Pandemic a test of fire for Vietnamese enterprises

The COVID-19 pandemic has been a test for Vietnamese businesses as many have been and will be struggling to recover for the foreseeable future. 

Those who emerge from the crisis will have proven their mettle by overcoming an unprecedented and difficult time, said business leaders.

Pandemic a test of fire for Vietnamese enterprises hinh anh 1

Prime Minister Nguyen Xuan Phuc (third from left) in a meeting with Vietnamese entrepreneurs in Hanoi (Photo: chinhphu.vn)

No sector has been hit harder than tourism. Hotels and resorts across the country, which were often bustling with tourists, have seen the number of visitors drop by as much as 90 percent since strict travel measures were put in place by the world's governments to contain the spread of the virus. Despite recent efforts to tap into local demand, the sector simply could not make up for the sudden loss of foreign visitors.

Nguyen Manh Cuong, CEO of a local tourism company, said many firms, his included, have been biding their time in the hope of a strong recovery once the pandemic is under control.

"We cannot do it alone without support from the central government and tourism authorities, though," he said.

Other sectors have also been experiencing one of the worst declines since the 1997 Asian financial crisis.

Nguyen Quoc Hiep, CEO of a property investment firm, said demand for properties has never been lower with firms reporting just a quarter or less of their usual sales figure compared to the same period of 2019.

"We knew we were heading for choppy waters but nobody expected this. It's not an overstatement to say we wasted eight months of 2020 with nothing to show for it. It is now impossible to meet our yearly sales targets," Hiep said.

Even traditionally strong industries such as textiles and footwear have not been exempted. Sharp falls in demand and order cancellations from international buyers have resulted in major disruptions with firms forced to lay off workers or reduce working hours.

Phan Minh Chinh, chairman of sportswear maker Pro-Sport, said the pandemic has forced textile firms to switch their production to short-term and less sustainable products such as masks and PPE suits.

"These orders are not bringing in a lot of money anymore but they allow us to keep our workshops open and our workers employed," said Chinh.

Chinh, Hiep and Cuong said the most important objective right now for their firms is to stay alive and make sure they could keep their workers for a post-pandemic comeback.

 

Silver lining

As the pandemic continues to ravage the economy, firms have started to adapt and even find opportunities to innovate and grow.

With the population mostly wary about heading out, businesses have been finding ways to connect with customers from the safety and comfort of their homes. According to a report by market research company International Data Corporation (IDC), over 70 percent of Vietnamese small-to-medium-sized enterprises have ramped up on the digitalisation front to reach their customers in the last nine months of 2020.

E-wallet MoMo said the company has provided thousands of small businesses from department stores to food vendors with a digital platform to stay connected with consumers. The company said since the pandemic the growth of its e-wallet business has doubled compared to the previous year.

The IDC's report claimed said firms, once fully digitalised, may contribute up to 30 billion USD to the country's GDP by 2024.

Becamex, one of the largest investment and industrial development firms in the country, said it has been working on a digitalisation strategy for years. Disruptions caused by the pandemic have provided the corporation with enough reason and motivation to finally implement it. After a few months, Becamex's internal reports have shown reduced business expenses, up to 50 percent in some areas, and significant improvement in business and time management.

Tran Hai Linh, CEO of e-commerce firm Sendo, said the massive increase in online shopping and e-commercial activities presented tech firms with a unique opportunity to develop big data and machine learning technologies at such a speed it will accelerate the process by two to three years.

Nguyen Quoc Ky, chairman of Vietravel, said it's up to business leaders to recognise opportunities in times of crisis but for that to happen they must maintain a positive outlook and always be on the hunt for new ideas.

In a letter to the business community released on Tuesday, October 13 – Vietnam Entrepreneurs' Day - Prime Minister Nguyen Xuan Phuc said the Government of Vietnam will stand shoulder to shoulder with the business sector and entrepreneurs by implementing support packages and policies to provide a boost for businesses to quickly get back on their feet.

The Government leader said the pandemic is a test for the business sector and business leaders must try "twice or thrice as hard to overcome it".

Vietnam reported 2.12 percent growth for the first nine months of the year, a rare success story in the time of COVID-19, through significant tax cuts and fees for businesses while at the same time implementing administrative reforms and speeding up of e-government building./.VNA

 
 

Other News

.
E-commerce M&A activities ready to take centre stage
E-commerce M&A activities ready to take centre stage
BUSINESSicon  25/11/2020 

As brick and mortar shopping falls in popularity during the pandemic, online shopping platforms took have increased presence among Vietnamese consumers. 

Realty stocks are attractive: experts
Realty stocks are attractive: experts
BUSINESSicon  25/11/2020 

Though difficulties caused by COVID-19 were reflected in the business results of listed realty firms, experts are still optimistic about the market. ​

Banks to deduct tax payments from clients’ accounts
Banks to deduct tax payments from clients’ accounts
BUSINESSicon  25/11/2020 

Banks will be able to deduct the tax payments of suppliers based in foreign countries—that conduct e-commerce or digital transactions with organizations and individuals in Vietnam—from their bank accounts,

Vietnamese farmers sell farm produce via smartphones
Vietnamese farmers sell farm produce via smartphones
FEATUREicon  25/11/2020 

An eel farm of an older man brings turnover of nearly VND10 billion a year, and 99 percent orders are online. Another farmer sold 26 tons of rambutan by contract after putting goods on online sale.

Aviation industry awaits new bigger bailout
Aviation industry awaits new bigger bailout
FEATUREicon  25/11/2020 

Private airlines including Vietjet Air and Bamboo Airways struggling to survive are looking forward for a new support package to maintain their operations.

Black Friday: World under Covid-19 bans, but Vietnamese excited
Black Friday: World under Covid-19 bans, but Vietnamese excited
BUSINESSicon  24/11/2020 

Around the world, Black Friday this year may be very dim because of Covid-19 pandemic. But in Vietnam, people are enjoying the safety of a "new normal", squeezing together to buy discounted goods at shopping malls.

Vietnamese industrial market update – Rise of coastal industrial zones
Vietnamese industrial market update – Rise of coastal industrial zones
BUSINESSicon  24/11/2020 

The demand for industrial property at coastal regions is high, but the supply of industrial land ready to hand over in industrial zones in both regions was scarce.

Improved business environment is the key to FDI not tax and land incentives
Improved business environment is the key to FDI not tax and land incentives
BUSINESSicon  25/11/2020 

ASEAN countries need to choose between recovery based on wasteful competition for investment or coordination, cooperation, and joint hands to generate sustainable tax revenue to spend on health, education,

FDI possible in digital cross-border services
FDI possible in digital cross-border services
BUSINESSicon  24/11/2020 

With regional nations racing to lower their taxes in order to woo more investment, which may dent their coffers, creating feasible policies for collecting taxes is expected to help reach their goals of attracting more high-quality funding.

RCEP will not worsen trade deficit: ministry
RCEP will not worsen trade deficit: ministry
BUSINESSicon  24/11/2020 

The Regional Comprehensive Economic Partnership (RCEP) would not worsen the trade deficit Vietnam was running with signatory markets, according to the Ministry of Industry and Trade.

HCM City hopes to attract investment by allotting more lands in IPs, EPZs for infrastructure
HCM City hopes to attract investment by allotting more lands in IPs, EPZs for infrastructure
BUSINESSicon  24/11/2020 

HCM City authorities plan to offer competitive land rents and other incentives at industrial parks (IPs) and export processing zones (EPZs), and earmark more lands for building infrastructure to attract investment.

HCM City seeks ideas for underground space planning through international competitions
HCM City seeks ideas for underground space planning through international competitions
BUSINESSicon  24/11/2020 

The HCM City Department of Planning and Architecture has reported to the city People’s Committee on underground space planning and underground space management regulations.

RCEP will not make the trade deficit with China worse: MOIT
RCEP will not make the trade deficit with China worse: MOIT
FEATUREicon  24/11/2020 

Worries have been raised that RCEP will lead to a higher trade deficit with partners, especially China. But the Ministry of Industry and Trade (MOIT) doesn’t think so.

Lofty goals achievable through stable regulations
Lofty goals achievable through stable regulations
BUSINESSicon  25/11/2020 

The Ministry of Planning and Investment aims to have 15 Vietnamese private companies with market capitalisation of over $1 billion each by 2025, with that target increasing to 20 by 2030.

Preliminary decision on tyre exports flusters the market
Preliminary decision on tyre exports flusters the market
BUSINESSicon  24/11/2020 

The global demand for rubber and tyre products has been consistently increasing throughout the last decade, with Vietnam being one of the top suppliers of these items.

17th CAEXPO to benefit China-Vietnam cooperation
17th CAEXPO to benefit China-Vietnam cooperation
BUSINESSicon  23/11/2020 

China and Vietnam are friendly neighbors connected by mountains and rivers, and have achieved fruitful results in the sustained economic and trade cooperation. 

The path for digital business in Vietnam
The path for digital business in Vietnam
BUSINESSicon  26/11/2020 

Digital transformation is taking place across industries in Vietnam, with more enterprises succeeding in this journey. 

VIETNAM BUSINESS NEWS HEADLINES NOVEMBER 25
VIETNAM BUSINESS NEWS HEADLINES NOVEMBER 25
BUSINESSicon  25/11/2020 

State Bank Operations Centre adjusts down USD rate for first time in 2020

More M&A deals in the banking sector next year: local media
More M&A deals in the banking sector next year: local media
BUSINESSicon  23/11/2020 

Vietnam’s equity market may witness big merger and acquisition (M&A) deals in 2021 as local banks are trying to lure foreign capital on the country’s participation in international trade deals.

Office rental rates to fall by end of year: experts
Office rental rates to fall by end of year: experts
BUSINESSicon  23/11/2020 

Office rental rates will continue to drop while supply will be in the non-central business district areas in HCM City in the coming time, according to property research companies.

 
 
 
Leave your comment on an article

OR QUICK LOGIN