VietNamNet Bridge – While international delivery firms have many years of experience and good infrastructure, domestic firms have made heavy investment in the field only over the last five years.

Luong Ngoc Hai, General Director of Viettel Post (VTP), which has been present on the market over the last 15 years, admitted that the satisfactory business performance was only seen in 2012, when it obtained the turnover of VND883 billion thanks to the cost saving solutions. It strives to obtain the turnover of VND1 trillion in 2013, of which delivery and forwarding services would bring 65-70 percent.

Hurrying to develop infrastructure items

It’s obvious that international firms have great advantages over Vietnamese in terms of financial capability, technology and the global networks. DHL, UPS, FedEx and TNT all have spent money to develop modern infrastructure in localities, which allow to connect them with more than 200 markets in the globe. The services have been designed in the way which can optimize the profits and satisfy customers’ demand.

Meanwhile, the oldest Vietnamese delivery firm was born just some 10 years ago, which are not grown up in both operation scale and network. The firms are mostly located in big cities.

Therefore, domestic firms need to apply flexible competition methods and gather strength on the suitable market segments.

Hai said while delivery firms now focus on developing services in the central regions, VTP would take full advantage of the large network of 15,000 telecom collaborators to provide services to every commune. It would also pay attention to added freight forward, logistics and e-commerce services, while utilizing modern technologies to control the service quality.

VNPost is considered a “big guy” in the market thanks to the large delivery network which reaches out to every commune. However, it has to start again from scratch after getting split from VNPT.

VNPost earned VND3.3 trillion in turnover in 2012, but the balancing in receipts and expenses is only hoped to be obtained in 2013.

Established as the deliverer of mailers, parcels, and distributor of newspapers, VNPost has expanded its business to international express delivery, social insurance payment and insurance products distribution. It hopes to obtain the revenue of VND12 trillion by 2015 and increase the figure by 4-5 times by 2020.

Leaning on giants’ shoulders

The existing logistics firms in Vietnam can be divided into three main groups. The first one includes the foreign invested or joint venture companies which target the international groups operating in Vietnam. The firms have been deeply participating in the global supply chains.

The second group includes the 100 percent state owned corporations or economic groups, mostly transport or foreign trade companies. The advantage of the companies is that they once nearly dominated the domestic freight forwarding market; therefore, they have diversified clients.

The third group includes private firms which take part in some certain links of the supply chain.

Hai said Vietnamese firms, which remain young and inexperienced, need to “lean on giants’ shoulders” when reaching out to the global market. VTP, for example, is seeking reliable strategic partners to implement its development strategy in the quickest and most effective way.

As for VNPost, a senior executive of the company said the cooperation with foreign enterprises under the outsourcing mode would help Vietnamese firms more deeply penetrate the market.

SGTT