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Cashless payments continue to grow in popularity

A customer makes a payment using a QR code. Vietnam Electricity (EVN) is working with commercial banks and intermediary payment services institutions to implement QR codes for power bill payments. — Photo

Using QR codes to process payments has been increasing in popularity over the past 12 months, and the trend shows no signs of slowing down.

Cashless payment and transaction channels are increasingly popular, with commercial banks, e-wallets and fintech companies promoting the application of technology for online payments.

Many customers now choose cashless payments, the most popular being a payment card, followed by scanning a QR code and transferring money.

Card payment sales at many goods and service suppliers have also increased significantly. Commercial banks and e-wallet companies said that cashless transactions are even more popular now than during the COVID-19 pandemic.

Ngo Trung Linh, General Director of Viet Union Online Services Corporation, said its Payoo payment platform recorded increased cashless payment transactions in the post-COVID recovery phase last year.

New payment methods, such as e-wallets or QR code scanning, have grown significantly. Non-cash payment methods will continue to grow on last year, including QR codes.

"Enterprises are ready for infrastructure with low investment costs, bringing convenience to people when paying. The outstanding method that meets the above factors and is likely to explode next year is paying via QR codes," said Linh.

With a mobile phone in hand, he added that they could open banking applications or e-wallets to choose a source of money to scan the code and make payments.

QR payments have even gone international. National Payment Corporation of Viet Nam (NAPAS) and Thailand’s National ITMX (NITMX) recently announced the completion of a retail payment connection using QR codes.

In the first phase of implementing this project, Thai tourists can scan VietQR codes to pay for goods and services at payment acceptance units of TPBank and BIDV.

Vietnamese tourists who are customers of TPBank and Sacombank can scan ThaiQR codes at nearly eight million payment points in Thailand.

NAPAS will continue to cooperate with NITMX to expand member banks to meet the demand of tourists in the two countries this year. 

Vietnam - important trading partner of France

In a meeting with Vietnamese Prime Minister Pham Minh Chinh recently, French Prime Minister Elisabeth Borne affirmed that Vietnam remains an important partner of France in the Indo-Pacific region.

In 2023, France and Vietnam celebrate two anniversaries including the 50th anniversary of the establishment of diplomatic relations between France and Vietnam (1973-2023) and the tenth anniversary of the strategic partnership between the two countries. French Consul General in HCMC Emmanuelle Pavillon-Grosser had a talk with Saigon Giai Phong Newspaper about this event.

Vietnam is an important trading partner of France, said French Consul General in HCMC Emmanuelle Pavillon-Grosser as France and Vietnam have built a sustainable partnership in the economic field, especially in infrastructure, transportation, energy, and space technology for a long time.

To mark this half-century of diplomatic relations, the French and Vietnamese authorities held a nationwide contest and jointly selected a logo that combines the number 50 with the symbols of each country such as the Eiffel Tower of France and the Vietnamese Ao Dai on the flags of each country, said the female consular.

She disclosed that this celebration carries the slogan ‘Sharing Culture’, which will be displayed throughout the year. This logo and slogan were officially announced by Mr. Gérard Larcher, President of the French Senate and Mr. Vuong Dinh Hue, President of the National Assembly of Vietnam.

In November 2021, Vietnamese Prime Minister Pham Minh Chinh paid an official visit to France. At the time the Covid-19 pandemic ended in the Southeast Asian country, exchanges between the two sides were quickly restored along with many high-level discussions, especially the official visit to Vietnam in December 2022 by the President of French Senate Gérard Larcher, said French Consul Emmanuelle Pavillon-Grosser.

According to Ms. Emmanuelle Pavillon-Grosser, Vietnam is an attractive market; thereby, it has been attracting more and more investment from French enterprises. Subsequently, by the end of 2021, France ranked third among European countries with investment capital in Vietnam. Many large Vietnamese enterprises, such as VinFast, have displayed their products in France. These investments have contributed to the continued growth of trade relations between the two countries.

For a long time, France and Vietnam have built a sustainable partnership in the economic field, especially in infrastructure, transportation, energy, or space technology. Vietnam is a market attracting more and more investment from French enterprises; by the end of 2021, France ranked 3rd among European countries with investment capital in Vietnam. Moreover, many large Vietnamese enterprises, such as VinFast, displayed their products in France. These investments have contributed to the continued growth of trade relations between the two countries.

This trend will be further increased when the Free Trade Agreement between the European Union and Vietnam is fully implemented. The vitality of the economic partnership will be demonstrated through the many events organized to celebrate the 50th anniversary of diplomatic relations between the two countries. In March 2023, the Regional Forum of French Foreign Trade Advisors will take place in Ho Chi Minh City with the participation of nearly 450 French businesses and officials.

The year 2023 is also marked by the event celebrating the 30th anniversary of legal cooperation and renewing the cooperation framework with Vietnam. Through the institution "Vietnam-France Law House" established in 1993, France has accompanied Vietnam in the judicial reform process until 2012. Many French jurists such as the most famous of which is Professor Michel Grimaldi made many contributions to the compilation of Vietnam's 1995 Civil Code as well as its subsequent two amendments in 2005 and 2015.

The Institute of Research for Development (IRD), the Center for International Cooperation on Agricultural Research for Development (CIRAD), the École française d'Extrême-Orient (EFEO), or French School of Asian Studies), the Agency for Healthcare Research and Quality's (AHRQ) all have set up offices in Vietnam and mainly operated in priority areas such as energy transition and health, through the "One Health" approach.

France is also supporting Vietnam in achieving its sustainable development goals, focusing on urban transport and climate change. The French Development Agency (AFD) is implementing many projects to reduce the impact of climate change, and in collaboration with Vietnamese authorities and EVN (Electricity of Vietnam), on the issue of the energy transition. The announcement of the signing of the Fair Energy Transition Agreement with Vietnam, at the EU - ASEAN Summit in December 2022, shows the strengthening of cooperation in this area, through the new commitments of AFD and French enterprises in the field of renewable energy in Vietnam.

Over the past 30 years, more than 3,000 Vietnamese doctors and nurses have practiced in French hospitals. Today, these former resident doctors hold important positions in Vietnamese universities and hospitals. It is hoped that many young Vietnamese doctors will continue to practice in France.

In 2023, the consulate will introduce the image of contemporary France, culture, language, and technology to more young Vietnamese people. France has six of the best vocational schools in the fields of animation and video games, which attract young people from both countries. Many Vietnamese primary and secondary schools have been teaching French programs, and each year, nearly 6,000 Vietnamese students study abroad in France. The French government has provided scholarships to dozens of Vietnamese international students through high-quality scholarship programs for master's and doctoral degrees.

Before the Covid-19 pandemic, France used to welcome nearly 90 million tourists a year, but only about 30,000 Vietnamese tourists.

The French Embassy in Vietnam, the French Consulate General in Ho Chi Minh City and all employees in Vietnam wished to show the richness of the two side partnership on this anniversary, through various events in Vietnam. This program also covers the diplomatic relations between the twin localities, especially the relationship between Ho Chi Minh City and Lyon, a large city in Southeast France. A series of events will be implemented in the southern metropolis to celebrate food, fashion and design. She revealed that a light and sound show scheduled to take place at the Imperial Citadel of Hue will be the perfect closing event for this memorable year.

Consular Emmanuelle Pavillon-Grosser said that she is very pleased to join the staff of the Consulate General, the Institute of France (Institut français) in Ho Chi Minh City and the French Foreign Trade Promotion Agency (Business France) to contribute to the success of this series of events. She added that the two countries will continue to get to know each other in 2023 and she wants to discover new street corners, new culinary specialties and especially meet more Vietnamese friends.

Banking in Vietnam go digitalizing

Highly aware that digital transformation is a critical process in Industry 4.0, the banking industry in Vietnam has volunteered to enter this process first, and has begun to reap ‘sweet fruit’.

About 95 percent of all banks in Vietnam have their own digital transformation plan, and are actively trying to master advanced technologies such as cloud computing, bid data analysis to offer new digital services based on them.

The established digital ecosystems of banks, with their digital payment methods, are linked to other digital services in the national economy to allow customers to experience convenient features like opening payable accounts, transferring or depositing money, opening savings accounts, on the virtual space.

Leading domestic banks in digital transformation including VPBank, Techcombank, and MB have reported that over 90 percent of the financial transactions of their customers are done digitally, greatly reducing operation costs.

Since it is now easier and more convenient to pay money via digital methods, the proportion of Current Account Savings Account (CASA) in these banks has witnessed an increase of 40-50 percent. In 2021, when the Covid-19 pandemic was at its peak, the net profit of 27 domestic banks rose by 33.3 percent compared to 2020. In the first 9 months of 2022, the total pre-tax profit of 28 banks reached VND192.5 trillion (US$8.2 billion), a growth of 39 percent as opposed to that time the previous year.

As to the public, during the social distance period, they could still perform transactions, invest money via online services offered by their banks. This has formed a positive habit of cashless payment in the community. Compared to around 50,000 such transactions via banks per day 5 years ago, the figure for last year came to 8 million a day, with an average transaction value of VND900 trillion ($38.3 billion) per day.

The State Bank of Vietnam commented that this impressive achievement results from its investment of VND15 trillion ($638.7 million) in digital transformation. On average, a bank with strong digitalization activities needs to pour about VND1.5 trillion ($63.9 million) a year into this process to maintain the services.

Hi-tech fishing vessels sailing towards promising future

In the last decade, the fishery sector in Vietnam has been thoroughly restructuring to be more professional and modern via the use of IT and digital transformation. This has brought about great achievements and performance boost.

Around the sea of De Gi in Phu Cat District of Binh Dinh Province, 52-year-old La Bo is considered the fishing champion. Large marine supply equipment companies in Ho Chi Minh City have asked him to pilot their newly developed devices. In 2013, he was even invited by 4 Japanese seafood businesses to be the ambassador who went fishing with their super-sized vessels.

Lately, even though he has no longer gone out fishing with his teammates, La Bo still frequently supervises his 1,030-horsepower ship working on Nam Con Son water via his smart phone.

He recalled that in 2008 and 2009, he had spent billions of VND to buy state-of-the-art fishing equipment, and his work became more fruitful a year later. Any fish schools within a radius of 1,000-3,000m could be located and then simulated in great detail thanks to those advanced devices, making the fishing task extremely effective.

Using the same method of technology investment to improve work performance is the fishing village of Vinh Loi in My Thanh Commune of Phu My District (Binh Dinh Province). It used to be so poor and isolated, but now becomes more prosperous thanks to modernizing fishing vessels and implementing advanced technologies in the work.

59-year-old local fisherman Do Chi Dung shared that he owns 4 such modern fully-equipped fishing vessels with a capacity of 900-1,000CV. In one of his ship, he installs an 8-billion-VND locating device for the three radiuses of under 1,000m, over 2,000m, and over 5,000m. There are also other useful machines such as a radar screen, satellite navigation, satellite charts, cruise monitoring screen, flow meters, walkie-talkies, wind gauges and storm warnings.

As a result, 2022 was the year Dung earned the most in the last 10 years, at more than VND90 billion (US$3.84 million).

Vice Chairman of Binh Dinh Province People’s Committee Nguyen Chi Cong commented that Hoai Nhon Town is the leader at district level as to the number of offshore fishing vessels with a length of over 15 meters (2,100 ships).

At present, the town has a fisherman association with 680 teams. All offshore fishing vessels of the association have cruise monitoring equipment installed; therefore, in the last 2 years, no ships have violated the law against illegal, unreported and unregulated fishing (IUU).

Thanks to modern devices, the output of fishing vessels in the area last year reached more than 61,000 tonnes, equal to a revenue of VND2 trillion ($85 million).

Cutting edge technologies are also set up at fishing ports to support fishermen. At Quy Nhon Fishing Port, when a vessel approaches a pier, the port’s IUU team uses Onedrive and VNFishbase to help fishermen transport their products into the port with clear origin and gives instructions on a safe location to stay away from possible storms.

Director of Binh Dinh Province Department of Agriculture and Rural Development Tran Van Phuc informed that his department is asking for an approval to buy 100 electronic diary devices NKT-01 to release officers from manual administrative work and save time.

Vice Chairwoman Nguyen Thi Thu Sac of Vietnam Association of Seafood Exporters and Producers (VASEP) said that electronic fishing diary is a breakthrough in the restructuring of the seafood industry, so localities having offshore vessels should implement it as soon as possible.

She also proposed that leading regions in the industry like the provinces of Binh Dinh, Khanh Hoa, Vung Tau, and Kien Giang should establish wholesale markets and auction centers for seafood so that fishermen can update prices online, improving their competitiveness.

Smart agriculture thanks to chip-based platform

After years researching ways to automate agricultural activities, 36-year-old Nguyen Duc Huy from Da Lat City was able to simplify those labor-intensive tasks via the aid of digital platforms.

Different from other vegetable farms with people going around manually watering their crops, the hydroponic vegetable farm of Nguyen Duc Huy has an automatic watering system installed. This is the work developed by Huy, who has a master’s degree in Plant Biology from University of Science (Vietnam National University – Ho Chi Minh City).

When starting up an agricultural business, Huy and his friend applied advanced technologies on his 2ha hydroponic field to grow tomato, lettuce, cucumber. All plants on this field are monitored via chips that send data to self-developed Vietponics Control System on his computer. The system can be installed on smart devices to help farmers deliver farming orders like watering and fertilizer spraying remotely.

In addition, data are accumulated each day, and programed algorithms are used to precisely notify farmers of which plants need humidity adjustment, fertilizer adding, watering. This will greatly boost the yield of the crop by even 5 times compared to traditional farming methods.

Seeing that Vietnam has advantageous conditions for farming activities (low logistics cost, good supporting industry, long-term agriculture development), in 2019, Huy researched a novel plastic frame that can be adjusted into different shapes to meet all forms of hydroponic farming.

Based on the existing farming management application that possesses a large database optimized for each plant type, Huy continued to study more into the nutrient film technique, where dissolved nutrients are recirculated continuously past the bare roots in a very shallow stream of water. The advantage of this technique is that plant roots are not deeply soaked in water, and thus eliminating rotting.

Another of Huy’s research is an automatic circular watering system. Current systems on the market discard surplus water, which is quite a waste as an area of 1,000m2 needs 10-20m3 water. Huy’s system allows wastewater recycling, reducing the necessary volume to 500 littre per 1,000m2. This is a great cost and water saver.

He added that his model is suitable for different spaces, ranging from balconies or rooftops to large-scale farms.

Vietnam should prepare for headwinds in 2023: WB economist

Mr. Andrea Coppola, Chief Economist of WB in Vietnam, shared that Vietnam had good macroeconomic results last year. This is a remarkable result amid the economic downturn in many other countries. However, he warned the Southeast Asian country will hit difficulties and see slower economic growth in 2023.

According to Mr. Andrea Coppola, three strong resistances including inflation, and uncertainty associated with heightened risks in the financial sector have been affecting the global economy in 2022 and 2023. Firstly, persistent inflationary pressures, worsening financial conditions and recession in large economies are projected to cause global economic recession. In such a context, the Vietnamese economy will face strong headwinds in 2023 on both external and internal fronts.

Secondly, the above risks will have a strong impact on Vietnam's main trading partners. Thirdly, domestically, higher inflation and uncertainty related to financial sector risks could weigh on growth prospects.

The WB expert proposed that authorities can consider restraining public expenditures, prioritizing spending on human resource development, and speeding up the implementation of public investment projects that have the highest expected impact on economic growth. Effective public investment management is crucial for promoting economic growth in the context of inflation.

To address liquidity challenges, as some banks become more vulnerable and are in need of assistance, the State Bank can help restore confidence by providing emergency liquidity support for banks that have a plan to restore their liquidity without regular dependence on loans from the State Bank. In addition, it is necessary to continue to improve financial stability, and strengthen supervision, monitoring and assessment of systemic risks in the banking, capital and real estate markets.

This problem is especially serious for ODA-funded projects where land acquisition and resettlement are carried out with counterpart funds, which are often underestimated during preparation, leading to insufficient capital for project implementation. Another problem that slows down the disbursement of public investment projects is the poor preparation of projects.

To improve the efficiency of public investment management, authorities should improve the quality of project preparation by more accurately estimating costs and benefits, including land-related issues. If a project is judged to be unfeasible, simplified procedures should be considered for a timely adjustment.

Regarding the institution's role in pushing Vietnam into the economy with high income, Mr. Andrea Coppola said that Vietnam's GDP per capita has increased fivefold over the past three decades whereas the institution has not been able to adapt at the same rate. He mentioned a recent World Bank Group systematic country diagnostic report titled “How will Vietnam blossom” which contains five recommendations for institutional reform for Vietnam including the creation of a solid institutional foundation for each development priority to turn into concrete actions, simplification of administrative procedures to improve the effectiveness of governments at all levels, use of market-based tools to motivate relevant sides in public and private sectors, effective implementation of rules and regulations to enhance motivation, trust and fairness and greater transparency and accountability.

By adopting these institutional reforms more systematically, Vietnam will strengthen its economic development vision, strengthen its capacity to implement national strategies and produce results in a number of key areas that help the country achieve development goals such as green growth and digital transformation.

Vietnam’s strong economic performance in 2022 has been driven by several factors, including export, domestic demand, private investment and FDI disbursement, according to Mr. Andrea Coppola.

2023 forecasted to be difficult year for global economy and Vietnam's economy

The tightening monetary policy of central banks around the world certainly caused the global economy to slow down, and may even fall into a recession in 2023. With a high openness of GDP, Vietnam's economy will certainly be strongly affected by the global economy.

Historical data shows that every time the world or regional economy has problems, such as the Asian currency crisis in 1998, the US financial crisis in 2008, or the Covid-19 epidemic recently, Vietnam's economic growth slowed down significantly, at less than 6 percent.

In addition to the risk of slowing growth, increasing inflationary pressure is also a big challenge for Vietnam next year. Although on average CPI only increased by about 3 percent in 2022, inflation over the same period was at more than 4 percent. Average inflation is also at a high level, averaging 0.4 percent per month, equivalent to 4.8 percent a year, due to the impact of rising world raw material prices, consumption demand and investment boom after the pandemic also does not exclude the impact from monetary easing in previous years. In 2023, inflation pressure will be greater than in 2022, due to the additional impact of the VND depreciation of about 8-9 percent against the US dollar.

Another challenge is related to the debt crisis in the corporate bond market in 2022, it is hoped that real estate businesses can raise little capital on the stock market despite the issuance of stocks or bonds. Meanwhile, the bank credit channel has also reached its limit, when the real estate debt ratio is up to 20% percent of total credit. Therefore, in 2023, the real estate market is likely to fall into a quiet state due to a lack of resources; thereby, affecting other sectors of the economy such as construction, iron and steel production, and decoration.

While the economy is forecast to face many difficulties in 2023, policy space is limited. This is also a big challenge. In general, when the GDP growth rate shows rising economic productivity, the value of money in circulation increases. The scale of money supply and credit compared to GDP is now at a high level, even a limit, so if it is loosened further, inflation and bad debt will be unlikely to be under control at a reasonable level. Meanwhile, fiscal policy is bumping into difficulties in disbursing although there is still a little room.

Although the above forecasts and comments are somewhat pessimistic, there is still hope that things will not be too bad in 2023. Currently, inflation in developed countries, typically the US, is likely to have reached the top. Meanwhile, although interest rates have increased rapidly in recent years, they are not too high. The risk of a global recession can therefore be avoided provided that central banks stop tightening monetary policy at the right time.

The other hope for global economic growth is that China - the second largest economy in the world - can continue to ease the zero Covid policy and increase economic stimulus, including the rescue of the domestic real estate market. If China's economy recovers, not only will global aggregate demand be improved, but the disruption of supply chains will also be overcome. The current Indian economy is also considered the fulcrum of the global economy in the coming year. If the world economy does not fall into recession, the target of 6.5 percent growth in 2023 will hopefully achieve.

Although inflation is accelerating, the pressure from the world's basic commodity prices in 2023 is probably not great, when global economic growth slows down. The pressure from the exchange rate in the coming year is expected to decrease when the USD index is likely to have peaked.

If the downtrend of the US dollar against the Vietnamese dong takes place, the pressure of the exchange rate on import inflation will decrease accordingly. In other words, prices are likely to slow down, and the inflation target of around 4.5 percent in 2023 could still be achieved.

The downtrend of the USD in international and domestic markets will also help reduce the incentive to hold foreign currencies in the foreign exchange market. If this happens, the State Bank can completely return to net buying the US dollar in 2023 to increase foreign exchange reserves, and inject more liquidity into the commercial banking system; thereby, reducing pressure on interest rates to support growth.

Developments in the real estate market have shown that market-based solutions are playing their role. If economic relations are not criminalized, bondholders and issuers can fully reach an agreement on debt restructuring, including debt rescheduling, partial repayment or exchange of debt for shares. Besides, in order to support real estate businesses, the Government also needs to remove cumbersome and unnecessary procedures so that businesses can quickly complete projects, put them into business, generate revenue, and have a profitable business for debt repayment.

In addition, the real estate market will also attract more resources for development next year, if housing prices and real estate investment trusts' stocks have declined to attractive levels. Of course, when market-based solutions are applied, some businesses will have no choice but to accept reduced profits, losses, or even bankruptcy. In other words, real estate businesses ought to share benefits with other actors in the market if they want to get out of the current predicament.

Generally, 2023 is not the year to be optimistic about the Vietnamese economy in general and real estate businesses in particular. However, there is still hope that the country will gradually overcome difficulties to finally achieve the set goals.

Quang Tri province holds potential for tourism development

The central province of Quang Tri is emerging as a bright spot in the central region and especially in the East-West Economic Corridor (EWEC) in terms of potential for tourism development, renewable energy and connecting international trade.

Quang Tri was on one of the fiercest military demarcations in the world, known as a "bomb bag", a "land of fire" or a "dead coordinate" due to the terrible destruction by US bombs.

Before 1975, during the war against the US, the 17th parallel in Quang Tri was known worldwide as a demilitarized zone, also known as the most terrifying temporary military frontier (DMZ - Demilitarized Zone) dividing the South and North of Vietnam.

At this DMZ, the American and forces of the Saigon regime not only dropped thousands of tons of bombs and toxic chemicals. They also developed many impressive war theories to cut off the attack path of the North Vietnamese army as well as to eliminate the desire for peace and unification of the people of the South and North.

It was in this province that many places have become an unforgettable memory of a traumatic and devastating DMZ such as the McNamara electric fence, Ta Con airport, Vinh Moc tunnels, Vay village, Road 9 - Khe Sanh, Tien islet, Mieu slope and Hien Luong bridge - Ben Hai river.

The war is over, wartime wounds are slowly healing and many people around the world including American veterans have returned to Quang Tri. Here, they go on "DMZ tours" with the desire to discover the mysterious things about this land once known as the "dead coordinate".

Today, the type of DMZ tour is probably only available in the Republic of Korea and Vietnam. This kind of tour always has a special attraction, especially for foreign tourists, because it not only evokes people's imagination of a sensitive, dangerous and deadly military confrontation area but also historical problems of the times.

While in the RoK, the DMZ tours often take tourists to visit certain restricted areas in the current demilitarized zone between the RoK and the Democratic People’s Republic of Korea. In Quang Tri these tours will take tourists directly to explore the massive historical system of landmarks, bases and military complexes of the 17th parallel DMZ region.

Quang Tri DMZ tour itinerary usually takes place in one day. According to the itinerary, from Dong Ha, visitors will visit Road 9 where the Road 9-Khe Sanh campaign took place, which is known as the "second battle of Dien Bien Phu" in Vietnam. It is where Rockpile hill, Ta Con airport and the Khe Sanh base are located. Next, visitors will be taken to visit the place of Tien islet-Mieu slope, which is considered a US base and the "eye of god" of the McNamara electric fence. From here visitors will continue to visit the special national relic site - "Hien Luong bridge-Ben Hai river", the most important stop on the DMZ tour at the 17th parallel. It includes Hien Luong bridge which symbolizes the pain that separates the South and the North, the police station at the border line, the observatory, the loudspeaker system with a large capacity used to propagate the struggle to the other side of the line, the museum and the statue cluster "Aspiration for unification". From Hien Luong bridge, visitors will visit the Vinh Moc Tunnels, a unique military work with an underground tunnel system. The total length is more than 2,000m, divided into three floors, the deepest floor is more than 20m, and was used as a place for the people of Vinh Linh district, Quang Tri province to shelter.

The DMZ tour is a unique type of tourism creating its own tourism brand in Quang Tri province, so it is interested in investing and exploiting its own strengths to bring a one-of-a-kind war experience tour for domestic and foreign tourists.

In addition to the strength of the DMZ tour, Quang Tri is also emerging as a land with great potential for island tourism with a coastline of more than 75km with many beautiful untouched beaches such as Cua Viet, Cua Tung, My Thuy, Vinh Thai, Gia Dang and especially Con Co island, a beautiful unspoiled island known as "pearl island" in the East Sea.

With this potential, Quang Tri has a strategy to develop island tourism into the strength of the locality, in which the idea of building a "triangle" of sea tourism of Cua Tung-Cua Viet-Con Co island is the focus to attract domestic and foreign investors to invest in developing Quang Tri into a leading island resort center in the central region.

Retail awaits breakthrough

Many retailers have announced strategies to expand and increase brand influence in 2023, with the retail sector deemed to have more prospects for stronger development.

Mobile World Investment JSC (MWG) announced its 2023 business direction last month, identifying positive growth in revenues and profits as the most important goal instead of focusing on increasing the number of new stores, as in the previous two years.

MWG’s retail chains will only open new stores in areas with strong potential to bring in profits within three months of opening. Although it has not set a specific target for the number of new stores, it will focus on increasing revenue at each, and controlling operating costs to increase profit.

The corporation is the largest retailer in Vietnam based on size, revenues, and profit, and currently operates three retail chains – Mobile World, Dien May Xanh, and Bach Hoa Xanh, with nearly 4,000 stores.

However, the retailer has not achieved total success as Bach Hoa Xanh, specialising in fresh food and essential consumer goods in the southern market, is struggling. Last year, the chain was forced to close more than 400 stores. The brand encountered problems with unclear selling prices and questions about product quality, which angered customers and saw profits drop sharply.

Meanwhile, Masan Group has not announced a development plan this year, but the local retailer has said it would continue to expand its scale and improve its profit margin by upgrading product quality.

WinCommerce is the bright spot in Masan’s retail system with its outstanding advantage in market share and as the only retail platform that develops supermarket and multi-convenience store models. WinCommerce occupies top position in the Vietnamese market, with approximately half of small supermarkets and convenience stores nationwide.

In 2022, WinCommerce opened 477 new Winmart+ stores and four Winmart supermarkets, bringing the number of Winmart and Winmart+ supermarkets to 132 and 3,000, respectively.

The development of The CrownX is also a way for Masan to expand its influence in the retail sector. Last year, Masan launched nearly 100 Win Life stores under a new model, integrating products from WinMart, Techcombank, Phuc Long, and Dr. Win, contributing to increasing the monthly revenue of stores under the new model by approximately 20 per cent.

The company plans to open more than 1,500 new points of sale, bringing the scale of the whole chain to 5,000 supermarkets and stores in 63 cities and provinces in 2023. If successful, WinCommerce will surpass MWG to become the largest retail platform in Vietnam by the end of this year.

Nguyen Thi Phuong, deputy general director of WinCommerce, said, “Towards the goal of serving 100 million Vietnamese consumers, we will continue to expand our coverage and develop WinMart+ stores in suburban areas and the Win Life ecosystem in urban areas.”

Meanwhile AEON, a retailer from Japan famous for its slow and steady strategy, has also begun new changes. First is the standardisation and expansion of the AEON MaxValu supermarket system, followed by the opening of a new compact general merchandise store model and promoting AEON in-house brands manufactured in Vietnam.

By the end of 2022, AEON boasted around 200 stores in Vietnam, including six shopping centres and supermarkets. The company plans to triple the number of trade centres in Vietnam by 2025.

Meanwhile, Thai giant Central Retail announced an additional investment of nearly $850 million in the Vietnamese retail market in the 2022-2026 period. Central Retail is pouring in capital to boost sales in Vietnam to $2.8 billion, aiming for an omnichannel business in the food and shopping mall sectors. Central Retail plans to expand points of sale in Vietnam from 40 locations to 55.

Contrary to some aggressive expansion plans, South Korean group Lotte has not made any special moves, although in the middle of last year, it declared Vietnam its third-most important market after its home country and Japan. Lotte currently owns 15 shopping centres and Lotte Mart supermarkets in Vietnam, and the group plans to open another Lotte Mall in Hanoi this year.

According to the General Statistics Office, retail was one of the industries with the fastest recovery last year, with a growth rate of 10.1 per cent in 2022. According to the Ministry of Industry and Trade, Vietnam’s retail industry has a market size of $142 billion and is forecast to increase to $350 billion by 2025, contributing 59 per cent of the country’s GDP.

Although experts forecast that the economy in 2023 will face many difficulties due to the economic downturn, Vietnam’s retail market has remained vibrant thanks to income growth, a strong recovery of tourism and related industries, and growth momentum from the consumer demand.

Unpredictable times in real estate sector

With issues persisting in terms of cash flow, real estate businesses and investors still hope various bottlenecks will be removed and a struggling market can recover by the end of 2023

The real estate market in 2022 lacked new projects, and even current projects open for sale are facing liquidity issues. Liquidity remains low with an increase in interest rates, a lack of real estate credit, and weak consumer sentiment.

Dat Xanh Group’s consolidated financial statements showed that, by the end of the third quarter of 2022, it had total assets of $1.36 billion, up 11 per cent compared to early last year. However, inventory reached $608 million, up 25 per cent.

For Khang Dien House Trading and Investment, total inventory value reached more than $522 million, up 65 per cent compared to the beginning of the year and accounting for nearly 60 per cent of total corporate assets.

Financial expert Dr. Dinh The Hien said, “Some businesses face the risk of bankruptcy because cash has been poured into many projects. They need to handle inventory and bad debts, and restructure activities, to clear cash flow.”

If the real estate business now borrows more capital from banks to issue bonds but still cannot sell their products, the debt ratio will increase, and the financial pressure will be much greater, according to Hien. “The government needs to consider certain resources to help the market through a difficult period. It could be a certain source of capital that lends or supports interest rates for workers who do not have a home yet. This will create new cash flow for the market while people can buy affordable houses to live in,” he said.

Real estate businesses also have high expectations that legal procedures for implementing project investment will be cleared up.

Duong Tuan Tu, general director of Anh Tuan Investment JSC, an investor in the Lotus Project Residence in District 7, said that his project had been frozen since 2017 due to administrative problems. “The project site has been undeveloped while we have to borrow cash from different sources. So, how can we survive?” Tuan said.

According to the Ho Chi Minh City Real Estate Association (HoREA), legal issues are the biggest problem, accounting for 70 per cent of the difficulties of real estate businesses. Nearly 150 projects in Ho Chi Minh City are facing legal problems. “If there is no timely and effective solution, the market may slide into recession, impacting the whole economy,” said Le Hoang Chau, chairman of HoREA.

Su Ngoc Khuong, senior director at Savills Vietnam said, “For the market to recover, it is necessary to have legal support in project development. We hope that these bottlenecks will be removed soon.”

Khuong acknowledged that Vietnam’s economy is greatly affected by global fluctuations. “In 2023, the market should change cautiously. The residential segment will still maintain stable liquidity. However, limited supply and absence of affordable products will affect things. Segments such as industrial and office real estate are doing well, and businesses will continue to have demand for expansion,” Khuong said.

From a financial perspective, unfinished projects need to be disbursed to continue construction and create new supplies for the market.

In addition, investors need additional capital from foreign direct investment, investment funds or joint venture partners to solve difficult financial problems.

In December at the fifth Vietnam Economic Forum, the Central Economic Commission, in coordination with other agencies, held a symposium on creating a healthier market. According to the Ministry of Finance (MoF), the capital market has gradually become an important medium- and long-term capital mobilisation channel for businesses, including real estate businesses.

By the end of November last year, the capital market size reached nearly 105 per cent of GDP in 2021, of which the stock market capitalisation was equivalent to 64 per cent of GDP. Through the capital market, real estate businesses have mobilised a large amount of capital through the issuance of stocks and bonds to implement investment projects and contribute investment capital. Over 280 real estate enterprises have issued corporate bonds to mobilise medium and long-term capital.

According to the direction of the government, necessary measures will be taken to stabilise and develop the capital market transparently and sustainably to ensure the security of the capital market.

Regarding the completion of the legal and institutional framework, the MoF is coordinating with the Ministry of Planning and Investment to review the overall provisions of the Law on Securities and the Law on Enterprises as well as guiding documents to overcome inadequacies in the stock market.

The MoF is also coordinating with ministries and sectors to amend Decree No.65/2022/ND-CP to suit the current conditions in the bond market. In December, the State Bank of Vietnam decided to increase credit room by 1.5-2 per cent to have an additional $10.4 billion to increase the total credit capital to $19.1 billion to pump into the economy.

The PM also signed directed the handling of urgent issues of the economy and real estate, including on credit capital supply, the corporate bond market, and removing barriers to housing development.

Mekong Delta rice farming to become a leading sector in agricultural production

Farmers in the Mekong Delta contribute over 50% of the country's rice production and 90% of rice exports. However, quality, efficiency, product competitiveness and income of rice farmers in the region remain low.

To increase the rice value chain, adapt to climate change and protect the environment, the Ministry of Agriculture and Rural Development is developing a project on sustainable production of 1 million hectares specialising in high-quality rice cultivation in the Mekong Delta. The project is expected to shift rice farming to become a leading sector in agricultural production with a multi-valued approach.

This is also a programme to implement Resolution No. 13-NQ/TW dated April 2, 2022 of the Politburo on the direction of socio-economic development and assurance of national defence and security in the Mekong Delta to 2030, with a vision to 2045. It will contribute to the implementation of Vietnam's commitment at COP26, and demonstrate production growth and protect the environment.

Dang Kim Son, former Director of the Institute of Policy and Strategy for Agriculture and Rural Development, said with the goal to develop a project of this kind, rice production must be on a large scale to apply harmonious mechanisation and automation.

Vo Tong Xuan, Honorary Rector of Southern Can Tho University, said that Vietnam already has good rice varieties and it is important to pay attention to how to organise production to bring efficiency and ensure sustainable development.

He added that, to make the project work well, it is necessary to have mechanisms and policies in place, as that is how to help find markets and diversify products, thus improving the value of Vietnamese rice.

Deputy Minister of Agriculture and Rural Development Tran Thanh Nam said that not only high-quality rice varieties, the region must ensure sustainable production processes, protect the ecological environment, and reduce greenhouse gas emissions.

Besides, the Ministry of Agriculture and Rural Development will work with localities in the Mekong Delta, industry associations, rice production and trading enterprises, and cooperatives to determine specific deployment production areas for rice production. This will encourage businesses, cooperatives and local authorities in the Mekong Delta to participate in the project implementation.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes



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