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VIETNAM BUSINESS REVIEW | FINANCE 1
E-COMMERCE
E-commerce market size set to peak at $15b by 2020
E-commerce firms urged to spend money on m-
commerce
Grab now has more rivals than ever before in Vietnam
START-UP
Top startup trends in Vietnam confirm hi-tech bias
Google to support Vietnamese startups go global
FINANCE
All Vietnamese commercial banks to be listed before
2020
Consumer finance spread its wing
Highlight
Vietnam featured in world’s top
10 emerging markets logistics Vol 10, March 13th 2019 What’s in it today?
LOGISTICS
Vietnam featured in world’s top 10 emerging markets
logistics
South Korea eyes deep sea port project in Haiphong
INVESTMENT
Chinese firm wants to invest in Vietnam expressway
projects
Samsung Life seeks to acquire shares in Vietnam’s
largest insurer
RETAIL
Will IKEA be strong enough to remap the Vietnamese
furnishing market?
Card-not-present fraud will cost retailers $130b
Altered appearance for healthy and beauty retail
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VIETNAM BUSINESS REVIEW | FINANCE 1
FINANCE
All Vietnamese commercial banks to be listed before 2020
A Prime Minister approved plan requires all commercial joint stock banks to be listed before 2020
towards increased transparency and diversity. This is one of a series of solutions set out in the scheme
to “Restructure the stock market and insurance market by 2020 with orientation towards 2025”
approved by the Prime Minister late last month.
Accordingly, commercial banks are required to list on any of Vietnam’s three official stock exchanges –
the Ho Chi Minh Stock exchange (HOSE), Vietnam’s main exchange which accounts for over 90% of total
market capitalization; the Hanoi Stock Exchange (HNX), which houses remaining listed companies; and
the Unlisted Public Company Market (UPCoM), which is set up to encourage unlisted public firms to
participate in the securities market so that they can later transfer to one of the two main stock markets.
Currently, only 17 of 31 banks are registered for trading on all three floors.
The Prime Minister has assigned the Ministry of Finance and the State Bank of Vietnam (SBV) to
supervise and direct banks on listing, securitizing debts, provision of required services for derivatives
trading, as well as monitor domestic and capital sources on the market.
Last year, PM lauded Vietnam’s stock market for outperforming other Southeast Asian nations in capital
mobilization, with a market cap of 72% of GDP at the end of 2-10.
Consumer finance spread its wing
The country’s consumer finance sector is striving harder to serve those who currently find banking
services to be out of reach, while simultaneously driving away ubiquitous shadow banking groups.
On March 15, VIR will organise the third seminar on consumer finance in Hanoi, with the theme
“Developing consumer finance as a solution to ward off shadow banking”
Experts in the financial sector, together with consumer finance executives, will answer questions related
to this fast-growing industry. Topics include the current market size of Vietnam’s consumer finance
segment, how personal consumption can be financed with legal lenders, and regulatory updates to
ensure transparency for borrowers and lenders. The seminar will be live-streamed on VIR’s websites and
social media channel
In Vietnam, formal financial services remain a luxury to much of the population. Informal providers, such
as loan sharks or pawn shops, still thrive in rural areas and down small city alleyways.
According to the World Bank, only 30% of the Vietnamese population has a bank account, compared to
more than 60% in other developing countries in the Asia Pacific region. Moreover, only 37% of
Vietnam’s citizens borrow money from a formal lender, compared to more than 71% in neighbouring
Thailand.
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VIETNAM BUSINESS REVIEW | FINANCE 2
However, downsides remain about informal financial services. Not only do loan sharks charge exorbitant
rates, they also resort to harassment and violence when the borrower defaults
One possible answer is the use of consumer finance firms, who offer unsecured loans for small
purchases such as electronics and motorbikes. Since their inception, these businesses have grown at a
dramatic rate. The National Financial Supervisory Commission noted that credit from Vietnam’s
consumer finance firms grew by 65% in 2017, which is 3.5 times higher than the average growth of 19%
for all credit types.
According to experts, the market for consumer finance is high in potential as half of the Vietnamese
population is under 40 years old, the middle class is burgeoning, and domestic consumption is booming.
These consumers want easy access to banking services and loans.
In fact, over the past three years, scores of foreign and domestic banks have conducted mergers and
acquisitions (M&A) in order to seize this opportunity. HDBank has been co-operating with Japan’s Saison
to run HD Saison, Military Bank partners with Shinsei, and Techcombank sold Techcom Finance to South
Korea’s Lotte Card. Prudential also parted ways with its consumer finance business, which was then
taken over by Shinhan Bank.
According to some consumer finance firms, one particular challenge is to differentiate themselves from
the loan sharks. For example, in Thanh Hoa alone, there are 130 loan shark groups who call themselves
consumer finance businesses, together with 790 pawn shops with shadow banking services.
Nguyen Mai Long, CEO of Easy Credit, acknowledged that illegal money lenders disguise themselves as
consumer finance firms. Consumers may find this confusing, especially due to low awareness and
financial literacy.
Another headache for consumer finance firms is competition, which means they must constantly
innovate and set themselves apart from a rising number of rivals. One option is venturing into the credit
card segment, which helps these firms retain customers and promote frequent borrowings.
In 2018, Home Credit introduced a VISA credit card that it claimed is “superior to credit cards by banks”
thanks to a range of waivered fees. The cash withdrawal fee is 3%, which Home Credit said is much more
reasonable than other cards in the market. Similarly, FE Credit said that consumers can borrow up to
VND60 million ($2,600) via its Mastercard, whose annual charge and withdrawal monthly rates are said
to be lower than commercial banks.
Other competitors, such as Japan’s JACCS, are also luring credit card users with promises of a 30-minute
approval process, high withdrawal limits, low fees and other benefits. Perks include cashback, gifts, and
discounts at various stores.
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VIETNAM BUSINESS REVIEW | E-COMMERCE 3
E-COMMERCE
E-commerce market size set to peak at $15b by 2020
The booming ecommerce market in Vietnam is expected to beat the previous revenue forecast of US$10
billion and reach US$15 billion by 2020, a trade official has said.
Addressing a recent workshop, Dang Hoang Hai, head of the Vietnam eCommerce and Digital Economy
Agency under the Ministry of Industry and Trade, revealed the domestic e-commerce sector obtained a
growth rate of 30% last year as its total revenue sales amounted to some US$8 billion. This far outstrips
the figures of US$5 billion in 2016 and US$6.2 billion in 2017.
Thanh Nien (Youth) newspaper cited preliminary statistics that as many as 67% of local internet users
have made an online purchase at least once. Further figures show that up to 82% of online buyers made
cashless payments after delivery.
Last year, many overseas research entities made positive noises about the domestic ecommerce market.
The e-Conomy SEA 2018 report by US tech giant Google and Singapore’s Temasek Holdings Private
Limited indicates that e-Commerce is experiencing healthy growth across all Southeast Asian countries.
The report notes
that Indonesia was
leading the way in
the region, reaching
US$12 billion in
2018 and
accounting for more
than US$1 in every
US$2 spent in the
region.
Moreover,
ecommerce adoption has also accelerated in Thailand and Vietnam, reaching nearly US$3 billion during
2018.
In a trend seen across all markets in the region, Southeast Asian consumers increasingly rely on
ecommerce to buy a wide range of products that are unavailable in stores.
This largely stems from a relative lack of development of modern retail channels outside of major urban
areas.
According to online shopping aggregator iPrice Group, of the 10 most successful ecommerce platforms
in 2018, five of them are currently conducting business in Vietnam, including Lazada, Shopee, Tiki,
Thegioididong, and Sendo.
SEA e-commerce market size (GMV, $B)
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VIETNAM BUSINESS REVIEW | E-COMMERCE 4
E-commerce firms urged to spend money on m-commerce
Vietnamese businesses are still reluctant to invest in m-commerce despite the boom in smartphone use
in the country.
Pine Kyaw, CEO of Shopee Vietnam, said last year that m-commerce would become more popular
because smartphones now have larger screens and security solutions are more reliable.
However, Vietnamese businesses are still reluctant to invest in m-commerce.
The E-commerce Index Report 2018 of the Vietnam E-commerce Association (Vecom) showed that of
the businesses which have mobile websites or mobile apps, 42% allowed buyers to conduct all stages of
the shopping process on mobile devices, and 29% ran promotion programs specifically applied to those
who bought goods with mobile devices
The figures of 2017 are nearly the same as 2016. This means that m-commerce development has slowed
down with the unchanged number of websites compatible with mobile devices, accounting for 17% of
surveyed businesses, or 2% lower than 2016 and 9% lower than 2015.
Explaining this, Vecom said that many e-commerce firms still cannot find benefits from m-commerce,
and that the demand for shopping on mobile platforms is seen only in Hanoi and HCMC.
iPrice reported that Vietnam’s e-commerce firms have the highest proportion of e-commerce website
visits converted to orders in Southeast Asia – 65%. However, the conversion proportion on desktop
computers is 1.7 times higher than mobile devices.
However, Vecom’s deputy chair Nguyen Ngoc Dung have advised businesses to update with the latest
m-commerce trends to keep their competitive edge.
If businesses spend money to develop m-commerce, their e-commerce websites or e-commerce trading
floors will be better to access customers, thus helping improve competitiveness. If not, they will lose a
high number of potential customers, who have the habit of accessing internet from tablets and
smartphones.
iPrice’s reports about the ranking of Vietnam’s leading e-commerce firms show that investment in m-
commerce has brought certain effects.
Shopee, The Gioi Di Dong (Mobile World), Lazada, Tiki and Sendo, which have invested in m-commerce
channels, have high rankings. Shopee, for example, ranks first in iOS and Android app stores, followed by
Lazada and Sendo.
Grab now has more rivals than ever before in Vietnam
From an e-hailing app, Grab has made great steps forward, providing many different services. Most
recently, it started the payment service GrabPay and lending service Grab Financial.
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VIETNAM BUSINESS REVIEW | E-COMMERCE 5
The consumer lending market in South East Asia is very large. As estimated by the World Bank, about 2
billion people in the world cannot access bank services, and most of them are in Asia Pacific.
The non-cash payment market, according to Grab, is worth $500b in South East Asia.
Consumer lending is a fertile business field for Chinese e-commerce firms. The firms offer online
payment apps to users to ‘learn’ about their financial capability.
Grab, as an app, quickly attracted users, especially investors. Just within six years, Grab became an
unicorn company, i.e. an unlisted technology firm with valuation of $1 billion and higher, in South East
Asia. Analysts estimate that Grab is valued at $6 billion.
The total number of Grab downloads has reached 95 million all over South East Asia. This could serve as
the launch pad for it to conquer the consumer lending market.
The challenges
“GrabPay e-wallet will be used for both transport and food delivery services, two of the most used
services in South East Asia,” said Jerry Lim, director of Grab Vietnam.
However, the analyst said, by expanding its business, Grab would have to compete with more rivals who
are ‘powers’ in their fields. In online payment, for example, it will have to compete not only with AirPay
(Sea) and Alipay (Alibaba Group), but also with local firms such as ZaloPay (VNG) and MoMo.
In Indonesia, Grab bought an e-commerce platform, Kudo, in April 2017. Grab believes that this is the
factor which can help expand GrabPay. However, in Vietnam, Grab’s two big rivals – Sea and Alibaba —
both have strong support from two popular e-commerce floors – Shopee Vietnam and Lazada Vietnam.
Similarly, GrabFood has rivals in the food delivery sector, where Sea’s Now, which inherited the large
custom from Foody, is the leader.
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VIETNAM BUSINESS REVIEW | START-UP 6
START-UP
Top startup trends in Vietnam confirm hi-tech bias
The most funded startup categories in Vietnam last year were all based on advanced technological
applications. 92 major investment deals totaling $889 million were struck in Vietnam last year.
The investment in Vietnamese startups tripled from 2017.
Among these, the top five areas in attracting funding were Fintech, E-Commerce, Travel Tech, Logistics
and Education Tech.
Fintech
Fintech ranked first with 8 deals worth $117m last year. The value of Vietnam’s fintech market is set to
increase from $4.4 billion in 2017 to $7.8 billion in 2020.
But fintech remains a new category in Vietnam with a small-scale ecosystem compared to other ASEAN
members like Singapore and Indonesia, it said.
While most startups are currently operating in online payment, e-wallet and peer-to-peer lending, the
market lacks development in insurance tech, credit scores and crowd-funding, it added.
E-commerce
E-commerce attracted 5 major deals with a total investment of $104m last year.
The e-commerce market in Vietnam has a promising future with 53% of the population using the
Internet and almost 50 million smartphone subscriptions among population of over 94.6 million.
The number of e-commerce customers grew by 2.6% from 2017 to 49.8 million last year, accounting for
over half of the country’s population.
Travel tech
8 major travel tech deals worth $64m were signed last year. The funding was obtained by online flight
and accommodation booking services like Vntrip, Luxstay and Atadi.
The development of social networks allows more travel services to be established, leading to higher
demand.
Logistics
Logistics startups in Vietnam raised $54m last year.
Vietnam has seen new startups in the logistics sector in recent years, including "Uber for truck" app
Logivan and ride-hailing FastGo.
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VIETNAM BUSINESS REVIEW | START-UP 7
With over 1 million trucks, the truck transport market is worth $23b with an annual growth of about
14%, it is estimated.
But 90% of transport businesses are small operations with less than five trucks, and 70% of trucks return
empty after dropping off their load.
This makes the logistics cost over GDP ratio in Vietnam high at 23%, compared to 15% in China and 8% in
Singapore.
Education tech
With 23.4 million students in a fast-growing economy, Vietnam is seen as a market with great education
tech (edtech) potential. Last year, edtech startups in Vietnam raised $54m.
Google to support Vietnamese startups go global
ELSA has raised $7 million in a Series-A round from Google’s AI Fund Gradient Ventures and other U.S.
investors. The investment round for ELSA, a mobile app that uses artificial intelligence and speech
recognition
Google will support Vietnamese startups with cloud services worth up to $100,000 each to help them go
global.
This offer was made public at the Google Cloud for Startups workshop held recently in HCMC with the
participation of hundreds of entrepreneurs.
Qualified startups can sign up for one of three support packages, with value ranging from $3,000 to
$100,000 a year.
The packages include Google G Suite, a cloud computing brand of tools and software that allows
startups to test and improve their digital products.
Vietnamese startups that qualify for the support are those that are less than five years old and have
received no more than Series A funding, or the first round of financing that a startup receives form a
venture capital firm.
They should also be developing their products and services digitally.
Vietnam is among six countries in Southeast Asia that Google has offered this support to.
The country has had a vibrant startup industry in recent years. Last year, investment in Vietnamese
startups tripled from 2017 to $889 million, according to startup accelerator program Topica Founder
Institute.
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VIETNAM BUSINESS REVIEW | RETAIL 8
RETAIL
Will IKEA be strong enough to remap the Vietnamese furnishing market?
A source from the Hanoi People’s Committee said IKEA is planning to develop a system of retail centers
and storehouses in Hanoi with investment capital of $450m.
IKEA is moving ahead with a five-year plan to expand to Southeast Asian and South American markets.
As for Southeast Asia, the Swedish manufacturer plans to enter Vietnam and the Philippines after it
opens in Singapore, Malaysia and Thailand. The company will open 25 shops a year.
Analysts say that IKEA has great advantages in the Vietnamese market. The brand has been known to
Vietnamese for many years. IKEA has massive production which allows it to set low selling prices.
Gilimex, Nam Phat Steep and Scansia Pacific have been doing outsourcing for IKEA for many years.
The businesses said under contracts with IKEA, they could make net profit of 4-5% per product, much
lower than the amount they can expect from other partners (15-20%). However, orders from IKEA are
always big, which can bring stable profits
IKEA sets international standards for Vietnamese outsourcing enterprises to observe and it also gives
support to enterprises to develop FSC (forest stewardship council) growing areas. Thus, the cooperation
with IKEA with help Vietnamese penetrate the world’s furnishing market worth $140b.
IKEA’s presence all over the globe is also a big advantage. Despite the stiff competition, IKEA has been
growing rapidly with revenue of $39.3b in 2017. However, the growth rate is slowing down.
By penetrating new markets, IKEA hopes the manufacturer will obtain 8-9% growth rate in the upcoming
years. Emerging markets are places where IKEA has good positioning as it targets the middle class which
is booming.
The Vietnamese wooden furniture market has an average consumption level of $21 per head per
annum.
A report from Hawa showed that domestic furnishing sales reached $4b in 2018 and the large scale has
attracted thousands of enterprises, most of which are distributors and retailers.
These include Nha Xinh (now AKA), Pho Xinh, Nha Vui, X’Home, Tavico and Home’Furni.
In Vietnam, IKEA will have to compete with foreign rivals including UMA from Sweden, Ashley from the
US, Index Living Mall from Thailand and Kimsfullhouse from South Korea.
Meanwhile, sources said more furnishing brands from Denmark, Germany and Sweden are jumping into
Vietnam.
In 2018, Vietnam spent $500m to import wooden furniture products, 63% of which were from China,
11% from South Korea and the remaining from Italy and other sources.
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VIETNAM BUSINESS REVIEW | RETAIL 9
Card-not-present fraud will cost retailers $130b
Increasingly complex card-not-present fraud will cost retailers US$130 billion globally in digital sales
over the next five years. A Juniper Research study predicts that retailers’ slow pace in keeping up with
new fraud prevention requirements will allow cybercriminal practices to become more widespread as
more and more consumers shop online. It observes that established point-of-sale vendors will need to
move towards mobile POS technology in order to expand their reach into fresh markets and reduce their
exposure to card-not-present fraud.
An implication of the Juniper research is that a low understanding of FDP investment return is causing
the low uptake of the technology. the report anticipates digital payment players will be spending $9.6
billion annually on FDP solutions by 2023.
Altered appearance for healthy and beauty retail
Health and beauty retail has been undergoing a number of changes in recent times and will continue to
do so.
Many beauty bloggers and key opinion leaders (KOLs) were invited to the launch ceremony of the first
flagship store of Watsons, the leading health and beauty brand in Asia and Eastern Europe, held at
Bitexco Financial Tower in Ho Chi Minh City in mid-January. With its arrival, the landscape of Vietnam’s
modern health and beauty retail scene promises to become more vibrant. As retailers in the sector
continue to expand their footprint in the market and invest in improving their stores to attract shoppers,
the outlook for the channel is set to further accelerate.
Health & beauty specialist retailers, market size forecast
Modern retail model
Vietnam’s health and beauty retail market has been on the radars of many international brands in
recent years, eager to build their brands in one of Asia’s emerging health and beauty markets. “This
represents the clear evolution of the sector,” said Ms. Nguyen Phi Van, Chairwoman of Retail &
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VIETNAM BUSINESS REVIEW | RETAIL 10
Franchise Asia. “When the market has potential, it does attract more players, especially international
players. What we may see as significant movements in the sector in the future may include chain
retailers taking market share from independent players and international players will lead beauty
specialist retailers.”
Following in Guardian’s footsteps, she said, Watson is expected to differentiate itself by offering a wide
range of beauty and healthcare products in its stores, some of which could be the first in Vietnam.
Private label products will also be a focus, in order to create a loyal base of customers. It intends to bring
its full expertise to Vietnam in order to create a unique and exciting shopping experience through its
online and offline platform, said Mr. Rod Routley, Regional Managing Director in Asia of the A.S. Watson
Group. “As the flagship brand under the A.S. Watson Group, we are backed by a global supply network
that enables us to offer exciting new products from internationally-renowned brands, while our own
quality brand and exclusive products will also be available to Vietnamese consumers to provide a choice
of products to increasingly savvy customers in the country,” he said.
Watsons’ innovative concept store covers approximately 239 sq m on the ground floor of Bitexco Tower,
and it hopes to create a modern health and beauty shopping experience. Showcasing a wide range of
skincare and make-up brands, the store will have over 6,000 products on offer, complemented by its
online store featuring 8,000 products. The group currently operates over 7,200 stores across Asia and
Europe, and Vietnam is its 13th market.
It plans to open at least 50 outlets around Vietnam over the next five years and this latest foray reflects
the competitive landscape of the country’s health and beauty market, where modern retail chains such
as Medicare and Guardian have already secured strong footholds. In Vietnam since 2001, Medicare was
the first beauty, health, and well-being retailer in the country. It’s currently operating 85 stores and
expanding rapidly nationwide. It has a wide range of exclusive brands, and continuously updates
offerings that customers have never seen in Vietnam before, according to Mr. Bart Verheyen,
Commercial Director at Medicare Vietnam.
Meanwhile, Guardian is a well-known retail chain operating under the Dairy Farm Group, a leading pan-
Asian retailer. It has opened more than 74 stores in Hanoi and Ho Chi Minh City and the southern
provinces of Dong Nai and Vung Tau since its arrival in 2011.
Retailers have transformed the purchase of medicine and personal care products from stop-and-go to a
shopping trip, according to Mr. Aske Østergård, CEO of Decision Lab. “Chains like Medicare, Pharmacity,
Guardian, and now Watson provide eye-catching products on shelves and attractive promotions,” he
said. “Moreover, consumers are taken care of by professional customer services.”
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VIETNAM BUSINESS REVIEW | LOGISTICS 11
LOGISTICS
Vietnam featured in world’s top 10 emerging markets logistics
Vietnam ranked above Thailand to join the top 10 markets in Transport Intelligence’s 2019 Agility
Emerging Markets Logistics Index, which evaluates the overall competitiveness of 50 emerging markets
based on logistics strength.
China claimed the top spot of the index, followed by India and UAE, Indonesia, Malaysia, Saudi Arabia,
Mexico, Qatar, Turkey and Vietnam.
In Southeast Asia, Vietnam ranked third, behind Indonesia and Malaysia, and stood above Thailand at
11st and the Philippines 20th.
Vietnam’s international logistics market is the standout driver of its overall performance in the 2019
Index. Domestically, the country has solid but not remarkable logistics opportunities – both contract
logistics and domestic express markets are around US$750 million in value per year with healthy growth
rates, and GDP per capita is amongst the higher of the 50 emerging markets in the index, reinforcing
likely positive development.
On the international side, Vietnam has developed real strength. It rates as the fifth largest market for
logistics intensive goods trade by value – a measure where it is broadly in line with the significantly
larger Indian economy and double the size of much larger Brazil.
This advantage is expected to strengthen further as strong growth in both imports and exports is
expected over the next five years. The country’s sea freight market also plays a key role in strong
international logistics performance.
A network of more than 160 ports throughout the country – with main gateways at Ho Chi Minh City,
Hai Phong and Da Nang – have annual capacity of more than 11 million TEU, while the report estimated
that Vietnam’s sea freight market will grow at a 15.3% CAGR over the five years to 2022.
Additionally, Vietnam remained 4th overall in the international logistics opportunities sub-Index - where
average wages in the manufacturing sector are approximately four times lower than in China.
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VIETNAM BUSINESS REVIEW | LOGISTICS 12
More widely, Vietnam’s ability to negotiate and sign new bilateral (such as with the EU) and multilateral
(such as with ASEAN members) trade agreements has bolstered its ability to access new markets and
should see it continue to grow over the longer term too. To date, it has signed 17 FTAs, although not all
are implemented.
Meanwhile, a rank of 20th in the business fundamentals sub-index suggests room from improvement,
with the need to address regulatory burden in particular.
South Korea eyes deep sea port project in Haiphong
South Korea wants to invest in port projects in Vietnam, mostly in northern city of Haiphong’s Lach
Huyen port which accommodates container ships of up to 8,000TEU.
Lach Huyen International Gateway Port,
one of several key infrastructure projects,
aims to transform Vietnam into a strong
seafaring nation. It will enhance seaborne
transportation between Northern Vietnam
and neighboring countries, boosting
Vietnam’s international competitiveness.
Costing an investment of $1.2b, the project
receives Japanese official development
assistance (ODA) and a joint venture of
Japanese and Vietnamese companies.
This project represents one of the first public-private partnerships (PPP) between the governments of
Vietnam and Japan. The Japan International Cooperation Agency (JICA) is involved in the planning,
design, and construction of the project through technical and financial co-operation. Japanese
companies participated in the construction include JV comprising Nippon Koei, Japan Port Consultant,
Portcoast Consultant, and Nippon Koei Vietnam International.
Construction of the port began in April 2013, with the first two container berths scheduled to come
operational at the end of 2017. The two berths will serve six million tons of cargo a year.
The second phase of construction is scheduled for completion by 2020. It will increase the port’s
capacity to 30 million tons a year.
The port is being developed in two phases and will be equipped with comprehensive infrastructure and
handling technology. It will be able to accommodate container ships between 4,000TEU and 6,000TEU,
with the potential to accommodate 8,000TEU ships after expansion.
Upon completion, the port will enable direct exports from northern Vietnam to the US and European
markets, as well as eliminate transit through regional ports in Singapore or Hong Kong. This will reduce
shipping costs and increase competitiveness in the country’s shipping market.
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VIETNAM BUSINESS REVIEW | INVESTMENT 13
INVESTMENT
Chinese firm wants to invest in Vietnam expressway projects
China Pacific Construction Group (CPCG), the country’s largest private builder by revenue, has expressed
its interest in building expressways in Vietnam, including a project running across the country, local
media reported.
Yan Jiehe suggested that Vietnam’s north-south expressway project could be invested under either
engineering-procurement-construction (EPC) or build-transfer-operate (BTO) and CPCG is able to do
both.
At the working session, the Vietnamese deputy minister said that the north-south expressway project,
which was ratified by the country’s top legislative body, would be invested via transparent bidding
mechanism. CPCG, therefore, would be one bidder.
The north-south expressway project – eastern region with a length of 654 km will have three sections
invested by state budget and the remaining eight sections invested under the build-operate-transfer
(BOT) mode. The project got approval by the MOT in December 2017.
The entire project is estimated to cost more than VND100 trillion (US$4.35 billion).
Work on three sections will start in 2019 while the rest is expected to be kicked off in 2020 after the
bidding process gets underway.
Samsung Life seeks to acquire shares in Vietnam’s largest insurer
Samsung Life Insurance is seeking to make inroads into Viet Nam through an equity investment in Bao
Viet Life, the country’s largest life insurer, Koreatimes reports.
Bao Viet is Viet Nam’s largest life insurer with nearly 200,000 employees and life planners at its 75
branches across the country. The firm occupies an 18.9 per cent market share, followed by foreign
insurers Prudential and AIA.
Media reports have said Samsung Life is seeking to acquire about 20 per cent of Bao Viet Life, but an
official declined to comment on the terms of the deal.
The life insurer is fully owned by Bao Viet Holdings, in which the Vietnamese Government owns a 72 per
cent stake. Bao Viet Holdings is also a listed firm on the Ho Chi Minh Stock Exchange with a market
capitalisation of US$2.65 billion.
The holding company is yet to allow foreign firms to acquire shares of its life insurance unit to date, but
such a stance is expected to change soon as the Government pushes its plan to privatise some State-
owned companies.
Samsung Life’s move is in line with the Moon Jae-in administration’s drive to strengthen its presence in
the Southeast Asian region through its signature New Southern Policy.
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VIETNAM BUSINESS REVIEW | INVESTMENT 14
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