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[Throwback] Economic Seminar "Doing business in Vietnam, what new challenges?"

As 2019 reaches its end, french-speaking economic experts and businessmen in Vietnam gather around the latest CCIFV’s seminar to discuss new challenges awaiting the entrepreneurial community in Vietnam in the coming year.

« 2020 won’t be much different from 2019 », according to an immediat forecast made by Hervé OCHSENBEIN, Economic Counsellor of the French Embassy in Vietnam. The IMF expected the country gross domestic product to expand by 6.5% and inflation rate to average 3.6% in 2020. 

The China – USA trade war which is casting a shadow on the regional economy will have slow, low and positive impacts on Vietnam. However, the country has to get prepared for three main challenges : 

  1. Demographic challenge that comes with the decline of the actual golden population era; 
  2. How to better link FDI and domestic businesses; 
  3. How to finance the country’s highly needed infrastructure projects while maintaining the control over the state budget.

To these three challenges, Thibaut GIROUX, the CCIFV’s Chairman added the fourth aspect : the human resource issue, or how companies keep their employees loyal in a competitive business environment. Mr. GIROUX also pointed out the digital transformation in Vietnam which he considered « is coming twice as fast as we think ». The country now ranks 5th in the region in terms of Internet and Social media penetration, and the digital brings market disruption in the service industry and drives online consumption, according to Xavier DEPOUILLY, Founder of Indochina Research. In line with this opinion, David NOMBER, Founder of Customore. Co, underlined the fact that nowadays, leading traditional brands in Vietnam have to think of E-commerce as a strategic growth lever instead of a small online channel. French companies in Vietnam like Metiseko also implement mid & long term digital business strategies to enhance visibility and build consumer trust. 

The E-commerce market in Vietnam which combined the concentration characteristic of Chinese E-commerce and the competitiveness of American E-commerce, is expected to be worth USD 33 billion by 2025. As consumers’ attention becomes rarer and rarer resource, advertising agencies and market researchers, like Performics or Customore.Co, are heading towards Artificial Intelligence and data-driven technologies in order to achieve customer-centricity and digital personalization at scale. 

Digital is widely considered as a cheap, effective and accessible way for small and medium enterprises to approach clients. However, in a fast-paced environment, it can be challenging for SMEs with small budget to determine the right digital tools. The solution : Test and Learn, fast. 

While the business environment is going through multiple changes, something remains intact: access to finance continues to be the main struggle for SMEs. At present, BNP Paribas has partnered with local bank like BIDV to provide services to SMEs. According to Nga NGUYEN, Senior relationship Manager of BNP Paribas Vietnam, the bank proposes a Supplier financing facility for multinational companies clients - credit clients of BNPP. This program would also bring benefits to SMEs: when a SME sells goods to a multinational buyer who is existing credit client of BNP Paribas, it will receive an invoice discounted by BNPP at an interest rate based on the credit worthiness of the multinational buyers.

This supplier financing facility will thereby help manage cash flow - the challenge all SMEs face. With his experiences in this matter, Van Dong LE, Deputy Director of Les Vergers du Mékong, advised SMEs to prioritize partnerships over profits, and reveled his company’s strategy : giving discounts to partners who pay early. 

How to grow a successful business in Vietnam? Be pragmatic and build your own equity, said Jean-Marc BRUTUS, Founder of Bellany and Administrator of the CCIFV. Challenges are opportunities in disguise and Vietnam continues to be, in 2020, the promised land of business development, as concluded by the Chairman of CCIFV Thibaut GIROUX.

 

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