Insurance premium surges nearly 22% in eight months

The total premium collected by insurance companies in the first eight months of 2017 surged by 21.9 per cent year on year to nearly VNĐ65.56 trillion (US$2.89 billion).

Of the total sum, the revenue from life insurance premiums was VNĐ39.41 trillion and from non-life insurance premiums was VNĐ26.15 trillion, up 33.12 per cent and 11.5 per cent, respectively, the Ministry of Finance’s Insurance Supervisory Authority (ISA) reported.

During this period, insurance companies invested VNĐ226.42 trillion into the economy, a rise of 21.5 per cent, compared with the corresponding period in 2016.

They also paid VNĐ16.92 trillion as compensation for customers.

The Ministry of Finance said that it will continuously streamline draft decrees on agricultural insurance, micro-insurance, fire insurance, and sanctions against administrative violations in the field of insurance and lottery businesses for submission to competent authorities for signing in the remaining months of the year.

Besides this, the ministry will also share information and data used to manage social and health insurance to ensure the connection with commercial insurance.

The Insurance Association of Việt Nam predicts that this year, the growth for life insurance will be 25 per cent, and that of the non-life insurance sector will be 14 per cent.

The growth is a result of the increased awareness among people and companies about the role of insurance, the association said, adding that the country’s economic growth, targeted at 6.7 per cent in 2017, will be an added advantage for the growth of the insurance market.

Insurer FWD reports dramatic growth in 1st year

Hong Kong-based FWD Life Insurance said it has grown dramatically in its first year in Việt Nam and achieved its full-year sales target by August.

The company acquired Great Eastern Life Insurance in Việt Nam in September 2016 and launched the FWD brand.

Anantharaman Sridharan, FWD’s general director, said: "We have had an impressive year in Việt Nam, as did our group across the region. Our success is down to our vision to change the way people feel about insurance as well as thanks to a comprehensive development strategy implemented by our team.”

The company has revealed that it has a goal of rising to the top five in the life insurance industry within the next five years.

In the first year FWD has diversified distribution channels, used digital technology to support agency and customer engagement, minimised the number of exclusions in its products, and launched new products.

It has expanded its sales force and signed two 15-year partnerships with ABBank and Nam A Bank.

To mark its first anniversary FWD has launched a VIP customer gratitude programme, visiting and celebrating 300 seniors living on their own in Hà Nội and HCM City and giving away 70 scholarships and donating charity houses to two disadvantaged families.

Vo Quang Hue gives up Robert Bosch Vietnam to join Vinfast

With Vo Quang Hue’s achievements at Robert Bosch Vietnam, Hue is considered an important factor in realising the dream of “Made in Vietnam” automobiles as he has joined Vietnam's leading property developer Vingroup as deputy CEO-Automotive to oversee the group's Vinfast manufacturing complex.

According to newswire VietQ, a few days ago Hue shared on his private page the following message: “I would like to congratulate Vinfast on its ground-breaking ceremony. I would also like to take this opportunity to announce that I joined Vingroup as deputy CEO-Automotive a few days ago, to oversee the Vinfast project.”

Hue said he left Robert Bosch Vietnam with a heavy heart, but the move opened up opportunities for the Vietnamese automobile industry.

One of Vingroup’s important strategies to develop Vinfast is recruiting talented people, and Hue was the first choice due to his deep knowledge and achievements in the automotive engineering sector.

After graduating from a university of Germany, he immediately started working as an engineer for BMW Group, one of the world’s leading automobile makers. Then he was assigned as chief representative of BMW in Egypt for six years before coming back to Vietnam to work as CEO of Robert Bosch Vietnam Co., Ltd. in 2006.

From running Robert Bosch Vietnam with the initial capital of $1 million, Hue himself built the manufacturing and business plans for the factory. In May 2008, Robert Bosch Vietnam received the investment certificate to develop a factory manufacturing push-belts for continuously variable transmission (CVT) in automobiles with an investment capital of €52 million ($62 million), which was increased to €100 million ($112 million) one year later. Then, the factory was expanded to manufacture spare car parts.

Robert Bosch Vietnam’s products are exported to Japan and are present in the world’s leading automobile brands.

Hue played an important role in developing Robert Bosch Vietnam from a representative office in Ho Chi Minh City to one of the largest European-invested firms in Vietnam with more than 3,300 associates to date. The company now has established activities in four fields, including research and development (R&D), manufacturing, sales, and services.

Thus, Hue is considered one of the most knowledgeable people in international-standard automobiles manufacturing in the country.

Hue said that his devotion to Robert Bosch Vietnam is important, however, so is developing Vietnam, thus, he announced on his private page that he believes joining Vinfast will be the exciting next step in continuing to pursue his dream of transforming Vietnam into a dominant technology hub in the ASEAN bloc.

Prudential Finance retains throne with third Excellent Performance Award from SBV

Prudential Vietnam Finance Company Ltd. has received the “Excellent Performance” 2016 Award, announced by Decision No.1504/QD-NHNN and signed by Governor of the State Bank of Vietnam on July 17, 2017.

This is the third consecutive year Prudential Finance has received the award from the State Bank of Vietnam for its excellent performance in securing business objectives, risk management, personnel development, as well as advanced technology in business, and corporate management.

Speaking at the awards ceremony, Atul Dixit, chief executive officer of Prudential Finance, said: “It is our great privilege to win this award in this special year when we are celebrating 10 years of business in Vietnam. We are deeply honored to serve hundreds of thousands of customers and that more and more customers are putting their trust in our company’s services.”

Since commencing operations in 2007, Prudential Finance has grown up to be one of the leading providers of unsecured retail consumer finance in Vietnam. The company also disburses loans through bank accounts, helping convert the “unbanked” population.

Special incentives in pipeline for agricultural investors

In a move to attract more private investment to the agriculture sector, Vietnam is mulling over offering a series of special incentives in terms of land-use fees and favourable loans for such projects.

Yesterday afternoon, the Ministry of Agriculture and Rural Development (MARD) held a seminar to collect comments for the latest version of a draft decree on incentives for the farming sector, which will replace Decree No.210/2013/ND-CP.

"Decree 210 has proved problematic. There remain many problems in the agriculture sector due to reliance on small and retail households, thus having low productivity, market access difficulties, and low added value," admitted Nguyen Xuan Cuong, Minister of Agriculture and Rural Development.

“The two key tasks will focus on agriculture restructuring towards increasing added value chains and dealing with the weaknesses of the sector, mainly processing and market access. We will also promote sci-tech applications amid the increasing global integration," he added.

Under this draft decree, a firm that has a project with special investment incentives will be exempt from land-use fees, while those having a project with investment incentives will enjoy a 70 per cent reduction in land-use fees.

This draft also includes financial support for agricultural businesses. Accordingly, a firm investing in an agriculture project with special investment incentives and investment incentives, and accepting land-use rights of households and individuals as capital contribution to develop a material area will get a financial support of VND50 million ($2,270) per hectare to develop infrastructure for the area.

In terms of credit policies, a business investing in an agriculture and rural development project will get local support for the interest rate for their commercial loans, once the project is completed.

Specifically, local support for interest rate payments will have a maximum term of eight years for agriculture projects with special investment incentives and six years for projects with investment incentives.

The borrowing cap with interest rate support is not higher than 70 per cent of the project's total investment.

This draft also includes big support for startups in the sector. Accordingly, they will be exempted from water surface and land rental fees from the moment their projects are put into operation. Startups will also be exempt from import duty for machinery and equipment for their project.

There are also many other special financial supports for research, transfer, and application of high-technology in agriculture, for human resources training and market development, for investments in dairy cow and high-yielding cow projects, for investments in slaughter houses, for grown-forest processing projects, for investment in agro-forestry-fishery processing and preservation facilities, and for investments in agriculture and rural development infrastructure.

Both local and foreign firms can benefit from the special incentives, according to the draft.

MARD expects to submit the draft decree to the government for approval in September, contributing to making the sector more attractive to private investors.

According to the ministry, the number of businesses investing in agriculture remains modest. As of September 2016, the country had 4,424 businesses in the sector, making up less than 1 per cent of the country's total.

Imexpharm may scrap FOL if market winds are right

Imexpharm Pharmaceutical Joint Stock Company, Vietnam's fourth-biggest pharmaceutical firm, will consider scrapping the foreign ownership limit if this becomes a common trend.

Nguyen Quoc Dinh, chairman of Imexpharm (IMP), told VIR that the company is not an exception to this trend. However, at present, IMP has yet to have any plans to remove the FOL as no stakeholders have submitted a proposal to this effect yet.

Imexpharm's FOL now remains set at 49 per cent. The company has Balestrand Limited (6.09 per cent), Franklin Templeton Investment Funds-Templeton Frontier Markets Fund (8.49 per cent), and Kwe Beteiligungen AG (8.23 per cent) as foreign shareholders.

The drug maker aims to fetch a total revenue of VND1.26 trillion ($57.27 million) in the second half of this year, up 23.4 per cent on-year, while making a pre-tax profit of over VND160 billion ($7.27 million), up 14 per cent on-year.

At present, IMP is developing two new factories. Binh Duong high-tech pharmaceutical plant, coming at a cost of VND370 billion ($16.8 million), is over 60 per cent built and is scheduled to be put into operation in late 2019. Vinh Loc high-tech antibiotic plant, which will end up costing VND180 billion ($8.2 million), is 95 per cent built and is scheduled to open in late 2018.

When the two new facilities are put into operation, they will increase IMP’s revenue by 15-28 per cent and profit by 12-15 per cent on average in the 2017-2021 period.    

In the first half of 2017, revenue from IMP-made products accounted for 83.9 per cent of the firm’s total net revenue of VND510.4 billion ($23.2 million), up 17.1 per cent on-year.

"Of this total, revenue from OTC drugs made up 81.7 per cent and rose 15.9 per cent on-year. ETC drugs accounted for 18.3 per cent, ascending 14.3 per cent on-year,” Dinh added.

In fact, scrapping the FOL seems an inevitable trend among leading Vietnamese pharma firms.

Vietnam’s biggest publicly-traded drug maker, Hau Giang Pharmaceutical JSC (DHG), has decided to entirely lift its FOL from January 1, 2018.

DHG now has Taisho Pharmaceutical Holdings, one of the five biggest pharma firms in Japan, as a strategic foreign shareholder with 24.5 per cent, followed by FTIF Templeton Frontier Markets Fund. State Capital Investment Corporation (SCIC) is the biggest stakeholder with 43.3 per cent.

DHG will be the second Vietnamese pharma firm to remove the FOL, following the third biggest listed domestic drug maker, Domesco (DMC).

Last September, DMC became an industry pioneer when it decided to remove its FOL. At the time, other pharma firms, including DHG, were gripped by fear of being acquired.

Vinachem fertiliser plants amassing losses

Despite restructuring, Dinh Vu and Lao Cai DAP fertiliser plants, two of the twelve loss-making projects under the management of the Ministry of Industry and Trade (MoIT), are still struggling and facing possible closure. 

While some other fertiliser firms are reporting profit, DAP-Vinachem Co., Ltd. (ticker DDV on HoSE), a subsidiary of Vietnam National Chemical Group (Vinachem) operating Dinh Vu diammonium phosphate (DAP) fertiliser plant, recorded a loss in the first half of 2017.

In particular, although DDV’s revenue increased by 14.5 per cent over year, it still suffered a loss of VND55 billion ($2.42 million).

According to DDV’s leaders, despite a slight recovery, the company is still confronted with difficulties in product demand, declining selling prices, increasing loan interest rates, and so on.

Earlier, when forecasting business prospects for 2017, Nguyen Van Sinh, general director of DDV, said that its business in 2017 would not be smooth as the price of input materials would increase by nearly 30 per cent compared to the end of 2016.

DDV set the 2017 revenue target of more than VND2 trillion ($88 million) and profit target of VND1.2 billion ($52.8 million).

As of June 30, 2017, DDV suffered an accumulated loss of nearly VND521 billion ($22.9 million) and had an owners’ equity of VND944.6 billion ($41.6 million), while its chartered capital was over VND1.461 trillion ($64.3 million).

DDV’s total assets were more than VND2 trillion ($88 million), a reduction of 6 per cent compared to early 2017. Of the total, the short-term assets were more than VND503 billion ($22.1 million), accounting for 24 per cent of the total assets, and the long-term assets were VND1.534 trillion ($67.5 million), accounting for 76 per cent.

In 2016, Vinachem reported a record loss of VND470 billion ($20.68 million), a sharp growth compared to 2015.

DDV’s leaders said that the main reason for this loss is that fertiliser prices are declining while the cost of input materials is rising. Also, weak production cost management was mentioned for this failure.

Another Vinachem subsidiary in the fertiliser industry called DAP 2-Vinachem JSC operating Lao Cai DAP fertiliser plant reported even worse business results.

Besides objective problems of market surplus and fierce competition with foreign brands, high investment costs and limited product quality were the main reasons why the more Lao Cai DAP fertiliser plant produces, the worse its business results are.

Additionally, the Inspectorate under the Ministry of Construction and the State Audit have been constantly pointing out a wide range of serious violations in the investment and construction management of DAP 2-Vinachem JSC.

The total investment for Lao Cai DAP 2 fertiliser plant was nearly VND5.2 trillion ($228.8 million), a sizeable increase compared to the initial approved investment of more than VND4.4 trillion ($193.6 million).

Notably, from July 2015, when Lao Cai DAP was put into commercial operation, to June 30, 2016, the plant’s capacity did not reach the target.

In particular, from July 1, 2015 to December 31, 2015, the average capacity reached 65.2 per cent of the target. From January 1, 2016 to June 30, 2016, average capacity reached 43.5 per cent of the target.

In 2015, the plant suffered a loss of more than VND100 billion ($4.4 million), while in 2016, it was deep in a loss of over VND800 ($35.2 million).

Vinachem used to turn to the government to extend the maturity of its debts, reduce interest rates, apply tax to imported products, and so on, to save its four projects, including the two DAP plants.

From August 19, 2017, a temporary tax of VND1.85 million ($81.4) has been imposed on each tonne of imported DAP fertiliser. Nguyen Van Thanh, head of the Vietnam Chemicals Agency, said that this decision really benefits fertiliser manufacturers.

According to Thanh, this new policy will partly support loss-marking fertiliser plants like the Dinh Vu and Lao Cai DAP plants. Accordingly, Dinh Vu DAP may stop suffering losses if it can manufacture and sell 268,000 tonnes of DAP fertiliser.

The leader of a fertiliser plant in Ba Ria-Vung Tau said that the imposed tax on imported fertilisers can only support domestic fertiliser manufacturers so far, as their main problems are the high investment costs and inappropriate locations and technology, which lead to high production costs and low product quality.

MoIT said that the total losses of Vinachem DAP and DAP 2 are nearly equal to their owners’ equity and it is possible that in 2017 their owners’ equity may even turn negative. If the situation cannot change, these two plants will face high risk of closure. 

CBRE Vietnam appointed as exclusive management agent for Central Point

CBRE Vietnam has been officially selected by 19-12 Bac Ha Co. Ltd., as the exclusive property management agent for its Central Point project located at 219 Trung Kinh Street, Cau Giay District, Hanoi.

Central Point is a mixed-use complex comprising of three towers (one office, two residential), each of 29 floors, and a five-floor retail podium on top of three basements providing ample parking capacity. The project is in the final stages of construction and is expected to go into operation in the third quarter of 2017.

According to Nguyen Bich Trang, director of CBRE Vietnam’s Hanoi Office, CBRE Vietnam believed that by combining the management and leasing teams on this project, it can make Central Point a more desirable address for tenants, visitors, and residents who seek a convenient lifestyle with modern facilities in the growing western districts of Hanoi.

"We will support all tenants and residents so that they can enjoy the onsite facilities and amenities and seize the advantages of living in western Hanoi,” said Trang.

With a convenient location, good access to nearby schools, hospitals, shopping and leisure facilities and parks, Central Point will provide a pleasant environment for residents to live, work, and play, while also providing opportunities for organisations and retailers to reach their target customers and develop their businesses.

Dairy enterprises eyeing China

The Nutritional Food Joint Stock Company (Nutifood) has successfully exported soy milk to China after exporting a test order to its partner in the country, opening up substantial opportunities for Nutifood to increase its export volume.

“China is densely populated and the dairy industry is well developed, but partners have chosen Nutifood as their supplier,” said Mr. Cao Tuan Thanh, International Business Manager at Nutifood, “Most products are found in major cities, but there is a lack of products in the countryside, especially milk products. This represents an opportunity for Vietnamese milk companies.”

Though this is the first order for Nutifood from China and there are no long-term orders, it has meet a number of potential new partners.

Vinamilk was the first milk enterprise in Vietnam to sign a memorandum of understanding (MoU) on the supply of dairy products to China, in May this year. It was witnessed by senior Chinese leaders and visiting State President Tran Dai Quang, who was in China from May 11-15 to pay a State visit and attend a high-level forum on the Belt and Road Initiative.

China is a market of great potential, with the world’s largest population and a dairy sector worth some $30 billion a year. Vinamilk expects the MoU will be a precondition for its export to China in the future.

Some Vietnamese milk enterprises can compete with major milk brands, while demand in China is high and varied, according to a representative from Vinamilk.

The Anova Milk JSC in Vietnam is now carefully researching the habits of Chinese customers to build marketing strategies for high-end milk powder exports to the country.

Mr. Vu Ngoc Quynh, General Secretary of the Vietnam Dairy Association, said that recent surveys have revealed that Vietnamese dairy products are popular among Chinese consumers, such as sweetened yogurt, sugar-free yogurt, sterilized yogurt, whole milk yogurt, and liquid milk.

Thai fruit & vegetable imports up handsomely

The latest figures from the Ministry of Agriculture and Rural Development (MARD) reveal that the import value of fruit and vegetables in August reached $169 million, bringing the first eight-month figure to nearly $1 billion, up 93.7 per cent year-on-year.

The import value of fruit reached $809 million in the first eight months, more than double the figure in the same period of 2016, while vegetable imports were estimated at $190 million, up 34.6 per cent.

Thailand is still the largest source of fruit and vegetables, with a share of 61.8 per cent, followed by China with 16 per cent.

According to Mr. Hoang Trung, Director General of the Plant Protection Department at MARD, 90 per cent of Thai fruit is exported to Vietnam and then re-exported to China. He added that, in recent years, trade negotiations with Thailand have achieved positive results, so more fruit from Vietnam can be exported to the country and vice-versa. At present, Vietnam exports about 9,000 to 10,000 tons of fruit to Thailand each year.

Fruit and vegetables from Thailand imported into Vietnam are growing in volume, as the level of trust among Vietnamese in Thai products has been rising over the years, including in tech goods, household goods, and food.

As Thai retail giants have acquired retail networks in Vietnam and the 100 per cent tariff on goods imported from Thailand has been removed, the country’s products have many opportunities in Vietnam.

In 2015 and 2016, two large retailers in Vietnam - Big C and Metro - were acquired by Thailand’s Central Group and Berli Jucker (BJC). 

The prices of Thai fruit and vegetables are also on par with domestic equivalents. 

Samsung Securities to acquire stake in Dragon Capital

Samsung Securities will acquire a stake in Dragon Capital, the largest asset management company in Vietnam, to accelerate its presence in the country rather than establishing a corporation, foreign newswire BusinessKorea has reported.

The move indicates that since the issuance of bills of lading, one of the main tasks of a large investment bank, was suspended in South Korea, Samsung Securities turned its eyes overseas so as not to lag behind its competitors.

According to securities industry and financial authorities on September 6, Samsung Securities will acquire Dragon Capital shares by partnering with Caldera Pacific, a Hong Kong-based private equity fund.

Samsung Securities and Caldera Pacific will jointly become the second-largest shareholder in Dragon Capital, with a 40 per cent holding. Caldera Pacific will be a general partner and Samsung Securities a limited partner.

Samsung Securities will own about 10 per cent of the stake, shelling out a considerable sum in the process.

A representative from Dragon Capital declined to confirm the news with VET, saying it will make an official announcement soon.

Dragon Capital is the largest asset management company in Vietnam, with assets under management amounting to $900 million. It has also played a role as a bridgehead for capital from Hong Kong to enter Vietnam.

“The opening of an office or a corporation, a general overseas advancement form, takes a lot of time from the input of money to results,” an official familiar with the acquisition said. “But the takeover of a stake in a local asset management company allows a company to efficiently and effectively secure a sales network and infrastructure.”

Unlike Mirae Asset, the Shinhan Financial Group, and Korea Investment, which all set up corporations in the early stages of their operations in Vietnam, Samsung Securities has no bridgehead to Vietnam except for the strategic alliance forged with the Ho Chi Minh Securities Corp. (HSC) in March. Thus, market experts say that there is a possibility that Samsung Securities will additionally acquire stakes in other companies, with this investment just the beginning. 

Five South Korean securities firms - Mirae Asset Daewoo, NH Investment, Korea Investment and Securities, Golden Bridge, and Shinhan Financial Investment - have seven offices or corporations in Vietnam. Korea Investment & Securities increased its stake in EPS Securities in Vietnam to 98.2 per cent by investing an additional $39 million after launching KIS Vietnam and acquiring an initial 49 per cent stake.

KIS Vietnam, which hovers at around 70th among the Top 100 securities companies in Vietnam, increased its market share in the brokerage market by nearly 5 per cent from 0.25 per cent over the course of five years. NH Investment Securities entered Vietnam by establishing an office in Ho Chi Minh City in 2007. In 2009, it acquired a 49 per cent stake in Vietnam CBV, a local securities company. It is currently in negotiations with CBV to ramp up its stake to 100 per cent.

However, as external uncertainties increase and the overall overseas sales performances of South Korean securities companies are on a downward trend, financial authorities are paying attention to risk from overseas. Last year, brokerage firms’ overseas branches suffered a net loss of $4.5 million due to a spike in selling and administrative expenses related to losses on valuations under the equity method of accounting by some overseas branches and the provision of prime brokerage services (PBS). Large South Korean securities firms that made a foray into Vietnam have also targeted expanding new business items such as investment banking and prime brokerage services, breaking away from brokerage-oriented sales.

Vingroup shakes hands with Siemens

Vingroup and German conglomerate Siemens signed a memorandum of understanding (MoU) on September 7 to promote technological cooperation in many important areas.

Vingroup will cooperate with Siemens in applying innovative technologies and solutions for projects in three fields: automobile manufacturing, building and residential development, and hospital development involving Vinmec.

The two sides will also consider collaborating closely in agriculture and other industries Vingroup may expand into in the future.

“Vingroup is one of the most powerful private economic groups in Vietnam, with a sustainable and dynamic development strategy along with great potential for regional and international integration,” said Siemens Vietnam President and CEO Thai-Lai Pham. “Siemens is proud to successfully participate in a number of major projects of Vingroup and is very pleased with this fruitful partnership so far. Therefore, both parties decided to enter into this MoU, which is a critical milestone in our cooperation history and we are fully committed to supporting Vingroup in the successful implementation of upcoming projects.”

The cooperation with Siemens will enable Vingroup to optimize its business operations and product execution as well as improve the quality of its products and services to meet world-class technology standards.

In relation to its automobile project, Siemens will support Vingroup to become a digital enterprise and also undertakes to recommend and introduce it to suitable design consultants and engineering, procurement and construction (EPC) contractors.

Siemens is one of the international partners of the VinFast automobile manufacturing project, which was kicked off by Vingroup on September 2. The two sides will join forces to work on advanced plant management and operation systems towards Industry 4.0.

Siemens is also committed to organizing a workshop with Vingroup to provide the latest technology updates and training in the aforementioned areas.

“Vingroup considers Siemens a technology partner, to utilize its knowledge and experience in providing technologies in areas Vingroup is working on,” said Ms. Duong Thi Mai Hoa, CEO of Vingroup. “With 170 years of experience and a global presence in more than 200 countries and territories, Siemens is truly a technology pioneer and innovation leader. Thus, we believe that this cooperation will bring many opportunities in both breadth and depth for both parties, especially at this particular point in time when Vingroup is expanding its business towards industries that support sustainable development and apply state-of-the-art and green technologies.”

Vingroup held a breaking ground ceremony on September 2 for its electric automobile and motorbike manufacturing complex called Vinfast. Vinfast has total investment of VND35 trillion ($1.5 billion), is located at the Dinh Vu-Cat Hai Economic Zone in northern Hai Phong city, and has a designed capacity of 500,000 units. It expects to debut “Made in Vietnam” motorbikes in September 2018 and Vinfast automobiles, including electric and gasoline models, in 2019.

Grab expands to Quang Ninh

Ride-hailing platform Grab officially expanded its GrabCar and GrabTaxi services to northern Quang Ninh province a few days ago. The expansion is in line with Grab’s key mission of making transport more accessible for everyone and is testament to its commitment to fulfill Vietnam’s growing need for on-demand, door-to-door rides and to improving the lives of all Vietnamese.

Grab’s ride-hailing services are now available in four cities, establishing its leadership as the broadest ride-hailing network in the country.

“Following the government’s direction and the Ministry of Transport’s Decision No. 24/QD-BGTVT to pilot the application of science and technology in managing and connecting contract-based passenger transportation, the Quang Ninh Department of Transport has reviewed the feasibility of Grab Vietnam’s pilot project,” a representative from local authorities told the launch event. “Together with the Quang Ninh Provincial People’s Committee, we officially approve Grab Vietnam’s pilot of GrabCar and GrabTaxi in the province. We believe that with its experience in ride-hailing services in Southeast Asia and in some major cities in Vietnam, Grab Vietnam will fulfill all the requirements of the pilot scheme and bring about more transport options for local commuters and tourists.”

“We would like to thank local authorities for allowing us to pilot GrabCar and GrabTaxi services in the province,” said Mr. Jerry Lim, Grab Vietnam’s Country Head. “Working hand-in-hand with the government has always been the hallmark of Grab’s business. We are happy that we share a common goal with the Quang Ninh government of using technology to improve people’s daily commute. With their strong support, we will continue to innovate and provide a platform for our driver-partners to earn sustainable incomes and for our passengers to enjoy safe, affordable, and convenient transport services.”

Grab is also committed to building the technology and engineering talent pool in Vietnam, with a new research and development (R&D) center in Ho Chi Minh City. These engineers will use their local expertise to provide localized solutions that are tailored to the needs of Vietnamese commuters and drivers, enhancing their overall user experience.

Grab recently announced that Didi Chuxing, the world’s leading one-stop mobile transport platform, and the SoftBank Group Corp., a global technology leader driving the information revolution, will invest up to $2 billion to lead Grab’s latest financing round. Grab anticipates that it will raise an additional $500 million, bringing the total to $2.5 billion in this round from existing and new investors. This is the largest single financing seen in Southeast Asia.

Criteo marketing technology helps K&K Fashion boost sales

Criteo, a commerce marketing service provider, has recently announced that its Dynamic Retargeting tool has helped K&K Fashion achieve a 43 per cent increase in click through rates (CTR) and a 66 per cent increase in conversion rates, resulting in a 121 per cent increase in sales transactions within a short timeframe of just six months.

By leveraging the strength of Criteo Engine, K&K Fashion can precisely predict purchasing intent using the solution’s anonymous cross-device understanding of their customers’ behavior across all devices, browsers, and applications. This has empowered the brand to make informed decisions and improve its business decision making in areas such as budget allocations for marketing activities.

“It’s more important than ever for retailers like K&K Fashion to invest in their online platforms, to be able to correctly identify potential new and recurring customers,” said Mr. Joshua Koh, Regional Managing Director, Mid-Market Sales, APAC, at Criteo. 

“In Vietnam, ‘showrooming’ is a popular trend and almost all Vietnamese shoppers are browsing online while in physical stores. By leveraging user-centric data, retailers will be able to show personalized ads to shoppers based on their browsing behavior. We are building an open ecosystem that connects brands and shoppers to the things they need and love, allowing them to compete more effectively with larger e-commerce companies.”

“Openness, transparency, security, and fairness are cornerstones of our commerce marketing ecosystem, where every participant gets more than what they contribute,” he went on. “To maximize K&K Fashion’s return on investment (ROI) on its marketing strategies, our user-centric approach allows them to capture a complete view of their customers’ shopping experience. This approach aligns with customers’ buying behavior and intent to more accurately report transaction attribution.”

Vietnam’s e-commerce industry is growing rapidly, driven by growth in internet penetration and increasing affluence. With 10 million more online shoppers expected in the next three years, the sector is estimated to grow 30 per cent per annum until 2020, when it will be worth $10 billion, according to the Vietnam E-commerce and Information Technology Agency (VECITA) 2016 report.

To ensure that it continues to engage new and existing shoppers, K&K Fashion wanted to focus on digital marketing to promote their brand and products. However, they had budget constraints and lacked comprehensive tools to measure their marketing outcomes effectively. This adversely affected their business decisions, such as expanding sales channels and increasing marketing budgets.

“Criteo’s performance marketing solution greatly helped us understand our business better and how we can improve our marketing strategies to retain our current customers and attract new potential customers,” said Mr. Le Viet Thanh, Managing Director of K&K Fashion. “This was something we had struggled with, especially after launching our e-commerce site. With Criteo, we are confident in optimal marketing budget allocations and making the right business choices for ourselves and our customers.”

Retailers must also pay attention to mobile as the next frontier for increased user engagement and e-commerce sales. With more than seven out of ten consumers having made an online purchase via a mobile device in the past month, according to a Criteo survey, Vietnam is truly a mobile-first country.

OSIM seeking franchisee in Vietnam

Singapore’s OSIM, one of Asia’s largest providers of health and wellness massage products, is searching for a master franchisee in Vietnam with the VF Franchise Consulting Company in order to expand its international network.

Vietnam is part of OSIM’s expansion plans, as its healthcare services market is growing rapidly from rising demand.

“The minimum financial investment for each outlet is $100,000-$150,000,” said Ms. Chan Yee Pheng, Franchise Manager at OSIM. The company will also support after-sales and customer services.

Besides financial capacity, OSIM is seeking local franchisees who are passionate about healthy and happy living. Franchisees with retail experience and connections to shopping malls are the preferred option.

“Vietnam has shown sustained economic growth, with encouraging growth in the health and wellness sector,” said Ms. Chan Yee Pheng. “Vietnamese consumers share common Asian beliefs about traditional medicine and health practices. Massage is a traditional healthcare practice that we believe will resonate well with Vietnamese consumers.”

Vietnam now has around 53.4 million people of working age who are increasingly unwell, and this is a major opportunity for OSIM to become more deeply involved in the market. Moreover, “Vietnamese people spend billions of dollars every year on improving their health and wellness,” said Mr. Sean T. Ngo, CEO of VF Franchise Consulting.

“A growing number of Vietnamese citizens are travelling abroad, to countries like Singapore and Thailand, in search of advanced health services,” he added. “In order to take advantage of the fast-growing demand for these types of services, many foreign service providers and franchisors continue to seek further expansions or to enter Vietnam.”

PMI solid again in August

The Vietnam Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - ticked up to 51.8 in August from 51.7 in July, signaling a further modest monthly improvement in the health of the sector, Nikkei has said in a report.

The recent improvements in the domestic manufacturing sector continued in August, extending the current sequence of strengthening business conditions to 21 months. A solid and accelerated rise in new orders was central to the latest improvement in business conditions. New business has increased continuously since December 2015 while the rate of expansion in new export orders also quickened and was the fastest in four months.

Rising new orders led to another increase in manufacturing production for the tenth month in a row. The rate of growth was modest, but quicker than that seen in July, according to the report. Higher output requirements encouraged firms to take on extra staff. However, the rate of job creation was only marginal and the slowest in the current 17-month sequence of rising employment.

Staff shortages and rising new orders were reportedly factors leading to a second successive monthly rise in backlogs of work. Though easing from July’s 75-month high, the rate of accumulation was still one of the sharpest in the series’ history, according to the report.

Raw material shortages were a feature of the latest survey, contributing both to higher input costs and longer supplier delivery times. The rate of input price inflation quickened to a four-month high, and was sharp.

Despite the marked increase in input costs, firms continued to reduce their output prices in August. Charges decreased for the fourth month running, albeit only marginally. Purchasing activity increased at a faster pace, with the latest expansion linked to higher new orders. Stocks of purchases also rose; the 14th month running this has been the case.

Post-production inventories, on the other hand, decreased for the second successive month, albeit marginally. Panelists suggested that the dispatch of finished products to customers were behind the reduction.

The reported noted that business confidence improved in August and was the strongest since March. Anecdotal evidence suggested that firms were planning to increase output, helped by expansions in capacity and predictions of rising new orders. More than 56 per cent of respondents predicted a rise in production over the coming 12 months.

“Vietnam’s manufacturing sector continued to perform steadily mid-way through the third quarter of the year,” said Mr. Andrew Harker, Associate Director at IHS Markit, which compiles the survey. “There were further positive signs regarding new orders, which should help the sector maintain growth going forward.”

VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET