers to see the difference, by building a micro-brewery inside the restaurant,” Mr. Loc said.
“We hope to change the drinking culture, from one based on volume to one based on enjoyment.” This is truly the challenge facing craft brewers in Vietnam.
Generally speaking, craft brewers have two customer targets: Vietnamese customers keen on something different, and expats missing the type of beer they know from home.
From its early days, Heart of Darkness has had a vision of setting up a Western style craft brewery in both style, beer, and food, that would not be out place in the US or Europe. “People thought we were crazy, and many other breweries dumbed down their range to suit Vietnamese tastes,” said Mr. Pemberton.
“We refused to do that. We changed our hop content to keep the bitterness down but introduced the wonderful world of hop flavors to customers. Once people start to understand the beauty of a good hop and malt profile, it doesn’t take long before they start to explore and expand their knowledge of craft beer.”
Ibeiro, meanwhile, has identified Vietnamese customers as its target, producing craft beer will little in the way of bitterness. Despite differences in strategy, the brewers believe that Vietnamese people are cultivated in their tastes and always looking for something new and different to try.
“We see proof of this in both our success and that of other food and beverage establishments that are mainly foreign-owned but produce amazing, Vietnamese-made concepts, like Marou Chocolate, Pizza 4P, and Quan Ut Ut,” said Mr. Smith.
Prospects for expansion
No exact figures exist on craft beer consumption at this time, though some say it may have accounted for 0.001 per cent of total beer consumption of 3.8 billion liters in 2016. Mr. Loc believes its share will rise to 0.3 per cent within the next three years, or the same as the current share held by imported European beer.
Though a small percentage, Vietnam is one of the leading beer consuming countries in the world per capita.
“Vietnamese love their beer,” Mr. Pemberton said. “It’s deeply engrained in the culture, making Vietnam a leading consumer in Southeast Asia and third in all of Asia. Putting these things together, and with the economic growth that Vietnam is currently enjoying and the greater number of people in the middle and upper classes with disposable income and a love for going out, and we believe the timing is right for craft beer in Vietnam.”
Of a similar mind, Furbrew’s owner Thomas Bilgram is confident enough to say that Vietnam’s craft beer industry is about to take off big-time. “Like all craft markets, it takes time to build momentum but it will happen quickly in Vietnam,” said Mr. Pemberton.
“Craft beer is all about exciting flavors, and this is something that Vietnam has in its food and culture already. I have a strong belief that craft beer will take off in the country.”
The craft brewing community has also gradually expanded over the last two years. Ibiero plans to open craft beer chains in the four major cities of Hanoi, Ho Chi Minh City, Da Nang and Nha Trang. Heart of Darkness, meanwhile, has always planned to expand across Asia. It has launched in Thailand to an amazing reception, with next being Singapore, in late October, then Hong Kong and New Zealand.
“Within our first year, we will be serving our beers in five countries,” said Mr. Pemberton.
The biggest brewer, Pasteur Street, distributes its craft beer to more than 170 outlets in Ho Chi Minh City, Nha Trang, Da Nang, Hoi An, Mui Ne, and Vung Tau, and will add Phu Quoc Island to the list shortly. As for exports, “we are looking at all major markets where we aren’t yet to find a strong local distributor who we can work with,” said Mr. Smith.
With a maximum capacity of 20,000 liters per month, East West’s plans for expansion will be implemented in the near future. To expand and reach more customers, two to four new flavors are being created at the brewery every month. Many are made from Vietnamese-grown materials, such as cocoa, black pepper, lemongrass, ginger, Da Lat coffee, durian, lime, jaggery, and green rice. “Craft brewers make efforts all the time to create new and unique flavors,” Mr. Vinh said.
Craft beer requires a passion and love for beer among brewers. They have a good relationship with each other, according to Mr. Vinh, and are open to sharing information on brewing. Competition exists, but at the moment it makes sense to view bolstering the popularity of craft beer as a shared goal. “Our craft brewers have a very tight-knit scene,” said Mr. Pemberton.
“The breweries work together, play together, and have built a lot of buzz and excitement around the scene, which makes people curious.”
As the brewers say, the true reward in the business is sharing the passion for craft beer and seeing others become equally passionate.
The Ho Chi Minh City People’s Committee has asked relevant departments to tackle problems in granting house ownership certificates to overseas Vietnamese to encourage their investment into the real estate market.
Statistics of the municipal Department of Construction revealed that only 15 overseas Vietnamese and foreigners were granted house ownership certificates in the city during the past two years.
The figure was too modest compared to the number of overseas Vietnamese and foreigners who lived and worked in HCM City, the department said.
Experts said that this was caused by complicated procedures, as well as slow progress in identifying areas and projects, which cannot be sold to foreigners.
Tran Hoa Phuong, Deputy Chairman of the HCM City Overseas Vietnamese Committee, said that the most difficult procedure was still in identity confirmation.
The confirmation of identity for overseas Vietnamese was jointly conducted by the Vietnamese embassies, the State Committee for Overseas Vietnamese Affairs and provincial/municipal judicial departments of foreign countries, Phuong said. He added that the money transfer from foreign countries to Vietnam also needed to be in compliance with the laws.
Expert Nguyen Tri Hieu said the regulations must be more open while the promotion of projects, which can be owned by foreigners, must be enhanced.
Deputy Chairman of the municipal People’s Committee Tran Vinh Tuyen said in a document sent to relevant departments urged them to speed up the identification of areas which cannot be owned by foreigners, to ensure national security.
The Department of Construction must clarify the list of commercial housing projects, which cannot be sold to foreigners and make it public on the department’s e-portal, he said.
The legal framework for the Department of Natural Resources and Environment to grant ownership certificates to overseas Vietnamese and foreigners must also be improved, he added.
Statistics of the HCM City Real Estate Association revealed that around 22 percent of remittances into the southern city flew into real estate.
In the first nine months of this year, HCM City attracted more than 3.3 billion USD worth of remittances, up 6 percent over the same period last year.
