September PMI down to ten-month low

The headline Nikkei Vietnam Manufacturing Purchasing Managers’ IndexTM (PMI®) - a composite single-figure indicator of manufacturing performance - dropped to 51.5 in September from 53.7 in August. The rate of improvement in the health of the sector has now eased for three successive months, with the latest strengthening of business conditions the weakest since last November. That said, operating conditions have now improved in each of the past 34 months.

“As was the case throughout the third quarter of the year, growth in Vietnam’s manufacturing sector moderated during September,” said Mr. Andrew Harker, Associate Director at HIS, which compiles the PMI. “While remaining positive overall, demand conditions are clearly less buoyant than they were during Q2. The rate of input cost inflation also continued to moderate, providing some room for firms to reduce selling prices in order to help secure new business. In fact, charges were lowered for the first time in over a year during September.”

The end of the third quarter of the year saw a further slowdown in growth momentum in the Vietnam’s manufacturing sector. Weaker increases in output, new orders, and employment were all recorded, while firms offered discounts to try and attract customers. They were able to do this thanks to a moderation in the rate of input cost inflation. On a positive note, business confidence rebounded from August’s low.

Central to the fall in the PMI in September were slower rises in both output and new orders. Manufacturing production rose at the weakest pace since March, with growth easing for the third month running. This was also the case with regard to new business, which nonetheless continued to rise solidly due to improving customer demand. Meanwhile, new export orders rose modestly, to the slowest extent in 16 months.

Slower new order growth meant that firms were able to work through backlogs of work in September. Outstanding business decreased for the fourth month running.

Manufacturing employment increased in the month, as has been the case throughout the past two and a half years. That said, the rate of job creation was slight, easing to its weakest since August 2017.

On a more positive note, business confidence rebounded from the record low seen in August. Company plans and expected growth in new orders supported optimism that output will increase over the coming year.

Although input prices continued to rise at the end of the third quarter, the rate of inflation slowed and was weaker than the series average. Weaker cost inflation enabled firms to reduce their output prices, ending a one-year period of increases. According to respondents, efforts to secure sales amid competitive market conditions were behind the fall in charges.

Manufacturers continued to raise purchasing activity in line with higher new orders, but the rate of expansion softened to a six-month low. The rate of accumulation in stocks of purchases also slowed, and was only fractional. Meanwhile, stocks of finished goods decreased for the first time in three months.

Finally, suppliers’ delivery times were unchanged in September, following a slight lengthening in the previous month. Some panelists saw lead times improve due to requests to suppliers for faster deliveries. Conversely, other firms indicated that raw material shortages led to delivery delays.

Vietnam Frontier Summit 2018 on way

The Vietnam Frontier Summit (VFS) 2018, the largest event on frontier technology in Vietnam, will be held on October 6 in Hanoi. More than 2,000 attendees, tech startups, and organizations will discuss trends in frontier technologies such as AI, VR/AR, blockchain, and IoT and the impact of these technologies on other industries.

This year’s summit will gather together the brightest minds in Vietnam and Southeast Asia to achieve the following three objectives: strengthen and support frontier tech startups in building a sustainable business; create strong connections between and synergy among stakeholders in the frontier tech ecosystem; and promote frontier tech such as AI, IoT, blockchain and AR/VR and the application of these technologies in actual projects.

“It’s an exciting time for startups in Vietnam,” said Ms. San Luu, Deputy Director at Innovatube. “Asia’s rising dragon has been hit by a strong wave of corporate innovation this year, which saw at least three corporate acquisitions and multiple corporate-startup engagements being announced.”

Another general observation, she went on, points towards traditional retail and institutional investors increasingly exploring tech startups as an alternative investment. There is a growing league of angel investors and syndicates forming as startup news penetrates mainstream media. With these trends backed by macroeconomic fundamentals and a strong base of tech talent, the Vietnam Frontier Summit is back for the second year running and aims to showcase Vietnam as a burgeoning tech hub in Southeast Asia.

“As organizers of VFS 2018, we believe that Vietnam, with its great pool of strong computer science talent and strong entrepreneurship, will become the next hub of frontier tech in Southeast Asia,” Ms. San said. “The partnership with e27 - Asia’s leading tech media platform - will help people in the region become more aware of the deep tech ecosystem in Vietnam.”

Market highlights have included transportation group Phuong Trang acquiring ride-hailing app VATO (formerly VIVU), the BMG real estate group acquiring proptech startup AMI, domestic conglomerate Vingroup acquiring healthcare startup Vicare, ACB Bank hosting the inaugural “Bank Without Walls” Hackathon, and investment management firm VinaCapital launching a $100 million venture capital fund.

Office for lease in high demand

The transformation of the office market and office occupiers' growing care to consider office occupancy costs were the key topics of a seminar held on September 27 in Ho Chi Minh City.

The exclusive seminar provided invaluable insights from industry leaders as well as networking opportunities with experts, delivering in-depth updates on regional and Vietnamese office trends.

Adam Evennett, regional director worldwide occupier services, Savills Asia-Pacific, commented that during the first half of 2018, regional Grade A office rents sustained strong performance, led by Hong Kong and Tokyo, with prices continuing to rise. Regional market risks include core vs. non-core commitments, price sensitivity, as well as flexibility.

Neil MacGregor, managing director for Savills Vietnam, added that after Grade A rental grew by more than 7 per cent in 2017, momentum has continued in 2018 and is set to remain at record levels well into 2019 and beyond.

“It is crucial for office occupiers to carefully analyse their office needs, plan ahead, and manage future occupancy costs effectively,” said MacGregor.

Providing an introduction to Atlas—a co-working space in the future Grade A Alpha Town office building—Tu Thi Hong An, associate director, commercial leasing at Savills Ho Chi Minh City, expressed confidence that Vietnam has the potential for unprecedented growth in the office sector.

“The Vietnamese market has the potential for the development of more sophisticated office projects, following all current global megatrends. The design, resources, and functionality of offices will change completely in the coming years. If you consider all the demand drivers and the requirements of today’s modern office occupiers, the opportunities are infinite,” said An.

Meanwhile, Yann Deschamps, head of Workthere, stated that the upsurge of co-working spaces has set a new milestone in the office market.

“Co-working is not only about the sharing of infrastructure and costs, it is about belonging to a community. Spaces are designed to provide a productive and collaborative environment for dynamic inhabitants and created without corporate constraints on what is perceived to be an “office” environment,” said Deschamps.

He added that the co-working realm is evolving faster in Asia than the rest of the world, and flexible workspaces will account for 15 per cent of the total office supply in Southeast Asia by 2030.

In Hong Kong, there are now more than 300 flexible workspaces, whilst Singapore hosts 176 spaces. Five major brands (TEC, Regus, CEO Suite, WeWork, and Fast Five) account for 80 per cent of the total co-working and serviced office space in Seoul, whilst Kuala Lumpur currently has 100 flexible workspace centres operated by more than 60 operators. Major players are now seeking future markets, such as Vietnam, Bangkok, and Jakarta.

In Vietnam, the number of co-working spaces rose by 62 per cent in 2017, driven by growth in startups and the need for cost-effective spaces, whilst the entry of international operators like Atlas will usher in a period of partnership agreements and mergers and acquisitions.

The first half of 2018 saw the Vietnamese office sector witnessing record occupancy levels with strong tenant demand, limited new supply, and rapidly growing office rents.

Binh Duong selected to host 20th World Technopolis Association

A series of events to celebrate the 20th anniversary of World Technopolis Association (WTA) will be held in Binh Duong from October 10 to 12, 2018.

The events will welcome over 1,000 government officials, scholars, and business representatives from more than 50 countries and territories. Binh Duong is selected as the host of the WTA 2018 Summit right after becoming WTA’s official member, adding to the international status of the province.

WTA is a multilateral international organisation created with the purpose of connecting the advancement of science and technology with local development, to achieve a shared development through cooperation and exchanges among science cities. The development of science and technology leads directly to the welfare and prosperity of mankind.

The first General Assembly of WTA was held in South Korea’s Daejeon city in September 1998, marking the official launch of the organisation with the 23 founding members from 10 countries, including the International Association of Science Parks (IASP) and other related organisations. The members discussed international cooperation and exchange for science and technology park development.

At the first assembly, they also proclaimed WTA’s vision of sustainable technopolis development. WTA has a triangular approach known as the Triple helix model (state – academia – businesses).

Since 1998, the General Assembly of WTA has been held every two years and has been promoting mutual cooperation and exchange among member cities.

WTA has now 106 members from 48 countries and territories. In addition to Binh Duong, there are four Southeast Asian nations in this association, including Indonesia, Philippines, Malaysia, and Cambodia (Cambodian Royal Institute).

In recent years, Binh Duong has made great strides in the strategy of creating a socioeconomic breakthrough and smart city development based on the Triple helix model.

Over the past 10 years, the relationship between Binh Duong province and South Korea’s Daejeon city has reached a new height, with links to scientific research-technology, expert exchange, and strategic economic cooperation. From here, Daejeon introduced Binh Duong and cooperated with the province during its accession to the WTA, as well as supported it to host the upcoming WTA 2018 Summit.

On the occasion of the visit of the delegation of Binh Duong leaders to Daejeon city in August 2018, Her Tae Jeong, the new Mayor of Daejeon city cum chairman of WTA, officially presented Binh Duong the certificate of WTA membership.

Tran Thanh Liem, Chairman of the Binh Duong People's Committee, said that the official membership in WTA will open great opportunities for the province in international cooperation, as well as promote the province and attract foreign direct investment.

In particular, this will be a foundation for Binh Duong to promote exchanges with scientific cities worldwide, exchange human resources, improve management capacity and scientific-technical level, transfer technology, as well as share development strategies with other members. This will make a significant contribution to the socioeconomic development of Binh Duong towards becoming a smart, dynamic, and innovative urban centre with high-tech and service-based economy.

The 2018 WTA Summit in Binh Duong is a very special event for both WTA and Binh Duong. On this occasion, WTA will celebrate its 20th anniversary.

Under the plan, Binh Duong will welcome UNESCO leaders along with more than 100 representatives of WTA members from more than 50 countries and territories around the world.

At the conference, the parties will discuss, share experiences, and vision on governance and sustainable development of science and technology cities in the world with the theme of "Smart city as a driving force for innovation and sustainable development," thereby making important connections in the process of globalisation.

To set out good preparation for the important event, the provincial People’s Committee has recently issued Decision No.1704/QD-UBND on the establishment of the steering committee and conference organisation board for the 11th General Assembly of WTA.

As of now, provincial leaders, local departments, the Smart City Office, and Becamex IDC are preparing all tasks for the WTA 2018 Summit, keeping to a rigorous schedule.

Geleximco proposes takeover of logistics centre and seaport

While Hanoi General Export Import JSC (Geleximco) is waiting for the government’s approval to take over the $2.2-billion Quynh Lap 1 thermal power plant, the company is also interested in developing a large-scale logistics centre and a seaport in the southern province of Ba Ria-Vung Tau.

The Government Office has recently announced the final decision of Deputy Prime Minister Trinh Dinh Dung approving the project to build Cai Mep Ha logistics centre and a general cargo and container seaport in Phu My town in Ba Ria-Vung Tau.

Accordingly, the government assigned the provincial leader to guide Geleximco to complete procedures to build the Cai Mep Ha logistics centre to meet the demand for socioeconomic development of Ba Ria-Vung Tau and the southern key economic region.

Regarding the general cargo and container seaport, Geleximco will discuss co-operation with the previous investor Vung Tau Shipbuilding and Oil Gas Services JSC to develop the project.

The total investment capital for these two projects is estimated at VND16 trillion ($707.9 million).

The total investment capital for Cai Mep Ha logistics centre and a general cargo and container seaport is estimated at VND16 trillion ($707.9 million).

Geleximco was mentioned numerous times recently when it submitted a proposal to establish Geleximco-HUI, a joint venture with Hong Kong United Co., Ltd., to take over the $2.2 billion Quynh Lap 1 thermal power plant from state-run Vietnam National Coal and Mineral Industries Holding Corporation Limited (Vinacomin).

Besides, the joint venture also wants to replace EVN to implement Quang Trach 2 thermal power plant.

Notably, Geleximco requested authorisation for the joint venture to hold a 75 per cent stake in Quynh Lap 1, leaving the remaining 25 per cent in the hands of Vinacomin. Meanwhile, the joint venture is looking to acquire the entire 100 per cent stake in Quang Trach 2 from state run Electricity of Vietnam (EVN). Geleximco stated that 80 per cent of the investment capital would come from loans from Chinese banks, while only 20 per cent would be covered from equity.

At present, the proposal to take over Quynh Lap 1 is waiting for the government’s approval, while the authorities have yet to issue a comment on Quang Trach 2.

Furthermore, Geleximco is the investor of the $900 million Thang Long thermal power plant located in the northern province of Quang Ninh.

The construction of the Thang Long plant began in October 2014 with 20 per cent of the investment capital from equity, while 80 per cent was from foreign loans guaranteed by the government and China Development Bank and China Export and Credit Insurance Corporation (Sinosure).

The Thang Long thermal power plant is scheduled to be completed in the third quarter of 2018.

Vietnam warned it is planning one airport too many

Vietnamese provinces are proposing new airports without realizing that the country is already overloaded with these facilities, experts say.

Authorities in the southern Ba Ria-Vung Tau province have been working with private firm Ho Tram Ltd. on constructing a civilian airport.

The airport, estimated to cost VND4.2 trillion ($193.6 million), will cover 250 hectares (618 acres) with a runway of 2,400 meters. It will be invested in by Ho Tram, the investor of the Grand Ho Tram Strip resort nearby.

The province had previously proposed another airport to serve military and cargo purposes, which is estimated to cost $1 billion.

These two airports would be just 30 kilometers away from each other.

Meanwhile, Ba Ria-Vung Tau already has an airport on Con Dao Island in operation and the mega Long Thanh International Airport being planned in southern Dong Nai Province is just 40 kilometers away.

In July, the northern province of Lao Cai proposed that an airport built near Sa Pa, one of Vietnam’s top tourist attractions, for both civilian and military purposes.

Provincial authorities estimated investment for the airport at over VND5.7 trillion (US$246 million).

Apart from the Noi Bai International Airport in Hanoi, the northern region is already set to get another one, the Van Don International Airport near Ha Long Bay, this December.

Experts are concerned that Vietnam is building too many airports without carefully evaluating their necessity.

Dr. Nguyen Thien Tong, former faculty head of aeronautical engineering at the Ho Chi Minh City University of Technology, said that there is an “airport race” in the country.

“If every province in the country had an airport, things would be chaotic,” he told VnExpress International.

It’s not necessary to have two new airports in Ba Ria-Vung Tau, as the province does not have a large number of tourists, Tong added.

Echoing Tong, Ngo Viet Nam Son, an architect who participated in designing the Ninoy Aquino International Airport Terminal in the Philippines, said that the province should only have one helicopter airport.

“It would be much more efficient if money is spent on building an expressway which connects Ba Ria-Vung Tau and Ho Chi Minh City,” Son told VnExpress International.

Speaking of the proposed airport near Sa Pa, Tong said that roads should be the focus of this area, not airports.

“There needs to be a very large number of tourists influx to result in profits for an airport, otherwise it would be a waste,” he said.

Investing in roads in this area will allow different vehicles to travel to multiple destinations in the north, serving the majority of the population, Tong added.

Son was concerned about the distance from the airport to Sa Pa town, which is about 100 kilometers away, a distance too long to attract tourists.

Traveling from the airport to Sa Pa town will take two hours with that distance, the same time tourists have to spend for flight procedures, he noted.

As travelling from Hanoi to Sapa now takes just five hours via expressway, roads should be the main focus of the area, not airports, Son said.

Tong said that Vietnam has been building too many airports in recent years, and the majority of them are not making any profit.

The Can Tho International Airport in the south is one of those.

In November last year, the province requested financial support from the government for the airport because it was not meeting its designed capacity.

The airport started operating in 2011 with a capacity of 3-5 million passengers per year, but authorities said that it could only serve about 612,000 passengers by the end of 2017, roughly 20 percent of its capacity.

The province has requested that a 30 percent discount be given to passengers flying from and to the airport, with the money taken from the state budget.

Can Tho is not the only airport in the country failing to make ends meet.

Vietnam’s top watchdog, the Government Inspectorate, said last October that the Airports Corporation of Vietnam (ACV) had to cover the losses for a majority of its airports.

It said that 16 to 18 of the country’s 22 airports did not generate enough revenue to cover expenses from 2012 to 2015, thus ACV had to spend over VND5.56 trillion ($236.57 million) for them.

Low number of passengers are one of the reasons why these airports are not making profits, the inspectorate said.

Tong said that the aviation industry in Vietnam has been building airports without conducting any market research to assess the actual demand for air transport in the country.

Cost-efficiency should be the top criteria in determining whether an airport should be built, he said.

“What matters most is that an airport makes a profit.”

Vietnam's aviation industry served more than 94 million air passengers in 2017, up 16 percent from the previous year, including 13 million foreigners.

Hanoi to host Seafood Product Fair this October

The Seafood Product Fair, the Vietnam Craft Village Trade Fair 2018 and an international seminar on the 'One commune one product (OCOP)' program will be held in Hanoi this October and November.

The announcement was made at a press conference held by the Trade Promotion Centre for Agriculture under the Ministry of Agriculture and Rural Development in Hanoi on September 28.

At the event, director of the Trade Promotion Centre for Agriculture Dao Van Ho said that the Seafood Product Fair, scheduled for October 6-10 in Hanoi, aims to maintain the sustainable development of production and consumption of Vietnam’s aquatic products, boost domestic trade promotion,expand domestic consumption markets, and attract greater investment to the seafood sector.

Mr Ho noted that apart from pavilions introducing fresh seafood products, the fair will also exhibit equipment for seafood exploitation and processing, aquaculture, cattle feed and supporting services and products.

 The  Vietnam Craft Village Trade Fair and international seminar on the ‘One commune one product’ slated for November 17-21 in Hanoi, will introduce craft village models and advertising the OCOP program for the 2018-2020 period.

The fair is expected to help farm produce and handicraft businesses to fully tap markets for their products, encourage artisans’ creativity in order to improve product quality and develop Vietnam’s traditional crafts. 

Solidworks Innovation Day 2019 launched

Dassault Systèmes’ Solidworks’ education partner, Innove Technology Development Ltd., is collaborating with RMIT Vietnam to give students a competitive edge in 3D engineering design and simulation.

The two organizations signed a strategic agreement a few days ago in Ho Chi Minh City that includes a deal to deliver Solidworks’ education software to support RMIT’s new engineering curriculum.

The strategic partnership, announced during the launch of Solidworks Innovation Day 2019 in Vietnam, will underpin a range of initiatives, including the development of a specialist engineering training curriculum integrating Solidworks software and plans to establishment RMIT as a Solidworks Certification Provider. These initiatives aim to eventually extend RMIT’s training capacity to industry and be a base for further collaboration between the university, Innove, and their industry partners. 

Innove is also planning to work with RMIT to develop a comprehensive Science Technology Engineering Mathematics (STEM) program integrating Solidworks software for primary and secondary schools in Vietnam. The expected commencement of this planned STEM program is the end of 2020.

Associate Professor Eric Dimla, Head of RMIT Vietnam’s School of Science & Technology, said the strategic agreement gives students a huge advantage as they enter the workforce. 

“Part of our wider education strategy at RMIT is to train students with best-in-class software tools to ensure they are digitally capable when they graduate,” he said. “This partnership gives them the opportunity to become proficient in innovative engineering design technology as Vietnam develops its digital economy in the context of Industry 4.0.”

“The agreement will give students experience in real project work using Dassault Systèmes’ Solidworks software,” said Mr. Nguyen Tho Khoi, Technical Director of Innove. “We are excited to be working with RMIT to nurture these digital-ready skills for Vietnam’s future workforce and cultivate a passion for innovation.”

The announcement of the strategic agreement coincides with the launch of Solidworks Innovation Day 2019 in Vietnam, an annual program that brings together industry thought leaders from Solidworks’ user communities around the country to experience the new tools of the Solidworks 2019 edition.

Solidworks 2019 will introduce new features to help Vietnamese engineers improve their product development processes to bring their innovative products into production faster. Speed-to-market is essential in today’s fast-paced globalized economy, as observed by Mr. Chevy Kok, Territory Sales Manager, ASEAN-North Professional Solutions, Asia Pacific South, at Dassault Systèmes.

“Being innovative and the ability to adapt fast is vital in the digital business world,” he said. “The speed-to-market factor gives businesses a huge competitive factor when it comes to innovation, as it enables them to reach consumers first and dominate the market.”

“With digitized processes, companies can test and launch products faster and win the speed-to-market game,” he added. “That is why engineers trained with the latest digital technologies for product design are in huge demand. We wish RMIT and Innove great success in this strategic partnership and look forward to seeing a whole new generation of digitally competent engineering talent emerging from this program.”

Effective boards needed to add value to enterprises

How to build an active board of directors to create value and influence the enterprise was the main content discussed at the “Building and Running Effective Boards: Roles of Chairperson & Succession Planning” conference on September 26 in Hanoi, co-organized by the Vietnam Institute of Directors (VIOD), Global Integration Business Consultants (GIBC), and Talentnet, in cooperation with the Ho Chi Minh Stock Exchange (HSX), the Hanoi Stock Exchange (HNX), and the Advisory Board Architects (ABA), and with technical support from the International Finance Corporation (IFC).

Two famous guest speakers from ABA spoke of what high-performance boards do to add value and impact on companies. The composition and structure of these boards was addressed and, in particular, the role of the chair in contributing to succession planning, based on the experience ABA has gained from working with companies around the world.

“ABA has worked with boards all over the world and one common factor we find is that a board can be one of the most powerful strategic tools a CEO can use to accelerate the business,” said Mr. Bob Arciniaga, Founder and Managing Partner of ABA.

“Unfortunately, many chairs and CEOs follow a standard board process that is so focused on reporting that it becomes viewed as a simple regulatory body and not a strategic accelerator that creates enterprise value. Through the implementation of ABA’s High Impact Board process in over 1,000 board meetings globally, we have proven that organizations can increase strategic effectiveness and drive greater efficiency from their board processes.”

The chairman has a critical influence on a board’s style and its composition, balance and performance. The role of the chairman will become ever more critical in emerging markets, where independence alone is not sufficient. He or she must know something about the business, particularly in setting the board’s agenda and ensuring that the focus of its work properly identifies and analyzes issues strategic to the business.

“With many years of professional experience as a consultant to businesses in Vietnam, I think there is a need for reforms in the way boards perform their roles, in order to create effectiveness and good practice,” said Ms. Ha Thu Thanh, Chairwoman of VIOD and Deloitte Vietnam. “Rather than intervening in the day-to-day running of the company, the board needs to provide more strategic direction to help management implement and monitor corporate performance.”

With the attendance of nearly 80 guests who are chairmen and representatives of listed companies on HSX and HNX, investment funds, and advisory firms, this was one of the first professional events to draw substantial interest from the market since the inception of VIOD in April.

“The topic is one of the most important in corporate governance development trends around the world,” said Ms. Nguyen Nhu Quynh, Board Member and Deputy CEO of HNX. “As one of the organizations active in promoting the development of good corporate governance practices in Vietnam’s stock market, HNX encourages listed companies to apply the best practices of modern corporate governance, aiming for greater transparency. The content of the discussion brought a lot of information and experience, helping businesses access information and better meet the requirements of society.”

Three startups selected for VIISA's fourth Accelerator Batch

VIISA has announced that three startups have been selected for its fourth Accelerator Batch.

VIISA Accelerator Program Batch 4 continues riding the wave by setting the bar for early-stage startups. Selected out of dozens of applications, the program shortlisted three startups to join its latest batch, with a focus on Business-to-Business (B2B) technologies.

The three startups are SecurityBox, offering optimal solutions to overcome all risks and problems in cybersecurity; InnKom, an easy-to-use application helping shoppers find specific brands and providing indoor navigation; and Goong, a mobile map platform that helps users quickly reach places and facilitates going out and keeping track of loved ones.

“The global trend of startups has shifted towards developing B2B technologies,” said Mr. Tran Huu Duc, CEO of VIISA and Director of FPT Ventures. “One of the challenges for B2B startups is that their users are familiar with behaving and working in traditional patterns and it is difficult for them to change. Therefore, B2B startups have to face more complicated issues and take more time to solve pain points. It’s hard, but we are excited to work with our startups in this batch for the next three months.”

The three-month program provides participating startups with $15,000 in cash plus an undisclosed amount of services such as co-working space, Amazon Web Services, HubSpot, Google Cloud, Mapbox, and Zendesk, direct access to corporate partners such as FPT, Dragon Capital, and participation in VIISA Investment Day to have the chance of pitching before more than 100 investors from around the world.

“In creating this accelerator program, we do not look to reinvent the wheel or teach the founders how to run their businesses,” said Mr. Leo Pham, Program Manager of VIISA. “These founders are already some of the best experts in whichever industry they operate in. As an accelerator, we take it on ourselves to help them crystalize these skills and experiences into a solid investment pitch, with which they can successfully raise funds from both local and regional investors.”

Launched in January 2017 by FPT Ventures and Dragon Capital, VIISA has become one of the most prestigious startup accelerators in Vietnam. After three batches, it has graduated 22 startups, with highlighted successes such as WeFit, UrBox, WisePass, and CyHome. The top 5 startups of VIISA increased revenue ten-fold, built networks with over 1,300 partners in five countries, and have more than 13,000 active users monthly.

The program syllabus includes three main areas: validating assumptions and proving product-market fit; learning techniques to strategize for future growth plans; and preparing investment pitches and storytelling skills for VIISA Investment Day and any further interaction with potential investors.

Mr. Hieu Vo, CFO of VIISA and Associate Director of Dragon Capital, set out the challenge for VIISA moving forward. “Vietnam has always possessed most of the required essentials for fast-growing startups, including a broad technical talent pool and many resilient business founders,” he said. “Through the VIISA program, we hope we can build and address the need for a meaningful and trusted place to nurture startup teams and grow the business.”

Startups in Batch 4 are expected to graduate by Investment Day, scheduled for December. Investment Day will comprise startup pitches from Batch 4 and portfolio companies to more than 100 investors, mentors, and corporate partners from around the globe.

Criteo: Digital marketing campaigns crucial for brands and retailers

Criteo S.A., an advertising platform for the open internet, last week unveiled findings from two studies looking into the opportunities Vietnamese marketers can tap into in the marketing and advertising landscape.

A Criteo-commissioned study conducted by Euromonitor - Acquire, Convert and Re-engage - dived into the three stages of a typical marketing campaign to determine what works for marketers and the challenges they face in each stage. The Big App Commerce Opportunity in Vietnam study, also commissioned by Criteo, highlights the need for retailers to offer a seamless mobile app shopping experience. Both studies reinforce the need for retailers and brands to prioritize digital marketing as omni-channel shopping continues to be the new normal.

Omni-channel shoppers are increasingly completing online purchases on mobile apps and are no longer just researching and browsing products on this channel. At the same time, forward looking retailers that have designed and executed digital marketing strategies in response to this trend are already realizing the benefits in customer acquisition, conversion and re-engagement. To keep up with the behavior of shoppers in Vietnam and maintain or grow sales margins, other retail players must assess this situation and similarly adopt a stronger focus on digital marketing.

“Going online has greatly influenced the way we shop and the spillover effects are evident in today’s marketing landscape,” said Mr. Alban Villani, General Manager, Southeast Asia, Hong Kong and Taiwan at Criteo. “This has shaped the way marketers develop their campaigns. As omni-channel shopping rises, it is the right time for marketers to have acquisition, conversion and re-engagement campaigns to not only attract new customers but also re-attract the same pool.”

While TV and print were the top channels in Vietnam in terms of ad spend, online has had the fastest growth, at close to 27 per cent CAGR from 2014 to 2017. With more than 34 per cent of users having two or more connected devices by 2022, it is expected that 89 per cent of total marketing budgets will be invested in the online space by the same year.

Vietnamese marketers are already gradually riding on this trend, as seen by their key focus areas in 2017. Paid display advertising accounted for the largest share of their marketing budget at 16 per cent, of which retargeting solutions that re-engage customers with relevant ads accounted for 51 per cent of paid display advertising spend. Search engine optimization (SEO) is another key spending area for Vietnamese marketers, taking up 13 per cent of the marketing budget. This is followed by search advertising (pay-per-click), social media marketing, and traditional marketing such as print, direct mailers, TV and radio ads, which each took up 11 per cent of the marketing budget in 2017.

“Being digitally present is more critical than ever before,” Mr. Villani added. “Marketers are challenged to keep reinventing new campaigns and ideas to attract the omni-channel shopper. This is especially vital in Asia-Pacific, where close to 43 per cent of the population are expected to do their buying online. Criteo works closely with our partners to understand their shoppers’ preferences and propensity to purchase in real-time, so that relevant campaigns can be customized for them.”

P2P lending startup Tima picks up Series B funding

Vietnamese financial marketplace and peer-to-peer (P2P) lending platform Tima raised $3 million in Series B funding from Belt Road Capital Management (BRCM), a Greater Mekong-focused private equity fund, at a valuation of nearly $20 million, Tima announced on October 1.

“We received higher investor demand from top financial investors and strategic investors in this round,” Tima Co-Founder and Board Member Cong Tran confirmed with VET. “We may have a pre-Series C funding round right after this Series B, and our Board is considering proposals from several big funds and investors who can add value to the company for ambitious growth and expansion.”

The new funding will be used for Tima’s growth in Vietnam’s 63 cities and provinces, investing more in technologies and talent with a mission of quickly and conveniently connecting borrowers and lenders with financial technologies.

As part of the investment, Mr. Witt Gatchell, Senior Investment Manager at BRCM, will join Tima’s Board of Directors. “We are very excited to be investing in Tima as BRCM’s first investment in Vietnam,” Mr. Gatchell said in a statement. “With Tima’s strong management team and presence in the market, we believe that the company has tremendous opportunity for growth.”

Though enjoying exponential growth over the last few years, with $47.84 billion in outstanding consumer loans registered by the end of 2017 according to data from the Banking Strategy Institute at the State Bank of Vietnam and from StoxPlus, the consumer finance market in Vietnam is still behind its regional peers and has room for development, according to Mr. Gatchell.

He also believes that Vietnam has the potential to boost financial services in the time to come.

Tima also officially announced a strategic partnership with the VietinBank Insurance Corporation, the insurance arm of Vietinbank - one of largest banks in the country.

It will use the services of VietinBank Insurance to ensure the safety of borrowers. When borrowers are unfortunately exposed to unexpected risks, VietinBank Insurance will help them pay off their loans. Solutions from VietinBank Insurance will contribute to added value to Tima and help participants feel assured when using its P2P lending platform.

Tima has 23,775 lenders and 2,133,405 borrowers on their platforms, it said in a statement. In April it was named one of the top 10 software and IT services companies in Vietnam by the Vietnam Software Association (Vinasa).

Tima was founded in 2015 and received Series A investment from the Dunearn Singapore Fund and G Capital in 2016. It is the leading consumer finance marketplace and P2P lending platform in Vietnam and has various financial products.

Belt Road Capital Management has also announced a $4 million investment in Unnitel, an Asia-based mobility virtual network provider. In January, it invested $1.8 million in the Australia-based property portal Digital Classifieds Group. The fund also invested $7 million in the Oway Group, a leading travel and taxi company in Myanmar, as part of a $14.7 million financing round. It made its latest investment in August, in Cambodia’s leading digital publishing and entertainment group Sabay Digital Corporation, for a 40 per cent stake in the company.