Vietnam’s e-Commerce revenue to exceed US$15 billion this year: association

Vietnam’s e-Commerce growth reached 32% last year and averaged about 30% annually since 2016, according to a report by the Vietnam e-Commerce Association (VECOM).
The data was announced at the Vietnam Online Marketing Forum (VOMF) 2020 held by VECOM in Ho Chi Minh City on October 21.

Total retail sales of goods and services online hit around US$11.5 billion in 2019.

The e-Commerce sector is forecast to maintain a growth of more than 30% this year to exceed US$15 billion.

The market size is expected to hit US$43 billion by 2025, ranking third in Southeast Asia, according to earlier forecasts of Google, Temasek and Bain&Company.

A recent report released by the Ministry of Industry and Trade suggests that the e-Commerce revenue may climb 20% in the last quarter of the year to reach US$12 billion by the year’s end if the COVID-19 is still kept under control.

In the early stages of the pandemic (from February to April), 57% of surveyed e-commerce-related businesses reported their revenue growth was below 30% compared to the same period of 2019, with some even seeing negative growth, the report said.

However, 24% of businesses saw revenue increasing more than 51%.

E-commerce revenue in the first six months declined 6% year-on-year despite the number of transactions increasing by 25%. Most transactions at that time were of low value.

In case the pandemic worsens and adversely impacts production and consumption, supply and operation of transport and catering services, growth could reach only 13% with estimated market value of US$11 billion.

In May, the Government approved the national e-commerce development master plan for 2021-2025, targeting an annual industry growth of 25% with more than half of the population shopping online and average spending of about US$600 per person per year by 2025.

Business-to-consumer (B2C) sales will rise 25% per year, accounting for 10% of total retail sales of goods and services. Cashless payments in e-commerce would make up 50% and about 70% of transactions on e-commerce platforms have electronic invoices.

 

Source : NDO/VNA

Photo : File

Vietnam’s 2020 budget deficit seen at 5.59% of GDP, exceeding target

The deficit is forecast at VND319.5-328 trillion ($13.7-14-1 billion) this year, or 4.99-5.59 percent of GDP, VnExpress cited Minister of Finance Dinh Tien Dung while telling the National Assembly Tuesday.

This is because revenues have fallen and regular expenses risen due to the Covid-19 pandemic, he added.

Lawmakers said they had anticipated the high deficit.

Nguyen Duc Hai, chairman of the Financial and Budget Committee of the National Assembly, said the rising deficit was „reasonable,“ given the pandemic situation.

This figure could rise further as the government has not been able to sell its stake in many state-owned companies, he added.

But Hai also expressed concern that many people and businesses have not been able to benefit from the increased government spending.

The fact that direct repayment obligations could reach 25 percent of total revenues this year is a risk and could pose threats to national financial security, he added.

Nguyen Duc Kien, head of the Prime Minister’s advisory team, noted that the deficit of most countries would rise this year due to the pandemic, and Vietnam, although falling short of this target, was „a bright spot“ in the global context.

Source : Nhip Cau Dau Tu Magazine

Photo : VAM

HCM City licences 30,000 new businesses in nine months

As of the beginning of October, Ho Chi Minh City has licenced nearly 30,000 new businesses with combined registered capital totaling 667 trillion VND (28.64 billion USD), according to the municipal Department of Planning and Investment.

 

Hanoi – As of the beginning of October, Ho Chi Minh City has licenced nearly 30,000 new businesses with combined registered capital totalling 667 trillion VND (28.64 billion USD), according to the municipal Department of Planning and Investment.

The number of newly-established enterprises declined 7.5 percent compared to the same period last year; however, their registered capital was up 34.7 percent year-on-year.

The southern hub lured 3.25 billion USD in foreign direct investment (FDI) in the first nine months of this year, down 28 percent from a year earlier.

Up to 407.4 million USD was poured into 719 newly-licenced projects, 283.8 million USD added into 163 underway projects, and 2.56 billion USD invested in 2,911 share trading deals.

Trade was the leading sector in FDI attraction with more than 751 million USD, accounting for more than 23 percent of the total. It was followed by the property sector with 726.8 million USD, and science-technology with 685.5 million USD.

The department revealed that in the future, the city will prioritise three investment areas: smart city, highly interactive and innovative urban area to the East HCM City, and regional and international financial centre construction.

 

Source: VNA

Photo: VAM

Vietnam’s export growth expected at 3-4 percent this year

Vietnam’s exports this year could grow by 3-4 percent despite the COVID-19 pandemic, according to the Ministry of Industry and Trade (MoIT).

The ministry said in the first nine months of the year, the country’s export activities still maintained positive growth while many economies in the world and the region saw negative growth. This shows local production activities have gradually recovered after being hit by the pandemic.

Statistics from the ministry showed that the export turnover in January-September period increased by 4.1 percent over the same period last year. Notably, the export turnover in the third quarter of the year reached 80 billion USD, representing an 11 percent year-on-year increase and up 34 percent from the previous quarter.

“This showed that exports have recovered positively in the third quarter of 2020. This recovery focused on the group of processed industrial goods, with the export turnover increasing by 4.7 percent over the same period in 2019, accounting for 84.6 percent of the total export turnover,” said Deputy Minister Do Thang Hai.

Imports decreased by 0.7 percent compared to the corresponding period last year, but turnover decreased in groups that do not serve production, such as less than 9-seat cars; cameras, fruits and vegetables. Meanwhile, imports of mainly raw materials and fuels for production only decreased by 0.3 percent over the same period last year.

Therefore, in the third quarter of 2020, the import turnover reached 68.5 billion USD, up 3 percent over the same period last year and 18.5 percent over the previous quarter, showing that production began to recover, increasing import demand.

Hai said the ministry has reviewed sectors to update and consider solutions to remove difficulties for businesses, promoting production and exports.

Industrial production, exports and domestic trade for the whole year of 2020 are expected to be more positive than the assessment in July.

“Exports to the US and other markets would also have a higher growth rate compared to the beginning of the year due to the increasing demand for consumption in the last months of the year,” he added.

EVFTA enhances growth

Vietnam officially implemented the Vietnam – EU Free Trade Agreement (EVFTA) from the beginning of August. The implementation has seen positive results. In addition to seafood, prices of rice exported to the EU have increased compared to before the agreement took effect.

Many other products such as mobile phones, machines, spare parts, garments and textiles, seafood and coffee were also expected to see an increase in export turnover in the European market.

Tran Thanh Hai, Deputy Director of MoIT’s Import-Export Department, said in August, Vietnam’s export turnover to the EU reached 3.25 billion USD, up 4.65 percent over the same period last year. In September, export turnover to this market continued to maintain strong momentum, up about 14.4 percent over the same period last year.

“The positive results showed that the implementation of the EVFTA has helped businesses take advantage of the market, especially in the context that the economy has been heavily affected by COVID-19. Currently, businesses have applied the provisions of the EVFTA,” Hai said.

The ministry would promptly provide information on the market to businesses, through coordinating with trade agencies as well as trade promotion organisations, helping businesses develop better plans.

It would also increase trade promotion and brand building. Recently, many businesses have promoted the application of digital technology in organising trade promotion activities online. The trade facilitation will also continue to be promoted by the MoIT. It would review and simplify regulations on business conditions; as well as co-ordinate with industries to cut logistics costs.

“In the long term, the MoIT would co-ordinate with industries to promote production restructuring to increase high-quality export products, to meet the market’s demand and increase the localisation rate in exports. For agricultural products, the ministry will co-ordinate with the Ministry of Agriculture and Rural Development to promote large scale agricultural production associated with preservation, processing, purchasing and consumption and thereby promote the production linkage,” he added.

Source : VNS

Photo : VAM

Economists see Vietnam’s 2020 GDP to grow 3.8%

At a worse scenario, the country’s GDP could grow only 2.2 percent due to adverse developments of the COVID-19 pandemic, said Pham The Anh, chief economist at the institute.

In the second quarter, despite the global outbreak of COVID-19 seriously affected all of economies, Vietnam became one of the few countries reporting economic growth with 0.36%, while the average CPI decreased due to a sharp decline in domestic gasoline prices.

For the first six months of the year, GDP increased by 1.81 percent, according to data from statistic office.

VEPR experts said that Vietnam’s economic prospects in 2020 depends on the ability to control the disease, not only domestically but also in the world.

Chief Economist of BIDV Can Van Luc, who has similar forecast with VEPR, said the country’s GDP growth this year could be about 3%. In the best scenario, Vietnam’s economy could grow 4%, according to the government news portal.

The weakness of Vietnam’s economy came from internal risks such as large fiscal imbalance, the speed and level of development investment and infrastructure building slowdown.

Although the health of the banking and financial system had been gradually strengthened, it was still vulnerable, according to the experts.

The economy was much dependent on growth of the FDI sector and the lack of technological and raw material autonomy.

Source : Nhip Cau Dau Tu Magazine

Photo : VAM

Siemens CEO urges German firms to invest in Vietnam

CEO of German tech giant Siemens AG and Chairman of the Asia-Pacific Committee for German Business (APA) Joe Kaeser has called upon German firms to invest in Vietnam as part of efforts to diversify supply chains.

 

Hanoi – CEO of German tech giant Siemens AG and Chairman of the Asia-Pacific Committee for German Business (APA) Joe Kaeser has called upon German firms to invest in Vietnam as part of efforts to diversify supply chains.

Speaking at an APA teleconference on October 19, Kaeser said that Asia, not just China, is an important investment destination.

He stressed that a number of multinational groups have poured a great deal into Vietnam while Germany is also stepping up vocational training in the country.

Enterprises, he said, could quickly seek business opportunities in the country.

German Federal Minister for Economic Affairs and Energy Peter Altmaier called on German firms in Asia to seek alternatives in diversifying regional supply chains.

Germany supports globalisation and wants to diversify supply chains, he said, adding that it needs to build greater resilience to future crises.

The APA conference was first held in 1986 with the aim of bolstering economic ties between Germany and the Asia-Pacific.

This year’s discussions focused on the economic toll from COVID-19, the modernisation of trade policy to ensure global supply chains, and the digitalisation strategies in Asia and Europe.

Source : VNA

Photo : Siemens

Vietnamese exports to India likely to rise by 633 million USD

Vietnamese businesses could increase exports to India by 633 million USD annually, the Standard Chartered Trade Opportunity Report has revealed.

 

Hanoi Vietnamese businesses could increase exports to India by 633 million USD annually, the Standard Chartered Trade Opportunity Report has revealed.

The study also found that Indian exporters could boost trade with Vietnam by an estimated 475 million USD, bringing the bilateral trade opportunity to 1.1 billion USD.

The ASEAN markets in the study (Indonesia, Malaysia, Singapore, Thailand and Vietnam) have a combined opportunity of 10.7 billion USD to increase exports to India.

The research tracks high potential exports, defined as goods or services where businesses have added value with the borders of their home market. As markets look to recover from the impact of COVID-19, the study champions global trade as a key lever of prosperity, highlighting the sectors with the greatest opportunities for growth.

Vietnam’s wholesale and retail trade services sector has the most to gain, with an 87 million USD opportunity.

India is now one of Vietnam’s top 10 trading partners, and Vietnam ranks India’s fourth-largest ASEAN trading partner. With the shifts in supply chains post COVID-19, the India-Vietnam trade route could become increasingly important for international businesses.

Other Vietnamese sectors with significant opportunities in India are transportation and storage services; cotton (including sewing thread, yarn and fabric); office admin and other business support services and knitted clothing.

Nirukt Sapru, Chief Executive Officer, Vietnam and ASEAN & South Asia Cluster Markets, Standard Chartered, said Vietnamese and Indian efforts to grow trade between the two markets have clearly been working, with bilateral trade growing at the steepest rate ever recorded.

„As Vietnam plays an increasingly important role in global supply chains, its relationship with India is likely to strengthen further – especially with India investing close to 2 billion USD in over 200 projects in Vietnam. As this study shows, India presents many opportunities for Vietnamese companies seeking new and fruitful avenues for growth,” he said.

The study estimates that India could increase high-potential exports to Vietnam by 475 million USD annually, or 12 percent.

The Standard Chartered Trade Opportunity Report identifies opportunities at a sectoral level, across both goods and services, between India and 10 of its key trading partners. The study contrasts actual export values with potential export values – calculated by an economic model – to uncover medium-term opportunities, looking to a post-COVID-19 world as economies begin to reopen.

Overall, the study reveals opportunities totalling an estimated 38 billion USD annually: a 21 billion USD opportunity for the 10 markets to increase exports to India, and a 17 billion USD opportunity for India to increase exports in the other direction.

Source : VNS/VNA

Photo: File

Vietnam’s 2021 economy expected to grow 5-7.5%: central bank

The regulator has released growth forecast of the country’s GDP growth next year, based on two scenarios.

In a brighter situation, when Vietnam successfully controlled the pandemic and the situation is also under control in global scale, the country’s GDP growth for 2021 is expected to reach 6.5-7.5 percent.

In a worse scenario, if the pandemic continues to hit economies in the first half of 2021, Vietnam’s GDP growth in 2021 could reach 5-6 percent, central bank said.

Next year, domestic and international organizations forecast Vietnam economy will recover strongly and Vietnam will be among the group of countries with high growth rates compared to the region and the world, ranging from 6.3 -11.2 percent.

Despite the complicated developments of the Covid-19 pandemic, the State Bank of Vietnam estimates 2020 GDP growth from 2.5 -3 percent, while international and domestic organizations forecast that Vietnam’s economic growth in 2020 will be between 1.5-3.3 percent.

Source: Nhip Cau Dau Tu Magazine

Photo: VAM

Infrastructure development at the centre of PPP decree direction

Further clarifying the legal framework for infrastructure development via wider participation of private investors is expected to help the country attract more funding into the industry.

The Ministry of Planning and Investment is now compiling two decrees to guide the implementation of the Law on Public-Public Partnership Investment. They include a decree on detailing the law and another one on selecting investors.

The new Law on Public-Private Partnership Investment adopted by the National Assembly in June and will come into effect on January 1, 2021.

In fact, many investors’ expectations are high that the nation will further foster private investors for public-private partnerships (PPP) to support local infrastructure development. The law contains important improvements and implications to ensure cost-effective and predictable project implementations, and aims to attract more private and foreign investment by clarifying the existing legal framework.

The Vietnamese government hopes to show its commitment to domestic and foreign financiers and create a secure environment for them when participating in PPP projects.

This year, Vietnam has made significant efforts to revise its legal framework for infrastructure development since January. At that time, businesses were concerned with corresponding laws that they considered a limiting factor for Vietnam’s economic development and said that the state should come up with a comprehensive strategy on judicial reform to continue its infrastructure expansion.

Dr. Tran Tho Dat, member of the prime minister’s Economic Advisory Group, said that within ASEAN, countries like Indonesia, Thailand, and Malaysia are evolving their infrastructure faster than Vietnam, adding that, “If we do not catch up, the Vietnamese economy is likely to lag further behind.”

Although Vietnam has been a dynamic country with frequent legal changes, Dat remains concerned about the limitations of the nation’s infrastructure system. “Planning, especially in large cities, has not met the requirements regarding connection efficiency and quality. The transport system remains weak and cannot yet support the country’s development goals of industrialisation and modernisation,” he concluded.

According to the World Bank’s report “Vibrant Vietnam – Forging the Foundation of a High-Income Economy,” published in June, about 90 per cent of the nation’s residential infrastructure is invested in by the state. Meanwhile, private funding has remained low at just under 1 per cent of GDP during the past decade, with most of this being poured into the energy sector.

Vietnam has further prioritised infrastructure development and encouraged the private sector to rely on the regulations stated in Decree No.15/2015/ND-CP issued in February on investment in the form of PPP, which so far has been the only legal framework for private investments in public infrastructure.

Although Decree 15 specified procedures that authorities must follow when bidding on PPP projects and removed the limits of 30 per cent for government funding, the decree’s regulations have not yielded the expected results.

No project was bid on by more than one eligible or interested investor, although as the World Bank’s report stated that 18 PPP projects out of 53 were competitively bid on. The decree’s requirements have created burdens with crafting feasibility studies and undertaking competitive bidding, while most ministries and agencies have not been prepared for this.

As a result, the private sector has not participated heavily in infrastructure investment. The World Bank’s data also shows that, since 1990, only 116 PPP projects with a total value of $19.4 billion have been approved in Vietnam, equal to less than 10 per cent of total investment in infrastructure since then. Additionally, approximately 75 per cent of PPP schemes were implemented in the energy sector.

According to analysts, the country currently does not have enough capital or suitable solutions within its financial system to meet the investment needs for local infrastructure projects. Moreover, local banks so far limit outstanding loan increases as public infrastructure ventures require long-term capital supply and banks are not ready to lend to new private and small developers.

Thus, as neither state budget nor local banks could be the solution, the government has been required to find alternatives to finance public infrastructure developments. With the new law on PPP investment, it is hoped some groundwork will be carried out imminently.

Source : vietnamnet.vn

Photo : File

Conference boosts Vietnam-Germany trade, investment promotion

A virtual conference on trade and investment promotion between Vietnamese and German enterprises was held on October 15.

 

Berlin – A virtual conference on trade and investment promotion between Vietnamese and German enterprises was held on October 15.

Speaking at the event, jointly held by the Trade Office at the Vietnamese Embassy in Germany and the Ministry of Industry and Trade’s Trade Promotion Agency, Vietnamese Ambassador Nguyen Minh Vu stressed the bilateral cooperation has been expanded in many fields and seen remarkable achievements, especially after the two countries upgraded their ties to the strategic partnership level in 2011.

Germany has been one of Vietnam’s most economic partners in the European Union for years, with two-way trade hitting 14 billion EUR (16.39 billion USD) in 2019 – a fourfold increase compared with that of 2009.

Germany is one among four EU nations investing most in Vietnam with 361 valid FDI projects.

Meanwhile, Vietnam is among Germany’s three biggest economic partners in ASEAN, Vu stated.

He stressed that the EU-Vietnam Free Trade Agreement, which has become effective, and the pending EU-Vietnam Investment Protection Agreement will open up brighter prospects for economic collaboration between the two countries.

The diplomat expressed his hope that through the conference, participating enterprises will build up substantial and win-win cooperation to bring into full play opportunities brought about by the bilateral relations.

Director of the Trade Promotion Agency Vu Ba Phu affirmed that his agency always supports efforts to boost Vietnam-Germany trade cooperation, and well do its role as a bridge connecting the two countries’ businesses.

Participating enterprises from both sides share experience in opportunities and challenges brought about by the EVFTA.

 

Source: VNA

Photo: File