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More and more Vietnamese fruits are exported to the world. From dragon fruit, rambutan, star apple, and lychee to mango, all have been available in many countries. Despite the impacts of the Covid-19 pandemic on the supply chain, Vietnamese fruit and vegetable products will maintain the export recovery momentum this year, especially fruits.

According to the Ministry of Agriculture and Rural Development (MARD), in the first quarter of this year, fruit and vegetable exports nearly touched US$950 million, up 6.1 percent over the same period last year. Last year, when the EU-Vietnam Free Trade Agreement (EVFTA) became effective from the beginning of August, in September, Ben Tre Province exported the first batch of fruits to Europe, including 20,000 fresh coconuts, 12 tons of green-skinned pomelos, and 3 tons of dragon fruits. In 2020, due to the Covid-19 pandemic, the export of fruits and vegetables decreased, but the value still reached $3.26 billion, showing the importance of this potential commodity.

Ms. Mai Thi Hong, Vietnam Coordinator of the Netherlands Vietnam Horti Business Platform, said that 15 types of Vietnamese fruits that are favored by the EU include dragon fruit, mango, pomelo, rambutan, mangosteen, jackfruit, durian, star apple, and coconut.

In the Mekong Delta, the area of fruit trees has continuously increased. In 2010, the area of fruit trees was 287,000 hectares. By 2020, it rose to 377,000 hectares. However, the long-standing shortcoming of fruits is that the processing stage remains weak.

Dr. Nguyen Quoc Toan, Director of the Agro Product Processing and Market Development Authority under the MARD, noted that the weakness of Vietnamese agricultural products is that the post-harvest loss is still high, depending on the sector but ranging from 10 percent to 25 percent, and the method of preservation is simple and outdated. Logistics remains weak, especially means of transport, storage, and cold storage. Meanwhile, there are a small number of deep-processed products.

The breakthrough from preservation and processing

Nearly 10 years ago, Mr. Pham Tien Hoai, General Director of Hanh Nguyen Logistics, acknowledged the strength of the fruit tree growing areas in the Mekong Delta and invested in many processing factories in Hau Giang Province.

According to Mr. Hoai, logistics costs in Vietnam’s agricultural product industry currently account for about 30 percent of product costs, while this figure in Thailand is only 12.5 percent, and the global average is 14 percent. The reason is that the distribution channel from fruit production to fruit export in the Mekong Delta has to go through several intermediaries.

Cau Duc Pineapple in Hau Giang Province is a well-known brand name. However, pineapples have to go through many stages. Farmers buy seeds and materials to grow pineapple plants in their fields. After harvesting, they must transport pineapples to fruit barns to sort and pack, then transport them to the processing factories. Here, they will continue to sort, wash, pack, and apply irradiation treatment on pineapples. After that, pineapples will be stored in warehouses or exported by sea or air; or exported to China through cross-border trade, Mr. Pham Tien Hoai cited.

This is the reason why fruits in the region fall into the situation of bumper crops, low prices at the peak of harvest. For a long time, fruits of the Mekong Delta have suffered double disadvantages because they have to go through many intermediaries, and it takes more time to transport them to Ho Chi Minh City for irradiation before exporting. However, the situation has been improving as many enterprises have invested deeply in the stage of processing and exporting fruits in the Mekong Delta.

For instance, the Hanh Nguyen Logistics Center located in Hau Giang Province was put into operation at the end of last year. This center has an automated warehouse with a capacity of 150,000 tons and 200 kiosks to facilitate 200 traders to open an agricultural product trading floor in the region.

Especially, the center also has an irradiator for fruits to have a “passport” for export to many countries. For a long time, for mangoes, after harvesting, within 3-4 days, farmers have to sell them urgently because they will rot. The pressure to close the deal is limited within 7-10 days.

With the appearance of Hanh Nguyen logistics center, Mr. Pham Tien Hoai hopes that the company will help farmers to select, wash, classify, pack, irradiate, and store mangoes in cool storage with the most appropriate temperature. Mangoes will have an extended shelf life of up to 90 days. During this period, farmers will have the right to negotiate prices fairly and transparently.

Mr. Le Minh Hoan, Minister of Agriculture and Rural Development, said that processing is one of the important stages in the value chain of the industry. Currently, we only have about 20-30 percent of agricultural products processed for export. Vietnam’s agricultural sector needs to pay attention to the processing stage. Processed products will solve the situation of oversupply, help to create added value, bring the development of agricultural products into the law of supply and demand.

Dam Nhan Duc, head of Research and Development of MB

The Fourth Industrial Revolution has brought about significant innovations in banking and finance activities. Consumers are spending more and more time on online platforms using their mobile phones and personal computers. This rate has further increased as the COVID-19 pandemic broke out. This has given banks more favourable conditions to develop digital products and modern banking applications in order to attract customers. In recent years, banking apps in Vietnam have been ceaselessly updated, constantly launching new features. This shows Vietnamese banks’ relentless efforts in fostering digital transformation.

Digitalisation is a must

In recent years, the government has isssued a large number of decisive resolutions to promote digital transformation, such as Resolution No.1/NQ-P dated January 1, 2020 regarding the pilot institutional framework (sandbox), Resolution No.50/NQ-CP dated April 17, 2020 issuing guiding policies to actively participate in the Fourth Industrial Revolution, and Decision No.316/QD-TTg on the pilot usage of telecommunication accounts to pay for goods and services of small value.

Digital banking is a journey, not a destination. It requires a comprehensive strategy for change in all aspects, from business thinking to organisational culture.

Cashless payment not only helps improve the management efficiency of state administration authorities but also saves time and costs for citizens. To do so, developing mobile money and digital banking is a must. The increasingly rapid growth of the pandemic and the superiority of technology are the driving forces for organisations to stimulate digital transformation.

Potential is enormous

Vietnam is in its “golden population structure” with nearly 70 per cent of the population of a working age, 92 per cent of whom use smartphones. Yet, the proportion of population having bank accounts and mobile money apps remains low, especially in remote areas. Currently, only about 30 per cent of the population has a bank account and just 3.5 per cent has mobile money apps. The scale of online payments in Vietnam is estimated to reach $8.7 billion in 2025, nearly four times the size of 2017. This effectively means the potential to develop banking services in Vietnam is enormous.

Pioneer banks

In recent years, with their determination to change, as well as policy orientation from regulatory bodies, especially the State Bank of Vietnam, many Vietnamese banks have proactively innovated, transformed, and upgraded their information infrastructure to be able to fulfill customers’ demand on digital channels. Digital products such as QR payment, savings, digital loans and recently, electronic know-your-customer (eKYC), have been actively implemented by many banks.

Pioneers include MBBank, TPBank, and VPBank. MBBank was the first in Vietnam to establish a digital banking division, rolling out a series of traditional banking services on the MBBank App such as online loans in three minutes, digital savings, international payment, and recently, customised bank account number and launching a programme to match account number with the phone number of customers.

It’s just the start

However, upgrading the technical infrastructure to digitise banking products is just the very first step in the digital transformation process. Based on the upgraded platforms of advanced technology, Vietnamese banks have been continuing to complete their digital ecosystem, which provides customers with the experience of diversified products and services, such as shopping, travelling, investment, or entertainment.

Pioneering banks such as MBBank or Techcombank are enthusiastically completing their digital ecosystems. In addition to conventional services like other banks, the MBBank App also allows users to shop, book airline tickets, play games, search for information, and receive financial management, securities, bonds, and insurance investment consultation online.

Digitalisation is not a destination

Digital banking is a journey, not a destination. It requires a comprehensive strategy for change in all aspects, from infrastructure to business thinking and organisational culture. This competition is not merely about technology but also concerns a change in the way of thinking and organisational culture at banks.

More specifically, the conventional “product-focused” business philosophy is facing many challenges, forcing banks to switch to a “customer-centric” approach and build a digital ecosystem that fufils customers’ need.

The process of digitising banking operations or building new ways of doing business in a digital environment requires considerably high levels of innovation and flexibility. This might also be a challenge for banks because banking is a risky business that prioritises prudence and compliance. Hence, banks need to come up with methods to nurture the creativity of their digital banking staff.

The core elements

Requirements for digital transformation and steps to foster digital banking have been widely discussed. Many banks have shown no hesitation to invest large amounts of money and hire consultants to build up their system; others have managed to deploy digital banking systems by themselves. But at the end of the day, perhaps it is digital management that is the core in addition to other fundamental factors including business model, foundation, connection, technology, algorithm, data, and analysis. If banks have not made use of data inside and outside the bank into their business decision making process or turn them to become unique offering or special experience of customers, it is still at a very first stage of digital banking process.