In June, the State Appraisal Council will submit the construction plan of phase 1 of Long Thanh International Airport to the prime minister for approval, three months after the deadline.  

Construction plan of Long Thanh International Airport to submit prime minister in this month
Although coming three months later than the required by the government, the authorities are still determined to kick off the construction of Long Thanh International Airport in the first quarter of 2021. This information was mentioned in the government’s recent report to the National Assembly.

According to the State Appraisal Council, the main reason of the delay was difficulties in land clearance and compensation to support resettlement. These difficulties are understandable because of the sheer scale of the airport.

At present, Dong Nai People's Committee is focusing on building two resettlement areas for residents in order to be able to hand over land to the investor to begin the construction of the first phase of the airport.

Long Thanh International Airport is one of 48 key transportation projects, 24 of which are already in operation.

The government asked the Ministry of Transport and relevant authorities to complete procedures to license aviation projects, especially those upgrading Noi Bai and Tan Son Nhat international airports.

Notably, from now to 2030, Noi Bai airport will have a third runway and passenger terminal with the capacity of 25 million passengers, increasing the airport's total capacity to 50 million passengers by 2030. After that, a fourth runway will be built, raising the total capacity of the airport to 90 million passengers.

Regarding Tan Son Nhat airport, in early May, a feasibility study for upgrading a runway was sent to the Ministry of Transport for approval. The required VND2 trillion ($86.96 million) of funds would come from the state budget. Accordingly, VND1.5 trillion ($65.2 million) would go to construction and the remainder to equipment purchases.

Runway 25R/07L, one of the airport's two runways, will be upgraded to handle larger modern aircraft that have been designed after it was built. This work is expected to take six months once approved, while other supporting infrastructure will be completed over the course of 14 months.

Tan Son Nhat airport handled over 40 million passengers last year, well over its designed capacity of 25 million. This runway upgrade is part of a plan to expand the facility's limit to 50 million passengers per year. A third terminal has also been proposed, though no work has begun.

Conference talks opportunities by EVFTA

A virtual conference was held in Hanoi on June 5, aiming to assists small and medium sized enterprises in the country to leverage the opportunities that the EU-Vietnam Free Trade Agreement (EV-FTA) brings along.

The Ministry of Industry and Trade said it has built a detailed plan to organize regular activities to support domestic enterprises to utilize all the opportunities that the EV-FTA can bring, especially amid the global markets greatly impacted by the CO-19 pandemic. This is also a chance to enhance the reconstruction of import-export market as well as supply chain.

One of the key task is to enhance supply industry program, international programs on trade promotion and national trademark,… to help small and medium enterprises connect with foreign firms and markets, fully entering the EU regional supply chain.

The ministry is actively communicating with EU on preparation for the implementation of the agreement, including building a procedure to issue tax quota for goods exported from Vietnam./.

Bac Giang applies technology to lychee exports to Japan

The northern province of Bac Giang is now entering into its lychee harvest. In addition to its traditional markets, this year it is also expected to ship its first batch of lychee to Japan, in early June.

Local authorities have been working closely with the Plant Protection Department at the Ministry of Agriculture and Rural Department and relevant ministerial agencies to apply technology to preserve and improve the quality of lychee exported by the Toàn Cầu (Global) Food Import Export Joint Stock Company. With these technologies, the lychee will maintain their shape, taste, colour, and nutritional value and extend their shelf life, meeting standards for export.

With this closed automation technology, the harvested lychee are scoured with hot water and soaked in a Vtreatment solution for five minutes. They will then be dried and packed into cardboard boxes of 5kg each, meeting all the requirements for export to Japan. After applying these technologies, the Toàn Cầu Food Import Export Company will ship around 800 tonnes of lychee to Japan, Australia, and Germany from the 2020 harvest.

The Plant Protection Department has inspected samples of preserved lychee to determine that they meet the requirements for export to Japan. After applying this procedure, the lychee can maintain their quality for 30 to 35 days.

Bac Giang has more than 28,000ha of lychee this year, with output estimated at over 160,000 tonnes, up 10,000 tonnes against 2019. The area of those grown under VietGAP and GlobalGAP standards will increase to 15,000ha. The application of technology to preserve the lychee for export to Japan is a positive sign that Bac Giang’s lychee can access other fastidious markets around the world.

Vietnam’s audiobook and podcast platform Voiz FM secures seed funding from 500 Startups

Voiz FM announced that it successfully raised an undisclosed seed amount from 500 Startups Vietnam. The audiobook and podcast platform has seen doubled growth in its user base in recent months, following a surge in demand as customers turn to audio media during the coronavirus quarantine.

Voiz FM was launched in late 2019 by a group of three Vietnamese co-founders to capitalise on opportunities in the emerging audio media space. According to Deloitte, the global audiobook and podcasting markets are set to grow to $3.5 and $1.1 billion in 2020, respectively. It demonstrates impressive annual growths of 25 and 30 per cent, compared to that of the broader global media and entertainment sector at 4 per cent.

Voiz FM started off with audiobooks. In contrast to a number of other Vietnam-based platforms making “easy money” from online piracy, Voiz FM has taken a long-term approach and attained copyrights for 100 per cent of its published content. In only six months, it has acquired exclusive publishing rights for more than 1,000 best-selling titles, partnering with top-tier publishers in Vietnam including First News, Kim Dong, and Tre Publishers, among others.

According to Binh Tran, general partner of 500 Startups Vietnam, the venture capitalist is bullish on the market opportunities as well as the team’s dedication to customers.

Voiz FM will spend the new funding on product development and market expansion. “Our product roadmap includes the launch of a recommendation algorithm in early July and an AI Voice functionality, which will allow users to choose their prefered voices for all titles, in October this year,” said Thai Tran, co-founder and CEO of Voiz FM. These developments are expected to further enhance its user experience and improve production productivity. The team also plans to expand to other Southeast Asian markets in the near future.

Vietnam’s tariff revenues reach nearly VND123.5 trillion in five months

The Vietnamese government’s revenue from customs duties in the first five months of 2020 was estimated at VND123.484 (US$5.3 billion), down 17.18% from the same period of 2019.
Data released by the General Department of Customs on June 6 showed tariff revenues in May stood at VND21.257 trillion (US$916.5 million).

Last month, Vietnam imported US$19.4 billion worth of goods while exporting US$18.5 billion, leaving a trade deficit of US$900 million.

However, total exports in the January-May period outstripped imports during the same time by US$1.88 billion, according to official data.

Due to the coronavirus pandemic, Vietnam’s total export and import turnover in the first five months of 2020 fell 2.8% from last year’s figure to an estimated US$196.8 billion.

Legislature and government taking measures to tighten budget management

Addressing concerns over the country’s financial situation, the National Assembly and the government have continued to highlight the strict management of the state budget this year, as the budget deficit will likely exceed initial expectations.

The government has officially reported to the National Assembly (NA) that in 2020, total state budget revenue may fall VND163 trillion (US$7.08 billion) as compared to initial estimates, leading to a budget deficit of 4.75% of GDP, up 1.31% against the initial target, and public debt will likely be 55.5% of GDP, up 3.2% against the initial goal.

The key reason is the poor performance of enterprises and a rise in government spending for overcoming the consequences of COVID-19.

This figure is estimated based on a forecast that the economy may grow 5.4% this year, and that global crude oil for the whole year will hover at US$30-35 per barrel, while the government will implement solutions on fee and tax exemption and reduction for enterprises, and no money will be collected from the equitisation and divestment of state-owned enterprises.

If the pandemic lasts longer and the economy grows less than 5% or even below 3% as predicted by some international organisations, state budget revenues will be far lower.

Prime Minister Nguyen Xuan Phuc ordered ministries, agencies, and localities to “strengthen financial and state budget discipline, with radical thrift in recurrent spending, and a cut-off point for costs for meetings and business trips.”

Under a draft resolution of the government on the tasks and solutions for removing difficulties for production and business, as compiled by the Ministry of Planning and Investment (MPI) and expected to be enacted soon, the government will cut 70% of costs for organising domestic and overseas meetings and business trips from May to December in relation to ministries, central agencies, and localities, excluding the ministries of Defence, Public Security, and Health.

“All revenue and expenditure from the state budget must be stringently controlled, while recurrent spending must be limited, with no money used for non-urgent activities,” PM Phuc stressed. “Ways must be found to mobilise all financial resources in society so as to support labourers, production, and businesses.”

Vu Hong Thanh, Chairman of the NA’s Economic Committee, also told the legislature that one of the most important things in order to effectively manage and use the state budget is to “decisively trim the recurrent spending of state agencies.”

According to the General Statistics Office, recurrent spending often accounts for nearly 70% of total budget spending. Last year it was VND928 trillion (US$40.35 billion), or 71.4% of the total state budget spending of VND1.3 quadrillion (US$56.5 billion).

In the first four months of the year, while total budget expenditure was VND472.1 trillion (US$20.5 billion) – up 9.8% on-year, recurrent spending hit VND291.6 trillion (US$12.68 billion) or 62%.

Also in the first four months, state budget revenue was estimated to be VND491.4 trillion (US$21.36 billion), down 6% year-on-year.

“This is due to many enterprises narrowing down their production and business activities, causing a decline in their contribution to the state budget,” said MPI Minister Nguyen Chi Dung.

A survey conducted in March by the National Advisory Council for Administrative Reform found that 74% of surveyed firms expected to have to shut down operations temporarily if COVID-19 is not fully controlled by June 2020.

The economy’s four-month index for industrial production rose only 1.8% year-on-year, with the mining sector decreasing 6.8% on-year, the MPI reported.

In one specific case, the average price of crude oil for April fell by US$20 per barrel or 33% against February, and in the first three months decreased 6% against the initial target of US$60 per barrel, and 14% against the same period last year.

PetroVietnam stated that such serious occurrences have led to its total March and first-quarter revenue of VND49 trillion (US$2.1 billion) and VND165 trillion (US$7.1 billion), equivalent to 80.8 and 91% of the initial plans, respectively.

“The group’s contribution to the state budget in March and the first three months of the year was VND6.5 trillion (US$282.6 million) and VND20.8 trillion (US$904.3 million), equivalent to 90.6 and 89.7% of the initial targets, respectively,” PetroVietnam said in a statement.

The reduction in global oil prices will likely result in a decline in Vietnam’s crude oil exports, causing a dent of VND7-17 trillion (US$304.3 million-739.1 million) to the country’s state budget revenue in 2020, reported the Ministry of Finance.

Big C Mien Dong to close down over site lease dispute

Thailand’s Central Retail, which manages and operates the Big C supermarket chain in Vietnam, announced yesterday that it will shut down the Big C Mien Dong in HCMC’s District 10 in the next 20 days, as it has failed to reach an agreement on the site lease with the landlord.

Given the impact of the coronavirus pandemic, the Thai retailer has made efforts to reach an agreement over the extension of the contract with the site lessor to maintain normal operations at the supermarket and support local consumers during the post-Covid-19 period, according to a Central Retail representative.

However, new suggestions from the lessor over the contract extension have left the retailer unable to fulfill its commitment to offer products at low prices to consumers, following which it decided to cease operating the supermarket.

After the shutdown, employees of Big C Mien Dong will continue to work at other Big C stores, the representative added.

Aside from Big C Mien Dong, other Big C supermarkets under the Central Retail Vietnam in HCMC include Big C Truong Chinh, Big C Au Co, Big C Phu Thanh, Big C An Phu and GO! Market.

The Thai retailer said that it will adopt measures to minimize the inconveniences caused to the loyal customers of Big C Mien Dong by continuously offering them shopping and direct-to-site delivery services via the hotline 1900 1880 or through online shopping apps such as Chopp and GrabMart.

Big C Mien Dong, which is located on To Hien Thanh Street, is among the first Big C supermarkets that French retailer Casino launched in the local market in 2003. Big C was then rebranded as Cora following an M&A deal between two French retailers. From 2016 onward, the Big C Vietnam supermarket chain was officially owned by Thailand’s Central Group.

Coteccons' largest shareholder calls for EGM

Singapore-based Kustocem Pte. Ltd., or Kusto, a major shareholder in Coteccons JSC (Coteccons) with a 17.55% stake, has initiated the process of organizing an extraordinary general meeting (EGM) to vote to change the  current board of directors of Coteccons and elect a new board.

Kusto is also seeking to undertake a special audit of the business activities of Coteccons related to the issues of conflict of interest and relevant party transactions, especially those between Coteccons and the other entities in the Coteccons Group since 2017.

Kusto Group, the parent company of Kusto, has been a long-term institutional investor in Vietnam for over 10 years, with its investments totaling over US$100 million.

“We strongly believe in Vietnam’s growth potential and a healthy investment environment. With regard to Coteccons, we have invested and supported the growth of the company over the past eight years. However, the governance and management concerning the conflict of interest among the companies within the Coteccons Group by the Coteccons executive management team has caused significant damages to our investment through a reduction in the share prices of Coteccons and a serious violation of our rights,” a representative of Kusto stated in a press release.

Kusto sent a written request to the Coteccons board of directors on April 23 and its board of supervisors on April 24 to request that an EGM be organized.

However, the board of directors failed to hold an EGM within the required deadline, while the board of supervisors acknowledged the failure of the board of directors to organize the EGM within the deadline.

The board of supervisors decided not to organize the EGM due to the lack of cooperation, obstruction and hindrance from both the board of directors and the management board, according to the press release.

Kusto, therefore, has full legal rights to act on behalf of Coteccons to convene the EGM as provided under Articles 136.5 and 136.6 of the Enterprise Law and Article 13.4 of the Coteccons Charter.

On June 1, Kusto wrote to the Vietnam Securities Depository Center requesting the Coteccons shareholder list as of June 22 to organize the EGM. Kusto also made relevant disclosures to the State Securities Commission and the Hochiminh Stock Exchange.

This is a result of many years of unsuccessful attempts by Kusto to dialogue with the Coteccons board of directors and resolve issues internally.

Central bank promotes pilot trials of fintech initiatives

The State Bank of Vietnam is introducing a draft decree on a fintech sandbox that will allow the pilot trials of a number of fintech services, such as peer-to-peer lending, open API, customer identification, blockchain apps and credit score, according to Thanh Nien newspaper.

The runtime for each initiative will be one to two years.

The central bank stressed that fintech plays a vital role in improving access to financial services for citizens, especially those who don’t have bank accounts or find it hard to access traditional banking and financial services.

However, the rapid development of fintech can pose several risks, such as money laundering, terrorism financing and risks related to the security and safety of personal data.

Therefore, Vietnam should launch a sandbox for fintech initiatives before officially putting them into service to reduce risks, boost innovation and protect users.

Sandbox is a testing environment that enables users to run programs and test software without affecting the application, system or platform on which they run. It is one of the most popular tools that many countries use to pilot fintech initiatives and foster innovation in the banking and finance sector.

The central bank is planning to submit the draft decree on the fintech sandbox to the Government this year and, if approved, banks and fintech companies would be able to join the fintech sandbox in 2021.

The central bank's data shows that the number of fintech companies in Vietnam has increased drastically from 40 in 2016 to 150 currently, mainly in the banking sector. In 2019, the country attracted over US$400 million in fintech investment, accounting for 36% of the total fintech investment of the Association of Southeast Asian Nations.

Vietnamese fabric exports excluded from Indonesia’s new tariffs

Indonesia's Ministry of Finance has imposed new tariffs on imports, effective from May to November 2022, to protect its local manufacturers due to the rising imports of fabric, fibers and curtains, but Vietnamese fabric being imported into Indonesia is not subject to the new taxes.

Under the Indonesian ministry’s Decree 56/2020, the levels of self-defense taxes are at 1,405 rupiah or US$0.93 per kilogram from May 27 to November 8, at 1,193 rupiah per kilogram from November 9 to November 8, 2021 and at 979 rupiah per kilogram from November 9, 2021, to November 8, 2022, according to VietnamPlus news site.

Several countries and territories, including Hong Kong and South Korea, are exempted from the new tariffs on synthetic fibers and curtains, while the fabric exports from India and Vietnam to Indonesia are not affected by the new taxes.

Last year, the Indonesian Government imposed temporary duties of up to 67.7% on textile and garment imports to protect its locally manufactured products and encourage domestic consumption.

Moody’s has warned that the U.S.-Sino trade tensions will possibly prompt a shift in fabric, fibers and apparel products from China to Southeast Asia including Indonesia, hindering the stability of demand and supply and hurting local producers.

The United States has levied a 25% import tax on China’s textiles and garments, higher than the levels of 10-15% being applied by Indonesia.

Hanoi targets to have 700 products reaching “One Commune, One Product” standards in 2020

The city is among the top localities in deploying the “One Commune, One Product” (OCOP) program.

Hanoi targets to have 700 products certified as meeting the One Commune, One Product” (OCOP) standards by the end of 2020, according to a latest report from the Ministry of Agriculture and Rural Development (MARD).

 Hanoi targets to have 700 products certified as meeting the OCOP standards by the end of 2020.
According to the MARD, Hanoi is one of the leading localities in implementing the OCOP Program in the 2019-2020 period. As of May, the city has 300 products certified as meeting OCOP standards, equivalent to 17.6% of total OCOP products in the country. 

The city has also submitted six products for being labeled with five stars, the highest quality certification of the OCOP Program. 

As of the end of May, as many as 1.711 products from 32 provinces and cities have received star certifications at different levels, reaching 71.3% of the plan of acknowledging 2,400 products. 

The OCOP program promotes advantageous agricultural, non-agricultural, and service products in each locality based on value chains, which will be realized by private and collective economic sectors.

The program focuses on six groups of goods and services including food, beverages, herbs, souvenirs-furniture-decorations, fabrics-apparel, and rural tourism services. OCOP products are ranked into five levels, of which the five-star level is the highest and meets international standards.

In 2019, the Hanoi People’s Committee issued Decision No.3629 on the implementation of OCOP program in the city until 2020, aiming at consolidating the management system for the program; and providing training courses for all program managers, registered organizations, enterprises, cooperatives and households.

Hanoi has the most craft villages in the country with 1,350, nearly one-third of the total number. It also leads the country in using QR codes to trace the origins of agriculture, forestry, fishery and food products.

Approved in May 2018, the national OCOP program aims to develop the rural economy as a way to realize the national target of building "new style" (modern) rural areas. So far, there have been 5,177 communes nationwide (accounting for 58.2% of the total number of communes) classified as the new rural areas, an increase by 113 communes compared to April. 

In addition, there are 168 communes meeting enhanced rural standards and nine communes classified as exemplary new rural areas according to the regulations of the Prime Minister.

The country has 126 out of 664 districts in 45 provinces and cities recognized by the Prime Minister as fulfilling the new rural area construction (accounting for about 18.9% of the total districts nationwide).

Low credibility hinders development of e-commerce in Vietnam

Up to 90% of online shoppers in Vietnam still prefer cash payment over online transactions, mainly due to security concern and a preference to check product quality before paying.

While e-commerce has become an indispensable part of enterprises’ operation since the Covid-19 outbreak, the lack of trust from customers, among other issues, is hindering its development in Vietnam, according to Le Xuan Sang, deputy director of the Vietnam Institute of Economics.

“A more favorable legal environment, high quality human resources and credibility are key factors that could help boost local enterprises’ competitiveness through e-commerce,” Sang said at a conference on June 2.

On this issue, Le Duc Anh, director of the Center for Information and Digital Technology of the Vietnam E-commerce and Digital Economy Agency, said 90% of online shoppers in Vietnam still prefer cash payment over online transactions, mainly due to security concern and a preference to check product quality before paying.

“This shows that customers have not placed their trust on sellers, the products, customer services and prices, among others,” Anh added.

Referring to Amazon, Anh said that without having to adverstise, this website is still the top choice for customers globally.

Moreover, people are visiting the platform to see reviews of products, this is due to the fact that Amazon allows sellers to review buyers and vice versa.

For Vietnam to take advantage of e-commerce as a way to enhance businesses' competitiveness, Anh said they have to build trust among their customers.

“It is essential that customers feel safe during their online shopping experiences, from information verification, dispute settlement, delivery quality and secure payment,” Anh stated.

Economist Vo Tri Thanh, former vice director of the Central Institute for Economic Management (CIEM), expected the government to soon finalize a legal framework and regulations for e-commerce and cashless payment activities.

A clear and predictable legal environment would encourage more enterprises to take part in e-commerce and enhance their competitiveness, Thanh added.

Statistics showed Vietnam’s ecommerce market has been growing at annual rates of 30 – 40% during the 2015 – 2018 period, taking the total revenue from US$4 billion to US$8 billion.

The figure is forecast to hit US$13 billion in 2020, higher than the estimate of the national plan for Vietnam’s ecommerce development in the 2016 – 2020 period which expects a market size of US$10 billion by 2020.

It is estimated that nearly 40 million smartphone subscribers and internet users have shopped online in Vietnam.

Under a national plan for the development of e-commerce by 2025 released on May 18, the Vietnamese government set the target of achieving  around 55% of the population shopping online with an average spending of US$600 annually by 2025.

Revenue from online sales of business-to-consumer e-commerce, known as B2C e-commerce, is set to grow by 25% per year to US$35 billion, accounting for 10% of total goods retail sales and service revenues.

Meanwhile, the government expects the share of population using related services, including non-cash payment services, would be at 50%, and through intermediary payment services at 80%.

By 2025, 80% of e-commerce websites should be integrated with online shopping and 70% providing e-invoices.

Notably, Hanoi and Ho Chi Minh City would make up half of e-commerce revenues in the next five years.

According to GlobalData’s 2019 Banking and Payments Survey, cash is still the most preferred payment mode for e-commerce purchases in Vietnam, accounting for 35.6% in 2019. Alternative payment solutions are gradually gaining ground and accounting for 15.5%. MoMo is the most preferred alternative payment solution in Vietnam, followed by PayPal.

Vietnam enhances trade remedy capacity in anticipation of EVFTA

The EU-Vietnam Free Trade Agreement (EVFTA) is awaiting approval of the Vietnamese National Assembly, which marks Vietnam’s great strides in international economic integration.

Including the EVFTA, Vietnam has engaged in 14 FTAs, according to the Ministry of Industry and Trade. With such an extensive and intensive engagement in FTAs, trade remedy measures are crucial to the national economy as well as enterprises, as they are legal and effective tools to support domestic producers compete with rising imports.

The EVFTA includes articles stipulating the use of traditional trade remedy tools in the World Trade Organisation (WTO), along with regulations on the imposition of lower anti-dumping and anti-subsidy tariffs, which are not compulsory in the WTO.

It is noteworthy that under the agreement, the two sides will not levy anti-dumping and anti-subsidy measures if the imposition brings no benefits to the public.

To ensure that tax reductions cause no shocks to domestic production, the deal also stipulates bilateral trade remedy mechanisms within a transitional period of 10 years.

Aware of the need to strengthen trade remedy capacity while joining new-generation FTAs, the MoIT has made active preparations like perfecting the investigation apparatus, with the establishment of the Trade Remedies Authority of Vietnam in August 2017.

At the same time, Vietnam has completed legal foundations for the investigation and settlement of trade defence cases.

The ministry is expected to issue a circular guiding the imposition of trade remedy measures in accordance with the EVFTA, while stepping up the communication work to popularise trade remedy laws in general and relevant regulations under the EVFTA in particular.

Other measures taken by the ministry include training and legal assistance to enterprises, and building inter-sectoral and inter-ministerial coordination mechanisms.

It is also implementing a project on the early warning system for trade remedies, along with enhancing State management on the prevention of trade remedy evasion and origin fraud in international trade.

Coordination and information sharing mechanisms between authorised agencies of Vietnam and the EU have also been established to deal with trade remedy cases./.

Online solutions providers gain traction in surging online market

With e-commerce surging during the COVID-19 pandemic owing to changing consumer shopping behaviour, solution providers like Sapo and EcomEasy have been making tremendous gains as online shopping rises.

Most recently, Sapo Technology JSC, which provides multichannel e-commerce management tools for online sellers, has completed its latest funding round and received seven-digit investment (in US dollars) from South Korean Smilegate Investment and Vietnamese Teko Ventures. The firm will use the funds to develop and strengthen its payment and financing services.

According to Dung Le, director of growth at Sapo, the COVID-19 outbreak and social distancing have led consumers to make online purchases more frequently instead of buying in store. Vendors also had to follow government regulations and temporarily closed physical stores, as well as prepared masks and hand sanitiser for shippers, while ensuring minimum distance between customers and staff.

On the other hand, they stock on-demand products and increase selling on social media and online marketplaces. This creates additional demand for omnichannel sales management software like Sapo.

Additionally, EcomEasy, a startup providing marketing and sales solutions for e-commerce has also received funding from Viet Valley Ventures. It focuses on e-commerce and live streaming tech to help more brands increase sales through multiple e-commerce platforms and different means of shopping, from image-based advertising to keyword optimisation and then live streaming.

Nguyen Tran Bich Ngoc, CEO and co-founder of EcomEasy said that the move from offline to online goes faster than ever before. The annual growth rate of online shopping is 25 per cent, based on a Nielsen study from 2019, while in 2020 it is estimated to reach above 30 per cent. At some brand partners of EcomEasy where the online channel usually contributes 3 per cent of total retail sales, in the first quarter and in the middle of the second quarter of 2020 this figure increased to 5 per cent.

“We help brands make e-commerce easier. In particular, we help them set up their official stores on platforms like Shopee, Lazada, Tiki, or Sendo –  even Alibaba. Then we help manage these stores to sell and run marketing campaigns to get new customers and get sales for brands through reasonable investment,” Ngoc explained. 

Julien Brun, managing partner of CEL Consulting highlighted four critical factors for success for online distribution service providers to scale up their presence. According to him, these companies need to ensure data integrity because a system is as good as the data these companies put into it. Additionally, solution providers should provide forecasting capabilities by using historical data to foresee what could happen in the near future, which is a feature that will become more and more popular.

Furthermore, most solutions offer a lot of various modules that tend to be rather limited and sometimes unusable. Most of these companies will have to figure out what in their solution portfolio has more usage, more value add, and focus on these specific capabilities instead of trying to cover a wide amount of functions. Also, the ability to integrate to other cloud-based solutions seamlessly is necessary.

These solutions are comparable to Kiotviet's, which has been in the business for a while and has a large customer base already. Other foreign players like Odoo (more focused on enterprise resource planning with multi-channel capabilities), Atemiscloud (more focused on client relationship management) or more established ones like Oracle are also present in the market, yet no clear leader nor innovator can be identified at this stage. 

Workers are returning to work, for now

Some 70,000-80,000 workers across the country have returned to work since the mass disruption caused by the novel coronavirus in Vietnam, said Deputy Minister of Labour, Invalids and Social Affairs (MOLISA) Le Van Thanh at an online conference held on June 3 to discuss and share experience in job creation and sustainable business in the new normal [after COVID-19].

During the first four months of 2020, it was estimated over 5 million workers in Vietnam either lost their jobs, had their work hours reduced or suffered income loss, said Thanh. A MOLISA survey said 67 percent of all businesses had to lay-off part of their workforce while up to 80 percent of businesses in the informal sector had to suspend their operations for up to a month in compliance with social isolation regulations.

The survey also showed one of the lowest labour participation rates ever recorded during the first quarter of 2020 with just over 75 percent.

The deputy minister said in the coming months more workers will likely return to work but there are steps that must be taken to ensure a smooth and more efficient process.

On MOLISA’s part, the ministry has been working to upgrade its existing job-seeker website to a national job portal to connect workers and potential employers and vocational schools.

The Government has also reserved a budget up to 5 trillion VND (216 million USD) to retrain and reskill workers to help adapt the Vietnamese labour force to new changes in the job market.

Sam Haggag, managing director of Asia Pacific for ManpowerGroup – one of the world’s largest staffing firms – said governments, businesses and union organisations play important roles and must work together to prepare the workforce for the new normal.

Haggag said an organised return of the workforce is key to economic recovery, citing significant resources and efforts invested by industries including airlines, logistics and transport in Singapore, Malaysia and Thailand.

Simon Matthews, director-general of Vietnam, Thailand and the Middle-East, said by 2020, 84 percent of businesses will require workers to upgrade their skillsets, according to industry forecasts. This, in turn, will require fresh approaches to human resource development and hiring policies.

Nguyen Thi Quyen, deputy head of MOLISA’s Department of Employment, said the country must prepare for different scenarios with the job market.

While the country will likely see more workers returning to work in the near future, the COVID-19 pandemic is unprecedented and hard to predict. In a worst-case scenario, up to 100,000 workers could lose their jobs within a month with up to 80 percent of businesses forced to lay-off 7.2 million staff./.

Rice exports grow in both volume and value

Vietnam had exported over 2.6 million tonnes of rice as of May 15, a year-on-year rise of 8 percent, according to the General Department of Vietnam Customs.

The Philippines topped the list with 902,100 tonnes, followed by China 237,500 tonnes, Malaysia 220,700 tonnes, and Ghana 124,200 tonnes.

The export turnover of the grain was estimated at over 1.2 billion USD, up 21.7 percent compared to the same period last year.

Despite growth in both volume and value in January-May, rice exports this year are forecast to face a number of difficulties, especially drought and saltwater intrusion in the Mekong Delta - the nation’s largest rice granary, according to insiders.

Vietnam’s rice has been shipped to 150 countries and territories around the world.

In 2019, the country exported 6.37 million tonnes of rice worth 2.81 billion USD, up 4.1 percent in volume, but down 8.4 percent in value year-on-year.

K-Research revises down Thailand’s GDP projection to minus 6 pct

The Kasikorn Research Centre (K-Research) has revised down its economic projection for Thailand to minus 6 percent from the previous minus 5 percent amid a highly uncertain global economy.

Though Thailand’s first quarter GDP fared better than expected, the economy is expected to see a sharp contraction during the remainder of the year, with rising unemployment, assistant managing director Nattaporn Triratanasirikul said at press conference on June 2.

Meanwhile, the overall global economy remains a concern given the high level of COVID-19 infections reported daily and thorny US political issues, both domestic and international, K-Research said while cutting its 2020 GDP projection to minus 6 percent.

A K-Research survey using a random sampling of 1,000 Thais shows that the respondents are worried about looming uncertainties and this has prompted them to boost savings and tighten spending even more.

As evidenced, household spending has contracted more sharply than the previous estimate, K-Reasearch said. However, because the level of public debt is not presently a cause for concern, the government still has sufficient fiscal resources to assist ailing businesses after the lockdown has been eased.

The tourism, automotive and property industries are three important sectors that will require more time to recover than others, said Kevalin Wangpichayasuk, another K-Research assistant managing director.

In terms of employment, the government may need to focus its relief measures on the tourism industry, with priority being placed on the most affected travel-related businesses and workers, because the sector employs as many as 4 million people, K-Research said. Overall, major Thai businesses may take more than a year to recover to their pre-COVID-19 levels, it warned.

The Bank of Thailand’s monetary policy is another important tool that could prove useful in case the situation worsens, and there is leeway for further reduction of the policy rate. Nonetheless, the current situation has not yet hit a level that would require the implementation of a negative interest rate policy, K-Research added./.

Malaysia’s auto sales forecast to drop 28 percent in 2020

The closures of factories and sales outlets during the Movement Control Order (MCO) will result in an estimated 28 percent drop in new vehicles sales this year.

In making the forecast, Malaysia Automotive, Robotics and IoT Institute (MARii) said 2020 was no longer a year of profit for the automotive sector, but rather a year of survival, the New Straits Times reported.

"In order to sustain the industry for the year ending 2020, MARii estimates that a TIV of at least 500,000 units is needed, in order to ensure that automotive businesses do not fall into crisis," MARii chief executive officer Datuk Madani Sahari said in a statement on June 3.

"While it is understandable that consumer sentiment remains cautious due to the current economic challenges, we must also understand that the economy's sustainability is dependent on consumer spending," Madani added.

Last year, a total of 604,287 new vehicles were sold, an increase of 5,689 units, or about one percent over the 598,598 units recorded in 2018.

According to a study conducted by MARii, temporary measures had shown an increase in vehicle purchases in the past.

The previous measures such as tax holiday had pushed vehicle sales by 3.8 percent year-on-year.

Madani said innovative incentives can be introduced to lower buyers' commitment to own a car.

This could include a temporary waiver on down payments (100 percent loan on vehicle), reduced loan interest rates and joint subsidies between carmakers and the government for road tax and insurance for a limited time period.

He said a combination of the incentives would remove the burden to buy a car.

At the same time, this will not affect purchasing power as there will be a negligible difference between the monthly repayment amount for car buyers, at any level or segment.

The study said other innovative mechanisms can also be introduced, such as "subscription-style ownership" – in which a car is leased based on certain conditions from the carmaker for a period of time before ownership is transferred to the buyer.

For owners of very old vehicles, voluntary scrap incentives by the carmaker can also be made an option, where the main benefit is a newer, safer vehicle with the latest technology for the new car owner.

"MARii believes that it is important to stimulate demand through the introduction of incentives to reduce consumer anxiety and address their concerns in purchasing vehicles, especially when they need to purchase new vehicles to continue on with their daily routines," it said.

There are currently 27 original equipment manufacturers (OEMs) operating in Malaysia, with 641 parts and components suppliers depending on continued economic activity along the automotive value chain.

The automotive sector employs around 700,000 people, which make up a significant portion of the manufacturing sector in the country.

According to the Department of Statistics, 30 percent of the manufacturing sector's workforce has been impacted by the COVID-19 economic slowdown, and are receiving half-pay, unpaid leave or have lost their jobs./.

Vietnam Airlines to open two new domestic routes

National flag carrier Vietnam Airlines will open two new routes this month connecting Vinh city in the central province of Nghe An with Phu Quoc Island in the Mekong Delta province of Kien Giang and Nha Trang city in central Khanh Hoa province.

The new routes are expected to meet the increasing travel demands during this summer holidays and contribute to promoting domestic tourism in the post-COVID-19 period.

There will be four round-trip flights between Vinh and Phu Quoc every week on Mondays, Wednesday, Fridays and Sundays, starting from June 12. Meanwhile, three round-trip flights will be conducted each week on the Vinh-Nha Trang route on Tuesdays, Thursdays and Saturdays, from June 22.

The carrier said that to mark the opening of the new routes, it will offer 6,666 tickets at just 66,000 VND (2.8 USD) each one-way, equivalent to 546,000 VND including taxes and fees. They will be available from June 6 to 12 for flights until December 31, 2020.

Vietnam Airlines has launched 13 new domestic routes, including the two above-said ones, in May and June, raising its total domestic routes to 54.

The carrier has fully recovered all of its domestic routes with about 300 flights each day./.

Malaysia announces 8.2-billion-USD plan for economic recovery

Malaysian Prime Minister Muhyddin Yassin on June 5 announced a short-term economic recovery plan worth 35 billion RM (8.2 billion USD), to help the country’s economy recover from the impact of the COVID-19 pandemic.

The plan, including 40 initiatives, mainly focuses on how to empower people, propel businesses and stimulate the economy.

Accordingly, the plan will give priority to supporting workers and small and medium-sized enterprises (SMEs) through training programmes, social support, financing schemes, boosting domestic consumption and supporting industries impacted by the outbreak and the movement control order (MCO).

This is the government’s third stimulus package to cushion the impact of the disease and its lockdown measures.

Muhyddin previously announced a 250-billion-RM (nearly 60 billion USD) financial support package to help local businesses promote production and business, stimulate consumption demand, and ensure social welfare for people.

On April 6, Malaysia approved an additional incentive package for SMEs worth 10 billion RM (2.3 billion USD).

The Malaysian Ministry of Health announced on the same day that the country recorded 19 more COVID-19 cases and one death, bringing the total of infections and fatalities to 8,266 cases and 16, respectively./.

Northern localities boost links to kick-start tourism demand

A seminar on enhancing links and cooperation between northern provinces and cities to stimulate post-pandemic tourism demand was held in the north-central province of Ha Tinh on June 5.

Jointly organised by the provincial Department of Culture, Sports and Tourism and the Ha Tinh Tourism Association, the seminar aimed to help the tourism sector overcome difficulties posed by the COVID-19 pandemic.

Participants discussed solutions to promote destinations, develop tourism clusters, and stimulate tourism demand.

They also focused on measures to tap into the tourism potential and advantages held by localities to further develop sustainable tourism towards ecotourism, cultural tourism, and high-end tourism, to ensure stable growth in the sector.

Cooperative agreements were also signed between tourism service providers in Ha Tinh and representatives of 15 travel agents in the northern region.

Conference seeks ways to promote lychee consumption

The People’s Committee of northern Bac Giang province in coordination with the Ministries of Industry and Trade, and Agriculture and Rural Development organised a teleconference on promoting lychee consumption at home and abroad on June 6.

The conference linked Bac Giang with 61 sites in cities and provinces across the country, and four sites in China, with more than 2,300 participants.

During his visit to Bac Giang, Prime Minister Nguyen Xuan Phuc cut the ribbon for the first trucks of lychee to be delivered to the domestic and foreign markets.

Speaking at the online meeting, Vice Chairman of the provincial People’s Committee Lai Thanh Son said with a total area of 28,000 ha, Bac Giang harvests 150,000-200,000 tonnes of the fruit each year. This year’s output is estimated at 160,000 tonnes.

Up to 15,000 ha of lychee have met VietGAP standards while 218 ha satisfy GlobalGAP standards, he said, stressing that Japan has issued 19 lychee growing area codes and China granted 149 lychee growing area codes and certified 288 packaging facilities in Bac Giang.

Bac Giang plans to sell half of the lychee in the domestic market and the rest for export, according to the official.

Son expressed his hope to welcome more domestic and foreign businesses and traders, pledging that Bac Giang will facilitate lychee growing, harvest and consumption.

Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said Bac Giang has paid more attention to good agricultural practice and food safety. Therefore, its lychee has conquered picky markets and Bac Giang lychee brand name has been protected in eight countries.

A Chinese businessman told the conference that Bac Giang lychee is now famous in China and favoured by consumers in that country thanks to its good quality.

Other delegates at the meeting suggested the border provinces of Lao Cai and Lang Son coordinate with Chinese authorities to facilitate lychee export, especially in terms of administrative, quarantine and customs procedures.

Deputy Minister of Industry and Trade Do Thang Hai said his ministry will join hands with overseas Vietnamese agencies and instruct commercial affairs offices abroad, particularly those in China, Singapore, Australia and Japan, to promote lychee and boost connectivity in lychee export./.

Businesses have significant role to play in optimising EVFTA: seminar

It is businesses that decide whether the EU-Vietnam Free Trade Agreement (EVFTA) can bring about economic benefits, heard a seminar in Ho Chi Minh City on June 6.

Chu Tien Dung, Chairman of the HCM City Union of Business Association, said the agreement’s terms regarding tariff cut and market opening have paved the way for businesses.

However, the enterprises’ completion of the set targets depends on their preparations of human and material resources, he added.

The official suggested the businesses study commitments, especially those on product origin and technical standards, made by Vietnam and partners, in order to get tax incentives.

At the same time, they should scope out foreign markets to understand their taste and demand, which can help them make orientations for their production, he said.

Johnathan Hanh Nguyen, Chairman of IPP Group, pointed to the lack of connectivity between enterprises in utilising opportunities to be generated by the agreement.

Big firms need to carry forwards their role in assisting smaller ones in the business network, thus promoting joint strength and bringing into full play incentives of the EVFTA, he said./.

Bac Giang urged to pursue intensive growth model

Prime Minister Nguyen Xuan Phuc on June 6 asked the northern province of Bac Giang to pursue an intensive growth model and optimise its advantages in geographical location, culture and human resources to develop sustainably.

At a working session with the provincial leaders, the PM lauded Bac Giang’s performance in economic growth, per capita income, budget collection, investment attraction, new-style rural area building, education, smuggling combat, and national defence and security.

Despite the impact of the COVID-19 pandemic, the province still grew 7.4 percent in the first quarter of this year, which reflects great efforts and high determination of local authorities and people, he stressed and urged Bac Giang to complete the dual goals of boosting production and containing the pandemic, saying the province needs to further remove difficulties faced by businesses and locals.

The province should quickly submit its socio-economic development plan for 2021-2030 to the PM for approval, he went on.

PM Phuc, however, pointed to Bac Giang’s reliance in FDI, untapped potential, poor attention to entertainment services and trade union activities, along with issues regarding land, transportation, logistics, agricultural production, vocational training and urban development.

Given this, the province needs to utilise its labour advantages, pay more heed to high-tech, e-commerce, digital economy and infrastructure, towards a smart economy.

Agriculture holds a competitive edge in Bac Giang, he said, suggesting the locality build a modern and sustainable agricultural sector, focusing on organic and clean agricultural production.

The Government leader also urged the province to pour more investment in tourism, and create breakthroughs in infrastructure, including digital infrastructure.

During his stay in Bac Giang, Phuc visited an orchard named after late President Ho Chi Minh in Tru Huu commune, Luc Ngan district, and a national relic complex in Tien Luc commune, Lang Giang district.

Bac Giang is home to the largest area of lychee, with about 28,000 ha. The province harvests 150,000-200,000 tonnes of the fruit each year. This year’s output is estimated at 160,000 tonnes.
Up to 15,000 ha of lychee have met VietGAP standards while 218 ha satisfy GlobalGAP standards. Japan has issued 19 lychee growing area codes and China granted 149 lychee growing area codes and certified 288 packaging facilities in Bac Giang./