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VIETNAM BUSINESS NEWS NOVEMBER 28

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November CPI up 0.32 percent

The Consumer Price Index (CPI) in November was up by 0.32 percent compared to October, according to the General Statistics Office (GSO).

It was driven by the hikes of prices of petrol and gas across the globe, as well as consumer goods and services in localities in the new normal.

Among 11 groups of main commodities and services, nine experienced rising prices.

In the first 11 months, the CPI went up 1.84 percent compared to the same period last year, the lowest level since 2016, attributed to the fuel price hikes by 30.32 percent year-on-year, after 20 adjustments.

Housing and construction materials posted a year-on-year expansion of 6.8 percent and education grew 2.44 percent.

Meanwhile, foodstuff inched down 0.52 percent and electricity prices dropped 1.06 percent against the same period last year.

As COVID-19 prompted travel restrictions, air ticket prices fell 21.39 percent while travel package slipped 2.42 percent.

Core inflation in November increased 0.11 percent, up 0.58 percent compared to a year ago, the GSO said. The figure saw a year-on-year rise of 0.82 percent in 11 months.

December CPI is forecast to marginally rise and the yearly average will be about 2 percent, much lower than the set target of 4 percent./.

Fruitful territory for bond issuance

Banks are showing strong desire in bond issuance activities, while real estate developers have lowered the extent of their bond-related capital mobilisation efforts.

Fruitful territory for bond issuance

In the first 10 months of 2021, commercial banks continued to be the main contributor for the total corporate bond issued value, recorded at $5.73 billion. In which, tier 2 capital-raising bonds accounted for nearly 25 per cent, according to KIS Securities.

In particular, some banks issued bonds with a duration of under five years, including ACB, VPBank, OCB, LienVietPostBank, SHB, TPBank, and VPBank, whilst BIDV and VietinBank have longer-term bonds over five years.

The property sector ranked second, recording 35 per cent of issued corporate bond total value in the first nine months of 2021. However, this sector is the leader in terms of bond rate at an average of 8 per cent annually and a short duration averaged at three years. Some active issuers include Novaland, Vinhomes, Phat Dat Real Estate, Nam Long Group, and Dat Xanh Group. Notably, 15 per cent of real estate corporate bonds were unsecured or secured by common shares.

In the first 10 months of the year, there were three issuances on the international market – Vingroup at $500 million, convertible bonds of Novaland at $300 million, and green bonds from BIM Real Estate JSC at $200 million.

“Investors could find more investment opportunities across the real estate sector when the issued bonds have a rate ranging from 8-13 per cent annually, especially with short duration. However, investors need to be aware of bonds which are unsecured or secured by common shares,” said KIS Securities. “We expect that bonds will keep being a major instrument for mobilising capital as banks continue to focus on short-term lending, whilst there is high business demand (especially real estate firms) for mid- and long-term lending.”

The sustained growth momentum since 2017 demonstrates the importance and attractiveness of the capital mobilisation route via corporate bonds. In the first nine months of 2021, the total issuance value of corporate bonds climbed by 27 per cent over the same period the previous year. This is a slower pace of increase than the 30-40 per cent seen in the previous three years.

According to data provider FiinGroup, this growth rate reflects two main factors – the huge demand for medium and long-term capital issuance due to the pandemic, and spillover effects of new regulations aimed at stricter control of bond issuance, especially public offerings.

The biggest policy change, specifically, is the regulation that private placement bonds, besides being sold to institutional investors, can only be purchased by professional individual investors with specific conditions.

According to recent moves from the Ministry of Finance on strengthening the management of the corporate bond market, private placement of corporate bonds without collateral or with a low reputation of the issuer will be watched under strict monitoring and surveillance.

Circular No.16/2021/TT-NHNN, dated November 10, contains the notable provision that credit institutions are only permitted to buy corporate bonds if their bad debt ratio is less than 3 per cent based on the latest classification period. Credit institutions are forbidden to obtain corporate bonds issued with the intent of settling the issuing firms’ debts, and prohibited from purchasing corporate bonds issued for the purpose of raising capital or acquiring shares in other businesses.

In compliance with the State Bank of Vietnam’s requirements, domestic commercial banks enhance their use of bond channels to raise tier 2 capital and improve the ratio of short-term capital to medium- and long-term loans.

Corporate bond issuance continues to offer numerous benefits in a low-interest-rate environment in Vietnam, but an updated legal framework has exerted significant influence on the intensity and scope of issuance activity.

Decrees No.153/2020/ND-CP and No.155/2020/ND-CP, which took effect on January 1, define the prerequisites for bond issuance. New restrictions aimed at improving and standardising issuing circumstances, as well as restricting participation to professional investors, have resulted in considerable delays in issuance.

Prior to the implementation of Decree No.81/2020/ND-CP amending and supplementing several articles related to corporate bond issuance on September 1, 2020, the total value of bonds issued in August 2020 reached $4.5 billion), accounting for 25 per cent of total issuance value in that year, and then plummeted to $956.5 million the following month.

Individual investors’ engagement in the primary market has reduced dramatically since only professional individual investors are permitted to participate in a private placement. Nevertheless, securities corporation participation has increased.

In the first nine months of this year, institutional investors, mainly commercial banks, have been the most active participants with 55.9 per cent purchase value of the total issuance value, although their proportion had decreased relative to securities companies. The proportion of individual investors in the primary market has decreased significantly compared to 2020, from 13 to 5.3 per cent. 

Binh Phuoc posts 1.2-billion-USD trade surplus 

The southern province of Binh Phuoc enjoyed a trade surplus of 1.2 billion USD in the first 11 months of 2021, according to the provincial Department of Statistics.

The department reported that the locality has recorded an impressive growth of export turnover, reaching an estimated 3.5 billion USD in the reviewed period, up 32.6 percent over the same period last year, and 14.3 percent higher than the plan set for 2021.

Meanwhile, its import turnover totalled nearly 2.3 billion USD, up 44.8 percent year-on-year and 34.8 percent higher than the 2021 plan.

Binh Phuoc’s industrial production index surged by 16.3 percent compared to the same period in 2020, of which the processing and manufacturing industry; the production and distribution of electricity, gas, hot water and steam, and air conditioners; and the industry of water supply, waste and wastewater management and treatment witnessed respective surges of 17.1 percent, 11.6 percent and 6.5 percent.

A number of second-level industries that had recorded high growth indexes included the production of paper and paper products (up 53 percent), food production and processing (up over 29 percent), and motor vehicle production (up nearly 26 percent)./.

Two tonnes of Vietnamese frozen passion fruit marketed in Australia

The Vietnamese Embassy and Vietnam Trade Office in Australia have launched a programme marketing two tonnes of Vietnamese whole frozen passion fruit products in a bid to increase the share of the fruit in the market.

According to the trade office, Australia produces more than 4,700 tonnes of passion fruit per year. Notably, 91 percent of passion fruit grown in Australia is marketed as fruit. Meanwhile, Vietnam’s passion fruit exported to the country is mostly in form of frozen pulp, making the products being little known among local consumers. Persuaded by the office, Vietnam’s Uu Dam company decided to ship 2 tonnes of the whole frozen fruit to Australia.

Vietnamese Ambassador to Australia Nguyen Tat Thanh stated the export of the whole fruit is meaningful as Vietnam is negotiating for its fresh passion fruit to enter Australia.

According to the programme, when the batch arrives in Australia for distribution in December, local consumers buying them will have chance to win prizes of 2000 AUD sponsored by Viet Uc Group and three return air tickets from Vietjet Air.

Australia has to date allowed the import of four fresh fruits from Vietnam. Despite COVID-19, in the first ten months of 2021, Vietnam’s export of fruit and vegetables to the market increased by 27.65 percent./.

Measures sought to bolster private investment in infrastructure, public services

Stronger engagement of ministries, sectors and localities and more comprehensive relevant policies are needed to bolster private investment in infrastructure and public services, said Tran Hao Hung, Director of the Ministry of Planning and Investment (MPI)’s Public Procurement Agency.

Though a legal framework on investment in the form of public-private partnership (PPP) has been fundamentally completed, there remained limitations in attracting investment in road transport infrastructure for projects and mobilising loans is among the biggest challenges, along with bottlenecks in relevant policies regarding tax, land, State budget and management and use of public assets, among others, he said.

Preparations for the projects are time consuming given that a long period is needed for financial feasibility studies and efficient distribution of State resources, Hung said.

Relevant policies in the coming time must be suitable for objectives and characteristics of PPP projects in specific fields to draw the private sector, together with an attractive investment climate, stable macro-economy, better sovereign credit rating and quality of planning, and more, according to the official.

Due attention should be paid to investment promotions among investors at home and abroad and solutions are necessary to access capital sources with low-interest rates and long maturity.

Authorised agencies are advised to work closely with investors to address bottlenecks, so as to consolidate their trust when participating in new projects./.

National domain name ‘.vn’ helps develop local farm produce brands

The fourth COVID-19 outbreak has severely affected Vietnamese trade. However, many businesses in the country have taken advantage of this difficult time to make a transition from traditional business to that in the digital environment.

Grasping the need for digital transformation, the Vietnam Internet Network Information Centre (VNNIC) has coordinated with domain name registrars, and local Departments of Information and Communications to support individuals and businesses in branding, and promoting agricultural products on websites with the domain name ‘.vn’.

The Mekong Delta province of Dong Thap is the first locality in the country to coordinate with VNNIC and the domain name registrar iNET to carry out a programme on effective online business model transformation with digital services using the national domain name ‘.vn’. Therefore, dozens of typical products of Dong Thap appear on the Internet through websites with this national domain name. After Dong Thap, Vinh Long, Hau Giang and Lam Dong provinces have implemented a programme to put Vietnamese agricultural product brands on websites with the domain name ‘.vn’.

Nguyen Hong Thang, VNNIC Director, affirmed that transiting from traditional business to online business is an inevitable trend. The presence of brand names on the Internet with the Vietnamese national domain name ‘.vn’ and digital services is the key to helping local businesses and business households build brands for products and services and develop their online business in in a professional, sustainable, reliable manner.

Vietnam’s national domain name ‘.vn’ is listed among 10 country-code domain names with the largest number of registered users in the Asia-Pacific region, and ranked 44th globally.

By the end of November, over 544,200 Internet addresses had been registered with Vietnam’s top-level domain (TLD) ‘.vn’, up 5 percent year-on-year./.

Vietnam urged to improve policies for effective implementation of EVFTA

Improving the policy system and legal framework based on international trade practice is one of the important factors for Vietnam to integrate more deeply into the global value chains and attract investment capital from Europe as well as create a level playing field for domestic and foreign enterprises, Ambassador Giorgio Aliberti, Head of the European Union Delegation to Vietnam, has said.

Up to 35 percent of European business leaders see administrative procedures as a barrier in the implementation of the European Union – Vietnam Free Trade Agreement (EVFTA), according to the 2021 White Book released recently by the European Chamber of Commerce (EuroCham) in Vietnam.

Aliberti said that there is great investment potential from the European Union, especially in high-value sectors.

EuroCham is committed to supporting the Vietnamese Government in setting up a sustainable development roadmap to bring better investment opportunities in the future for the business communities of the two sides, he added.

In early 2021, European business leaders made a positive and optimistic assessment about Vietnam’s trade and investment environment. The Business Climate Index (BCI) of Vietnam reached 73.9 points in the first quarter of this year, the highest score recorded since the third quarter of 2019, before the COVID-19 pandemic hit global trade and investment.

However, the fourth wave of COVID-19 infections in many provinces and cities across the country caused the BCI to drop by nearly 30 points in the second quarter of this year to only 45.8 points.

According to Aliberti, the outbreak of the pandemic led to certain disruptions during the social distancing period in Vietnam and other countries in the region. However, Vietnam has made remarkable reforms to implement the EVFTA such as its efforts related to certification of origin and geographical indications with very specific improvements, he said, adding that this is a very important starting point.

The official said the EU and Vietnam will witness the opening of their markets along with tariff reductions, opening a new wave of trade for the business communities of the two sides in the future. If the two sides cooperate to solve difficulties, the post-pandemic recovery will quickly achieve desirable results, towards a brighter and more prosperous future in the relationship between Vietnam and the EU, he said./.

First wind power plant in Ben Tre put into operation

V1-3 Ben Tre wind power plant, the first of its kind in the Mekong Delta province of Ben Tre, was put into operation on November 28.

Construction of the 7-turbine wind power plant began in April 2020 with a total investment of 1.5 trillion VND (over 66.1 million USD). It has a capacity of 30MW.

The plant is expected to generate an average output of 90 million kWh per year, and annually contribute 20 billion VND (over 882,000 USD) to the State budget in the first 14 years of its operation.

Speaking at the inauguration ceremony, Chairman of the provincial People’s Committee Tran Ngoc Tam said the operation of the plant contributes to concretising the province’s goal of maritime economic development, including the development of clean energy, thus helping promote its socio-economic development.

He praised the investor, local authorities and sectors for their efforts and support for the project, while asking the provincial Department of Industry and Trade to coordinate with relevant agencies to remove difficulties and obstacles to speed up construction of other wind power plants in Ben Tre.

According to the provincial Department of Industry and Trade, in the period 2015-2020, Ben Tre province was approved by the Ministry of Industry and Trade to develop wind power projects with a total capacity of more than 1,000 MW.

Currently, 19 wind power projects are being implemented in the province. In 2022 and the following years, 17 other projects will be developed with a total capacity of more than 914 MW.

In addition, Ben Tre has proposed to add 26 projects with a total capacity of 6,400 MW. By 2025, power projects in the province are expected to generate an average power output of over 4.5 billion kWh with a total revenue of more than 10 trillion VND per year./.

Dak Nong solicits investment in a range of sectors

The Central Highlands province of Dak Nong is seeking local and foreign investments in many sectors like high-tech agriculture, mining, renewable energy, and tourism, and will offer the most favourable investment terms and cooperate with investors, its leader has said.

Ho Van Muoi, its People’s Committee chairman, said the province has identified three main sectors to develop its economy, namely industry, high-tech agriculture and tourism.

Besides, with its rich mineral resources and great potential for solar energy, it wants to connect with domestic and foreign investors in those sectors, he said.

Viet Nam’s bauxite reserves rank among the top three in the world, and Dak Nong accounts for 60 per cent of the country’s reserves, he said.

The province gets a lot of sunshine, with heat radiation estimated to be equivalent to Ninh Thuan and Binh Thuan provinces, and has a large water surface area which too offers great solar power potential.

It has 650,000ha of fertile lands and a mild climate suitable for agriculture, especially industrial crops and fruit trees.

It also has great tourism potential, thanks to its beautiful landscapes and rich ethnic culture, including the Dak Nong Geopark, designated as a UNESCO geopark, and the Ta Dung National Park on a combined area of 25,000ha and considered the ‘Ha Long Bay of South-Central Viet Nam.’

But despite all this potential, foreign investment remains modest, and there are only seven projects, Muoi said.

The province has regularly participated in or organised programmes and seminars to introduce its potential and advantages and solicit investment, he said.

“The province is always ready to create all conditions to support investors.”

Deputy Prime Minister Pham Binh Minh earlier this month signed a decision to promulgate a national list of projects soliciting foreign investment in 2021-25, with the province having five of them.

They include the US$715 million Chon Thanh (Binh Phuoc) – Dak Nong railway, the $43 million grade II logistics centre (Dak R’lap), a $740 million wind power plant project (Tuy Duc), a $520 million solar power project (Krong No) and a $20 million plant for producing renewable energy equipment.

The province itself has a list of nearly 100 projects in the period, 40 in commerce, tourism and urban infrastructure, 20 in agriculture and rural development, and 19 in manufacturing and industrial infrastructure.

Located at the south-western gateway of the Central Highlands, Dak Nong is a trade hub straddling the region and the southern key economic region.

It is located at an average altitude of 600-800m above sea level and has a tropical monsoon highland climate with distinct seasons.

It has a diverse and rich terrain comprising high mountains and plateaus and valleys between them. 

Many industries make rapid recovery in production, exports in October

After a decline in output and exports in the second and third quarters due to the COVID-19 pandemic, many industries have seen a rebound in exports and strong growth since October.

Trung An Hi-tech Agriculture Joint Stock Company in Can Tho City said it has signed a contract to export 15,000 tonnes of rice to South Korea.

The company has opened a representative office in Hamburg, Germany, to exploit the EU market since the import tariffs on Vietnamese rice have been reduced under the EU-Viet Nam Free Trade Agreement (EVFTA), Pham Thai Binh, its general director, said.

Deputy Minister of Industry and Trade Dang Hoang An said the EVFTA would help Viet Nam participate in the process of restructuring supply chains with EU partners.

After a long period of production suspension or reduction in output, seafood processing companies are recovering, but cannot keep up with export demand as orders keep coming.

The Minh Phu Seafood Corporation has been active again since October with its three processing plants with a capacity of 18,000 tonnes a year each and a packaging plant with a capacity of 5,000 tonnes.

In the third quarter, the company’s revenues fell by 36.7 per cent year-on-year to VND2.78 trillion despite a sharp rise in export prices as demand surged in major markets.

Le Van Diep, its deputy general director, said that the fourth outbreak of the coronavirus, with the Delta variant spreading in the south, disrupted supply chains, including in the shrimp industry.

Shrimp processing plants in the Mekong Delta had to house their workers and comply with other restrictions, which reduced their capacity by 30-70 per cent, meaning they could not fulfill customers’ orders, leading to a decrease in revenues, he added.

The Viet Nam Association of Seafood Exporters and Producers said after declining for two consecutive months, the country’s seafood exports rose by 47 per cent in October to US$918 million.

In the first nine months, they rose by 2.4 per cent year-on-year to $7.1 billion.

Do Xuan Lap, chairman of the Viet Nam Timber and Forest Products Association, said the recovery by businesses supplying wood products has been faster than predicted.

In the first 10 months of the year, exports of wood and wood products jumped by 23.4 per cent year-on-year to nearly $12 billion, he said.

Now that the pandemic is being controlled gradually, wood processing hubs such as HCM City and Binh Duong, Dong Nai and Tay Ninh provinces are recovering rapidly, he said.

“This is a very positive sign for the industry.”

According to the Ministry of Agriculture and Rural Development, exports of agricultural, forestry and fishery products in October were worth $3.4 billion, up 4.2 per cent from September.

Exports for the year were worth $38.75 billion, up 13.1 per cent, it said.

If this pace is maintained in the remaining two months of 2021, the export target of $44 billion is completely feasible, it added.

Information security for businesses in tax management a concern

The Viet Nam Chamber of Commerce and Industry (VCCI) proposed the Ministry of Finance finalise a draft circular on tax.

The circular would amend and supplement Circular 40/2021/TT-BTC on value-added tax, income tax and tax management for business households and individuals; in which, there are parts on information security provided by enterprises.

Currently, data is considered one of the most valuable assets for businesses; especially those that do business on the basis of the digital economy such as e-commerce platforms.

The security of information and data is very important to businesses. Leaking information will cause great losses to e-commerce platforms, especially if competitors can capture this data.

When participating in e-commerce or declaring taxes, businesses are required to provide information, which causes concerns over information security mechanisms against hackers; or internal data management mechanisms to avoid information being stolen.

VCCI recommends tax authorities take measures to upgrade the security of information systems to ensure safety against cyber attacks.

At the same time, the Ministry of Finance considers supplementing regulations on error identification mechanisms when detecting cases of data leakage.

In fact, all businesses have internal mechanisms and processes for data management. Similarly, the agency drafts additional regulations for the tax authority to supplement internal regulations on information and data management and requires decentralisation of the information system; in which, there are regulations on information access authorisation, requiring logins and a database of login times.

COVID severely impacts stock markets in Southeast Asia including VN: conference

Stock markets in Southeast Asia including Viet Nam have been severely impacted by the COVID-19 pandemic outbreak, according to studies presented at the annual Conference on Business, Economics & Resources held from November 25 to 26.

Pham Tan Toan of Macquarie University, Australia, said his team’s research found the Philippine and Thai stock markets exhibiting the most volatility.

“We also found that the … outbreak had substantially increased the volatility in all six ASEAN markets.

“Volatility … more than doubled in comparison to the pre-pandemic period.

The research studied six stock markets, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam.

Another study on the impact of the pandemic on stock market volatility through the four outbreaks in Viet Nam done by Vu Thanh Nam and Thai Trieu Vi of the International School of Business under the University of Economics HCM City found that the official announcement of the pandemic during the first three outbreaks adversely affected stock market returns.

The effect was slightly less following the announcement of the fourth wave.

“Construction, real estate and manufacturing stocks were the most affected while information and technology, and financial and insurance services were the most resilient across the four waves of the pandemic.”

Le Thai Thuong Quan of the Ho Chi Minh City Open University, said his research team’s findings indicate that after the COVID-19 breakpoints, the volatility across industries increased by 97 per cent.

“The first and second waves … negatively affected many industries while the fourth wave has only impacted a few industries.

“Transportation, commerce and manufacturing experienced the most significant volatility because their variances are double after the COVID-19 breakpoints.

“Our empirical results confirm that the increase in the daily infection cases appears to amplify the volatility while easing … control measures tend to reduce the volatility at the industry level and for the entire stock market.”

Data from the stock market has been used to examine the effects of government responses and policies.

Do Thanh Trung of Military Bank in HCM City said: “Our findings indicate that the Government responses and economic support are associated with an increase in the order imbalance or an increase in buying. Risks from easing the stringency of policies lead to selling pressure.

“We find that buying is more likely associated with workplace closing, restrictions on gatherings and public transport ban than stay-at-home mandates.”

The conference was organized by the Research Centre in Business, Economics, and Resources at the HCM City Open University, and 48 researches were tabled by local and foreign scholars from Australia, Canada, New Zealand, the UK, the US, and others.

Discussion sessions shared research experiences and considered policy implications for important issues for an emerging market like Viet Nam.

The conference series aimed to provide opportunities for young Vietnamese scholars to present and receive constructive feedback to enhance their research skills and enable their papers to be published in top international journals. 

Top 500 most profitable companies in Viet Nam announced

Vietnam Report and online newspaper Vietnamnet yesterday announced the list of Top 500 most profitable companies in Viet Nam in 2021 (PROFIT500) and Top 10 most prestigious companies in the food – beverage – retail sector.

The fourth wave of the COVID-19 pandemic has changed all forecasts and is a “test” for the economy. In the new context, for businesses, profit is not enough, but it must be sustainable profit based on strong internal capacity, flexibility to adapt to the market, and quick application of technology, enhancing e-commerce, digital payments and work-from-home capabilities. They also need to reorganise supply chains and focus more on the domestic market. In addition, building brand reputation – an “intangible asset” associated with intrinsic strength would help the Vietnamese business community step by step overcome the pandemic and firmly restore production and business activities.

According to statistics of Vietnam Report, out of 339 listed companies in the PROFIT500 Ranking in 2021, 53.1 per cent of enterprises still maintained their profit growth momentum during the 2019 – 2020 period and in the first half of the year. In the January-June period, 24.4 per cent of businesses started to recover and regain profit growth. This was a positive sign that companies listed in PROFIT500 are gradually adapting to the changing business conditions during the pandemic.

The ranking this year aims to honour businesses that not only demonstrate financial and communication strength, but also growth potential, sustainable development, quality of management and position in the market.

At the event, Vietnam Report also introduced the report “Viet Nam Earnings Insight 2021” with the topic “Profit trends by economic sector in the 2021-22 period”. In addition to some comments on the situation and quality of profit growth caused by the pandemic, the report also analyses the trends and prospects of industries that are likely to accelerate in the new normal period. It also analyses risks and strategic solutions to help businesses better visualise value chain recovery plans, build images, strengthen their foothold in the market, thereby achieving profit growth targets. 

Year-end shopping season begins

Shopping malls and stores have begun the year-end shopping season with promotions offering discounts of up to 80 per cent.

Opening the season is Black Friday, which originated in the US but has become a popular shopping event in Viet Nam in recent years.

Leading shopping centres in HCM City like Vincom and Takashimaya have announced discounts of up to 75 per cent on many items such as home appliances, fashion, watches, shoes and bags from local and international brands.

Many local brands like Cocosin, OLV and Edini, which offer popular ready-to-wear designs for women including ao dai (Vietnamese traditional tunic), offer discounts of up to 50 per cent on all items.

However, though Black Friday is possibly the biggest promotion event of the year, people are hesitant to shop.

The owner of a clothing store in District 3 said she expected to earn big profits on the occasion, but found that people had tightened their spending due to the pandemic and only bought what they needed.

Nguyen Phuong Nguyen of District 2 said: “I hope to buy some new clothes for Tet (Lunar New Year), but most of the discounted items are old fashioned and from previous seasons. New clothes have no discount. So I just bought some accessories I needed.”

Besides, online shopping has become hugely popular with many people hunting for bargains on e-commerce websites like Lazada, Tiki and Shopee.

Customers can find attractive deals on international brands even at places like ACFC, Maison and Takashimaya.

Electronic stores like Dien May Xanh and Nguyen Kim are offering discounts of up to 50 per cent on home appliances, cell phones and laptops.

Besides, the HCM City Department of Industry and Trade has launched a shopping promotion programme called ‘Shopping Season 2021’ to promote year-end consumption and shopping.

It has worked with leading supermarket chains and businesses to offer big discounts on food, clothes, essential items, and other goods. 

Vietnamese women entrepreneurs awarded prizes for planning for success

Forty women entrepreneurs won prizes in the competition “Women entrepreneurs planning for success” funded by the Netherlands Government and implemented by Vietnam Trade Promotion Agency (Vietrade) and the Netherlands Embassy in Ha Noi on Thursday.

The competition is one of the activities of the project “Enhancing the capacity for women entrepreneurs to own in the digital economy” (e-SWB Vietnam) funded by the Netherlands Government. More than 600 women entrepreneurs participated in the training sessions under the framework of e-SWB Vietnam and 60 business plans were submitted to the competition.

Nguyen Thi Huyen from Simple Decor JSC won the best business plan on creating a sustainable ecosystem of handicraft products based on digital transformation. Thirty-nine other business plans from enterprises won second, third and encouragement prizes.

Speaking at the award ceremony, Deputy Minister of Industry and Trade Do Thang Hai said women and women business leaders continued to play a pivotal role in socio-economic development. In dire circumstances of the pandemic, numerous women-owned businesses still developed with the help of this programme, being a great inspiration for the young generation and start-ups.

The Ambassador of the Kingdom of the Netherlands to Viet Nam Elsbeth Akkerman highlighted that trade, investment and gender equality are key to job creation, economic growth and sustainable development.

“Women are half of the world’s population and should therefore be equally represented in the business world. But that is however not the case… yet. We should all be aware of that. And we should all do everything we can to change that,” the ambassador said.

The event also witnessed the signing ceremony of the Memorandum of Understanding on the establishment of the SheTrades Office in Viet Nam between the International Trade Center (ITC) from Geneva and Vietrade from Ha Noi. Shetrades Office in Viet Nam is expected to make an important contribution to support Vietnamese businesswomen to start or expand their businesses, as well as to access international markets. 

New project supports exports of quality black pepper to the EU

The Plant Protection Department (PPD) under the Ministry of Agriculture and Rural Development, Vietnam Pepper Association (VPA) and the IDH Stitching Sustainable Trade Initiative (IDH) on Thursday introduced a programme supporting exports of quality black pepper from Viet Nam to the EU.

The “Scaling sustainable production and trade of Vietnamese pepper” project, co-financed by the European Union (EU) and IDH, is under the framework of the ARISE Plus initiative aimed at supporting the Vietnamese Government to benefit from bilateral trade agreements and promote the export of high-quality products and services from Viet Nam to the EU.

Viet Nam is the world’s largest producer and exporter of black pepper (Piper nigrum) accounting for 60 per cent of the world’s trade and roughly 45 per cent of the pepper imports into the EU.

The EU-Viet Nam Free Trade Agreement (EVFTA) which entered into force on August 1, 2020 has already generated significant opportunities for Vietnamese companies in pepper production, processing, and trade. However, certain challenges exist, such as meeting strict quality requirements, especially limiting residues of toxic chemicals.

The project is designed to build a sustainable supply chain connecting smallholder farmers with producer or trader SMEs and EU buyers. Project activities include training, raising farmers’ awareness, companies’ support in training and supervising the application of sustainable farming practices, in parallel with the efforts of responsible agrochemical management of State agencies.

The project will contribute to an increase in the volume of sustainably grown peppercorns and ensure stable incomes for pepper farmers.

At the workshop, PPD’s deputy director Nguyen Quy Duong said: “It is high time that the Vietnamese pepper industry shifted from quantity production to quality production and to improve the production system for better quality pepper while helping farmers with a sustainable income.

“EU’s support to this project is of high importance and at the right time, playing a vital role in bridging domestic and European companies to jointly meet common targets for sustainable pepper development.”

Matthieu Penot, Attache for Trade Cooperation at the EU Delegation to Viet Nam, said the EU would support the pepper supply chain and would contribute to sustainable growth in the sector.

“Our objective is to improve the lives of 10,000 pepper smallholder farmers in the Central Highlands and increase the productivity of pepper processors. Viet Nam provides almost half of European pepper for consumption. It is only natural that the EU and its member states invest heavily in the pepper supply chain for a stronger Europe-PPD’s deputy director partnership,” Penot said. 

Time for securities firms to raise charter capital

Many securities companies are planning to raise capital through forms such as dividend payment, purchase rights and private offerings to meet the growth of the stock market.

The Board of Directors of SSI Securities Corporation (SSI) has just issued a resolution to submit to the General Meeting of Shareholders a plan to increase charter capital to nearly VND15 trillion (US$661.4 million) through share offerings to existing shareholders.

Accordingly, the securities firm plans to offer about 497.4 million new shares to existing shareholders, with a ratio of 2:1 and offering price of VND15,000 per share. The total offering value at maximum par value is approximately VND4.97 trillion. Existing shareholders have the right to transfer their rights to buy shares to others within a specified time.

In September, SSI issued nearly 218.3 million shares to increase capital from owner’s equity and offered more than 109.55 million shares to existing shareholders. Thereby, the company’s charter capital rose to nearly VND9.85 trillion.

With the new resolution, if the issuance is completed, its charter capital will reach nearly VND15 trillion, continuing to maintain SSI’s position as the largest securities company in Viet Nam.

A representative of SSI said that the rise in charter capital is to supplement business capital, improve underwriting capacity, investment capacity and margin lending capacity. During the time when there are no margin lending transactions, the money will be used to invest in bonds and certificates of deposit to ensure efficient use of capital.

Also during the period, Yuanta Securities Vietnam Company Limited (YSVN) has just been approved by the State Securities Commission (SSC) to increase its charter capital from VND1.5 trillion to VND2 trillion.

Nguyen Thanh Tung, general director of YSVN, said that higher charter capital will help YSVN increase its capacity to provide more margin loans. It will also increase investment in technology, upgrade systems, improve processes, hire more employees, conduct domestic and foreign training and develop new products to bring the best experience to customers.

The document expected to be submitted to the 2021 Extraordinary General Meeting of Shareholders next month of VNDirect Securities Corporation also said that its Board of Directors will submit to the General Meeting of Shareholders for approval an offering plan of nearly 435 million shares to existing shareholders with a ratio of 1:1 and the offering price equal to the par value of VND10,000 share.

According to the plan, VNDirect will use 40 per cent of the fund to supplement capital for margin lending activities, while the rest is for investment in valuable papers, underwriting securities activities, supplementing capital for issuance and distribution of covered warrants.

VNDirect’s Board of Directors will also submit a plan to issue nearly 348 million shares to increase capital from equity sources (bonus shares) with the expected rate of 80 per cent, meaning shareholders with 100 shares will be entitled to receive 80 new shares.

With these two issuances, the charter capital of VNDirect can edge to more than VND12 trillion. The execution time is in 2021 or 2022.

Many other securities companies also have significant capital increase plans at this time.

Preliminary statistics showed that more than 30 securities companies have plans to raise capital in 2021, mainly through forms like paying dividends, purchase rights, and private offerings.

YSVN said that the stock market is witnessing a historic boom in both liquidity and trading value, becoming the most wanted investment channel. Just in the first ten months of 2021, there were more than one million new brokerage accounts opened, which was the highest figure in history.

The rapid increase in the number of accounts and positive movements of the market have boosted demand for margin loans.

However, due to tight capital sources and regulations on the ceiling of outstanding loans for the activity, many securities companies have not been able to meet investors’ demand.

Therefore, YSVN believes that these raising charter capital plans are made at the right time, helping companies to increase margin lending, serving the rising capital demand.

Abundant capital will also improve the profit outlook of securities companies.

In the first nine months of this year, income from margin lending, brokerage and proprietary trading of securities companies climbed dramatically compared to the same period last year, helping many securities companies reach their profit plans for the whole year of 2021 three months ahead of scheduled.

Guide on digital transformation for businesses to be published

More than 40 ministries, branches and localities have developed digital transformation projects. However, in the business sector, especially among small and medium enterprises (SMEs) and manufacturing enterprises, this process is not happening as strongly as expected.

This is the motivation for the Viet Nam Software and IT Services Association (VINASA) to take the initiative and implement the development of the Digital Transformation Manual for SMEs and the Digital Transformation Guide for Vietnamese industrial enterprises to provide specific guidance for businesses.

The programme not only helps SMEs and manufacturing enterprises in Viet Nam approach and implement digital transformation methodically and specifically, but also directly connects these businesses with digital technology enterprises.

These digital technology enterprises are typical digital service and solution providers, which contribute to the promotion of the process of digital transformation in businesses, helping businesses quickly recover, and serving as a driving force for the development of the economy.

The Guide of Digital Transformation for SMEs and manufacturing enterprises will be officially announced by VINASA at the Viet Nam Digital Transformation Forum 2021 (Viet Nam DX Summit), the largest digital transformation event in Viet Nam.

Viet Nam DX Summit 2021 will be held from November 30 to December 4, with more than 80 speakers and over 8,000 delegates watching on online platforms.

After that, all the documents will be released publicly and free of charge on each programme’s own website.

The guide documents will be the beginning of a series of professional and specific digital transformation training programmes for businesses.

A VINASA survey at Viet Nam Digital Transformation Day 2020 showed that 69 per cent of surveyed businesses did not know which partner to choose to implement digital transformation, 72 per cent do not know where to start, and 92 per cent do not know how to do digital transformation.

Meanwhile, the General Statistics Office reported that under the impact of the COVID-19 pandemic, Viet Nam had 101,000 businesses shutting down last year.

More than 90,000 businesses stopped doing business, and an average of 10,000 businesses exited the market every month in the first nine months of this year.

The third outbreak in Bac Ninh, Bac Giang, and Hai Duong and the fourth outbreak in the southern provinces caused great damage to manufacturing enterprises in industrial zones.

Businesses most affected are those that have not yet made a drastic change in digital transformation. 

Businesses wary of increasing production for Tet

With the COVID-19 pandemic remaining unpredictable, food and beverage businesses are keeping production at moderate levels and not introducing many new products for Tet (Lunar New Year) unlike other years.

Many believe the current economic crisis will not allow people to spend as much as usual during Tet, and so some food producers are even considering reducing production for Tet by up to 20 per cent year-on-year.

At this time of the year businesses usually expand production to meet surging demand.

Ly Kim Chi, chairwoman of the HCM City Food and Foodstuff Association, said due to very low demand and an unpredictable market that depends on the COVID-19 situation, businesses do not dare increase production.

Instead, they are stocking up on raw materials and packaging to be able to meet demand when the market revives, she said.

A survey by the Ministry of Industry and Trade found the market showing signs of recovery, with inventories shrinking by 14 per cent compared to four months ago.

But analysts do not think the worst is over.

The city encourages distributors and manufacturers to run promotion programmes to stimulate demand for shopping to drive economic recovery with priority given to online channels and non-cash payment.

To begin with they have been advised to focus on speeding up production, supplying goods for Tet and reconnecting broken supply chains.

The city plans to organise a conference to connect goods supply between the city and other provinces from December 2 to 5.

It will also organise the 2021 Promotion Fair from December 21 to 26 at the Phu Tho Sports Stadium in District 11 with more than 450 booths showcasing consumer goods, farm produce and handicrafts without the 50 per cent discount cap in force.

The promotions will also include gifts and lucky draws. Participating businesses need to ensure the origin and quality of their products.

Bui Ta Hoang Vu, director of the city Department of Industry and Trade, said promotion programmes are very important now as a bridge for businesses and consumers to meet.

This year, due to the pandemic, total retail sales in the city has halved from last year.

In the last two months of the year, with policies to stimulate demand and focused promotions, the city hopes to stimulate shopping, even in international branded products at low prices.

The Ministry of Industry and Trade will organise a month-long programme called ‘National Focused Promotion Month’ in December.

Participating businesses need to strictly comply with pandemic prevention regulations stipulated by the Ministry of Health. 

South Australia – Vietnam Business Council debuts

The South Australia – Vietnam Business Council (SAVBC) officially debuted in Australia on November 27, offering a new trade connectivity channel for the two countries’ businesses.

Speaking at the event, SAVBC Chairman Francis Wong, who is also representative of Becamex IDC in Australia, said the SAVBC’s establishment is expected to help private sector in South Australia state better tap opportunities and build close ties with the Vietnamese partners.

The SAVBC now groups nearly 70 members, mostly those in South Australia state operating in trade and services. It expects to have 200 members in the next 18 months.

Its members will share experience and cooperate with Vietnamese firms in fields of Australia’s strength such as agriculture, fisheries, education, digital economy, tourism, science-technology and innovation, manufacturing, energy and natural resources, and services.

As Vietnam is forecast to be a new hub of Mekong River region, ASEAN and Asia, the SAVBC will offer favourable conditions for South Australia’s enterprises to boost investment in Vietnam, towards expanding markets, improving their growth and competitiveness, Wong said.

In the immediate future, it will introduce the Vietnamese market to its members via seminars and forums, thus providing a platform for them to connect with representative Vietnamese agencies in Australia, he added.

At the event, the Vietnamese Consulate Generals in New South Wales, South Australia and Queensland states in collaboration with the Vietnam Trade Office in Australia introduced Vietnamese longan, fresh coconut and dragon fruit to Australian companies. They are all imported and distributed by 4 Ways Fresh company.

In the evening the same day, the Vietnamese Entrepreneurs Association in Sydney held an year-end meeting to review its 2021 activities and debuted its new executive board for the second tenure./.

Foreign capital flow in Vietnam hit 26.46 billion USD in 11 months

Foreign direct investment (FDI) registered in Vietnam reached 26.46 billion USD as of November 20, up 0.1 percent year on year, according to the Ministry of Planning and Investment.

Notably, the total additional registered capital stood at over 8 billion USD, an annual rise of 26.7 percent.

During the period, 14.1 billion USD was poured into 1,577 newly-licensed projects, up 3.76 percent in value but down 31.8 percent in volume over the same period last year.

The remaining investment capital was used for capital contribution and share purchases in a total 3,466 transactions.

Foreign investors landed investments in 18 sectors, with processing and manufacturing absorbing the largest amount of capital (over 14 billion USD or 53 percent), followed by power generation and distribution (over 5.7 billion USD), real estate (2.41 billion USD), and wholesale and retail sale (1.27 billion USD).

Among 100 countries and territories having investment in Vietnam in the period, Singapore took lead with 7.6 billion USD, making up 28.7 percent of the total. The Republic of Korea (RoK) came second with more than 4.36 billion USD, and Japan was the third largest investor with 3.7 billion USD.

Localities that attracted the most FDI were Long An (3.76 billion USD), Ho Chi Minh City (nearly 3.43 billion USD), and Hai Phong city (over 2.8 billion USD).

Export turnover of the FDI sector (including crude oil) was estimated at nearly 220.2 billion USD, up 19.7 percent over the same period and accounting for 73.6 percent of Vietnam’s total. The sector’s import value (excluding crude oil), meanwhile, exceeded 195.5 billion USD, an annual increase of 29.5 percent and accounting for 65.5 percent of the country’s total./.

Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan

Source: https://vietnamnet.vn/en/business/vietnam-business-news-november-28-796111.html

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Stock market expected to cross current threshold

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During the last trading sessions of 2021, the stock market was not particularly active. The effect was being felt of unfavorable news on the macro, the most notable of which was the GDP growth of the whole year at only 2.58%.

Stock market expected to cross current threshold

The news of a new variant of the Covid-19 called Omicron was also detected in a few people in Vietnam. However, despite this turbulent news, the stock market did not react in shock. The VN Index is still moving sideways between 1,480 points to 1,500 points.

Optimistic scenario

The GDP growth rate of 2.58% in 2021 was not a surprise. Even if viewed from a future perspective, this is a positive result, because there have been many poorer growth forecasts before. For example, at the end of October 2021, the World Bank estimated the GDP growth in 2021 in the range of 2% to 2.5%. There are also a few organizations such as UOB Bank that gave 3%, and the optimistic scenario of the General Statistics Office also giving 3%. Therefore, the actual growth rate of 2.58% is still a better result than many organizations predicted, although it is still at a very low level.

However, just when there are no longer any more surprises, the stock market reacts indifferently. In the last trading sessions of 2021, the VN Index went up and down mainly due to the influence of some large-cap stocks. Statistics in the past show that the last week of the market usually grows quite positively due to the impact of maintaining a portfolio value. This year the situation is very different, especially after the growth spread of the second year of Covid-19, where the VN Index increased by about 35%, and it is no longer urgent to support the portfolio, and even profit-taking transactions determine the annual bonus. Therefore, the threshold attained of 1,500 points will still be the historic peak of the market and of 2021.

In fact, indifference to bad news is an important psychological indicator in the market. The sentiment factor and the emotional action of the crowd has always been a part of the market. So when bad news appears, the level of emotional action shows that investor sentiment is not easily swayed, because the more indifferent the market reacts, the stronger the sentiment is. Looking at it from this perspective, the volatile days at the end of 2021 of the stock market ended a wobbly economic year, with a record low growth rate, which is a good sign.

Worst maybe over

There have been many forecasts about a positive recovery of Vietnam’s economy in 2022 along with an initial forecast of a weak growth in 2021. Of course, forecasts will still be affected by many variables, such as whether the Omicron mutation can trigger a more dangerous pandemic wave, but basically the stock market still hopes that the worst is over.

Not only Vietnam’s stock market, but securities around the world are also feeling the same. The more the Omicron mutation spreads in the US, the S&P 500 set a new historic high in the last week of 2021. French, German, and British stocks are all at historic high, although the number of cases of the new strain called Omicron has also increased rapidly. The fact that the VN Index is sticking to the historical threshold of 1,500 points these days is actually an opportunity. The market has a golden opportunity now to hit a new historic high, but what is missing is an expectation to lead.

In the first week of 2022, that expectation may arise when the Extraordinary Session of the National Assembly will take place from 4 January to 11 January 2022, the important content being the consideration of the draft resolution on fiscal and monetary policies to support the implementation of the program on socio-economic recovery and development. This resolution will pave the way for the implementation of the economic stimulus package that the stock market has been waiting for since October 2021.

The market has bet in advance on this stimulus package with a growth of nearly 13% in October and November, which is the time when the VN Index made its historic peak of 1,500 points for the first time. The whole December market stopped accumulating to wait for a confirmation.

Growth forecasts of the stock market in 2022 all consider this economic stimulus package to be a push to create a boom. According to the Vietcombank Securities 2022 outlook report, growth in public spending can have a positive effect on consumer spending and private investment as consumer demand has gradually recovered and a reasonably sized economic stimulus package targeting the right sectors before the Lunar New Year will help Vietnam keep up with world recovery. GDP growth in 2022 may also reach 6.8% to 7.2%.

VNDS also expects that the Government will issue a large-scale economic support package and maintain an easy monetary policy until at least the end of the second quarter of 2022 to promote economic recovery, while GDP is expected to grow by 7.5% in 2022.

Although forecasts are regularly updated and changed based on new variables appearing over time, the above scenarios show that the stock market expectations are well-founded. The market cycle is more closely associated with the cycle of expectations, starting with a response to receive information, followed by a pause to assess the future impact and build expectations then continue an uptrend based on expectations and finally waiting time, even adjusting to confirm expectations. This cycle is often phased out compared to actual figures due to going faster. So it wouldn’t be surprising if the stock market hits a new historic high before the effects of the stimulus policies are actually seen.

The market has a golden opportunity now to hit a new historic high, but what is missing is an expectation to lead. It is expected that the Extraordinary Session of the National Assembly which will take place from 4 January to11 January 2022, will have the main focus on decision to implement the program on socio-economic recovery and development.

Source: SGGP

Source: https://vietnamnet.vn/en/business/stock-market-expected-to-cross-current-threshold-809268.html

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HCMC, Mekong Delta develop formal distribution system of farm produce

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Vice Chairwoman of HCMC People’s Committee Phan Thi Thang promised to bring goods from the Mekong Delta into wholesale markets and distribution systems in HCMC to support farmers and cooperatives for connection of supply and demand.

 HCMC, Mekong Delta develop formal distribution system of farm produce

In Cao Lanh city in Dong Thap province at the heart of the Mekong Delta, a conference about goods consumption connection between five provinces in the Mekong Delta including Dong Thap, Ben Tre, Vinh Long, Long An, and An Giang, and Ho Chi Minh City was held on January 15, 2022. Vice Chairwoman of Ho Chi Minh City People’s Committee Phan Thi Thang, leaders of provinces, and about 500 enterprises were attending.

Within the framework of the program, one day before yesterday, a delegation from Ho Chi Minh City including more than 60 enterprises led by the Department of Industry and Trade of Ho Chi Minh City visited several gardeners and agro-processing enterprises of some provinces in the Mekong Delta region.

The supply of goods in the Mekong Delta before the Lunar New Year was quite abundant, most of the goods had relatively stable prices, even some fell quite deeply. This situation has never been before.

This year, the complicated development of the Covid-19 epidemic has strongly affected purchasing power. For instance, Cao Lanh District, Dong Thap Province currently has 7,800 hectares of fruit trees, hundreds of thousands of tons of products with diverse and rich varieties such as mangoes, oranges, lemons, guava, and jackfruit put on the market each year.

This year, although it is the peak season of the Tet holidays ( the Lunar New Year), the prices of many types of products are falling deeply, driving farmers into despair. For example, jackfruit price dropped from VND40,000-VND50,000 to VND4,000-VND5,000 a kg; many other fruits also decreased about 20 percent over the same period.

Thanh Binh District in the same province has more than 3,150 hectares of fruit trees, nearly 570 hectares of aquaculture. The price of seafood of all kinds is decreasing by about 20 percent compared to 2021. Worse, an enormous volume of commodities was stockpiled before the Lunar New Year season.

Vice Chairman of Thanh Binh District People’s Committee Mai Van Doi said that over the past time, farmers, as well as many local enterprises, have improved product quality and packaging; however, fresh products have not been still processed, and no enterprises have undertaken consumption of agricultural products.

Quality Manager of San Ha Company Nguyen Huu Tri said that from September 2021, the enterprise signed a contract to purchase livestock and poultry in the Mekong Delta for the whole year 2022 at a relatively stable price.

He added that the Covid-19 epidemic has disrupted the supply chain, leading to an increase in raw materials for livestock and poultry. The company will share difficulties with farmers.

Most of the enterprises, cooperatives, and leaders of the five provinces admitted that farming, production, and processing were still fragmented and had not been linked for mutual development. In particular, in the past time, many businesses have only focused on export, neglecting the domestic market; as a result, trucks got congested in the northern border gate.

Faced with this situation, representatives of the wholesale and retail market system from Ho Chi Minh City proposed that businesses in the Mekong Delta and local departments should create commodity chains that connect local products to retailers and supermarkets.

On the other hand, farmers and businesses need to pay attention to product quality, especially paying attention to the cultivation process, traceability because supermarkets are very strict about product quality and reasonable prices.

Speaking at the conference, Vice Chairman of Ho Chi Minh City People’s Committee Phan Thi Thang assessed that the Mekong Delta has many strengths in agricultural production along with the value chain. However, farmers often tend to produce spontaneously without an understanding of market demand resulting in abundant production.

Therefore, she suggested that leaders of provinces create favorable conditions for manufacturing and exporting enterprises in Ho Chi Minh City to boost investment in projects to build material areas for a stable source of goods, traceability, reputable brand name, agricultural products with good quality. Moreover, enterprises should have sale contracts at international border gates and main border gates; thereby, creating a new, large-scale, stable, and long-term market area for enterprises in HCMC and provinces.

Source: SGGP

Source: https://vietnamnet.vn/en/business/hcmc-mekong-delta-develop-formal-distribution-system-of-farm-produce-809267.html

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E-commerce – important pillar of Vietnam’s digital economic development

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The Fourth Industrial Revolution is taking place around the world with a boom in digital technology, creating great opportunities for but also challenges to the development of each country, enterprise, and person.

E-commerce - important pillar of Vietnam’s digital economic development hinh anh 1

E-commerce has proved to be an increasingly useful tool for enterprises to surmount difficulties and grasp chances (Illustrative photo: VNA)

Vietnam’s digital economy has been growing at the fastest pace in ASEAN, about 38 percent annually compared to the region’s average of 33 percent since 2015. The country expects the digital economy will make up 20 percent of its GDP and at least 10 percent in each sector.

Vietnam’s digital economy posts fastest growth in region

In a recent interview granted to the Vietnam News Agency, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said local e-commerce has been thriving, playing an important role in economic development as well as in the future of Vietnam’s digital economy. E-commerce development is an inevitable trend in the country, and the COVID-19 pandemic serves as a catalyst for this trend to proceed faster and more strongly.

Despite the pandemic’s adverse impacts in 2020, e-commerce in Vietnam still made great strides to become one of the fastest growing markets in Southeast Asia.

According to the Vietnam E-commerce White Book, e-commerce expanded by 18 percent in 2020 to reach 11.8 billion USD, making the country the only in Southeast Asia to post a double-digit growth rate in this regard. Estimates by some major businesses in the world like Google, Temasek, and Bain & Company indicate that the digital economy of Vietnam is likely to top 52 billion USD and rank third in ASEAN by 2025.

Amid the resurgence of COVID-19 in 2021, e-commerce has proved to be an increasingly useful tool for enterprises to surmount difficulties and grasp chances generated by new demand in the market. Local consumers are strongly shifting from the traditional in-person shopping to online method via electronic platforms.

A survey by the Ministry of Industry and Trade showed that Vietnam had 49.3 million online shoppers in 2020, compared to 32.7 million in 2016.

Hanoi and Ho Chi Minh City are among the largest cities in terms of digital economic development in the region. In HCM City alone, there are currently 567 e-commerce platforms, over 20,680 websites, and 134 apps. Although the lingering COVID-19 pandemic has hindered the flow of goods, many e-commerce platforms and websites still posted fast growth.

Thanks to the digital economy, business activities have become vibrant, from advertising on social networks (Facebook, Instagram), entertainment (Netflix, Pinterest), transport (Uber, Grab, GoViet) to wholesale and retail (Lazada, Shopee).

Vietnam has emerged as one of the largest regional recipients of investment into the companies operating on IT platforms and the internet such as MoMo, Sendo, and Topica, helping turn it into an attractive destination for domestic and foreign investors.

Transboundary e-commerce – useful distribution channel for enterprises to expand market

E-commerce helps people purchase items from international markets via the internet and become “global consumers”. It also assists individuals and businesses to introduce and deliver their products to international buyers.

The engagement in the online export – import system and stages of transboundary e-commerce will generate opportunities for Vietnamese firms to perfect their products, improve capacity, and make Vietnamese brands popular among consumers around the world.

To help boost the sale of Vietnamese goods via transboundary e-commerce, the Vietnam E-commerce and Digital Economy Agency (iDEA) has launched the Vietnam National Pavilion on JD.com, an international e-commerce platform. Its partners like Vinanutrifood, Viettel Post, VPBank, and Visa also unveiled practical policies related to marketing, transport, and lending interest rates to support Vietnamese manufacturers to carry out this programme.

The Ministry of Industry and Trade has been developing and applying an array of measures such as a certified e-contract authority, guaranteed payment infrastructure for e-commerce, and a platform for managing the e-commerce product flow, which will serve as important bases for the ministry to assist e-commerce platforms and businesses using e-commerce, thus facilitating the healthy, transparent, and sustainable development of the market.

Talking about transboundary e-commerce, iDEA Director Dang Hoang Hai said it is relatively new to enterprises in Vietnam but also the start of a long journey with much needing to be done by both authorities and companies.

He expressed his belief that thanks to joint efforts by the ministry and others, central agencies, localities, and the business community, Vietnamese pavilions on foreign e-commerce platforms will be opened soon and prove effective.

Highlighting the benefits from transboundary e-commerce, Nguyen Thi Diem Hang, Chairwoman of the Board of Director of the Vietnam Organic Nutrition Food JSC (Vinanutrifood), said joining the national pavilion helps popularise the image and brand of Vietnam in the global market. It also supports Vietnamese firms to seek exporting and importing partners and build up foreign consumers’ trust in Vietnamese goods.

Developing healthy e-commerce market in Vietnam

Grasping trends and good practices of digital transformation in trade will help promote innovation in Vietnamese enterprises. On November 22, 2021, the Prime Minister issued a decision approving a plan to step up the IT application and digital transformation in trade promotion during 2021 – 2030.

However, the ministry’s Competition and Consumer Authority pointed out that e-commerce growth has also been accompanied by the surge in wrongdoings related to consumers’ interests. Data show that there are about 500 – 2,000 complaints from consumers every year, mostly about leaks of buyers’ information and scams by sellers.

To create a legal framework for protecting consumers in the e-commerce market, the Government issued a decree that amended and supplemented another on e-commerce released in 2013.

According to the new decree, sellers must publicise information about products as well as business licences and related certificates when doing business on e-commerce platforms. Besides, business activities on social networks like Facebook, Zalo, and Instagram were also placed under management.

The ASEAN Agreement on Electronic Commerce, signed in Hanoi on January 22, 2019 and taking effect on December 2 last year, set up common principles and rules for facilitating e-commerce development in the region and enhancing the rule enforcement capacity.

The deal implementation is expected to help revive the regional economy in the post-pandemic period.

Deputy Minister Tan said in the “new normal” context, e-commerce has increasingly shown its indispensable role in society when enterprises and organisations must swiftly apply digital transformation solutions to their business and management activities like switching to multi-channel retailing and using smart order management and logistics tools.

With huge market potential and the Party and State’s favourable policies, e-commerce is expected to be a contributor to the economic recovery in Vietnam when the country is moving to safely adapt to the COVID-19 pandemic.

E-commerce has been present in almost all production and business sectors, helping boost economic development. However, it is still facing a number of challenges related to consumers’ trust in items sold online, delivery and payment methods, and information security. Given this, the Government and relevant agencies should take appropriate actions to protect consumers and fuel e-commerce in the time ahead./.

Source: VNA

Source: https://vietnamnet.vn/en/business/e-commerce-important-pillar-of-vietnam-s-digital-economic-development-808836.html

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