By Quoc Hung – Translated by Kim Khanh
By Quoc Hung – Translated by Kim Khanh
Addressing the event, Caitlin Wiesen, resident representative of the UNDP in Vietnam, revealed that the PAPI 2020 Report highlights the local Government’s significant achievements in terms of governance and public administration performance during the 2011-2016 and 2016-2021 terms.
The report which was released following the start of a new government, provides extensive data on citizens’ experience in interacting with various Government apparatus across all levels in 63 provinces and cities.
It indicates that the participation of citizens and anti-corruption efforts have a positive correlation with the containment efforts enforced to halt the spread of the novel coronavirus (COVID-19) pandemic.
Australian Ambassador to Vietnam Robyn Mudie also highlighted various improvements made in the PAPI report which have contributed to helping the country successfully halt the spread of the COVID-19 pandemic. The Australian diplomat added that through competent public governance, Vietnam will be capable of responding effectively to other unexpected emergency situations.
The report also shows various areas of concern for women, including poverty alleviation, health care, and education, adding that women are less frequently involved in decision-making processes in localities, and they often have a limited access to the internet and e-government services.
In addition, the report also highlights citizens’ assessment concerning the efficiency of governance and public administration performance by authorities across all levels.
Most notably, there have been major improvements made in terms of combating corruption activities and accountability towards citizens since 2016, it notes.
Nguyen Huu Dung, vice president of the Vietnam Fatherland Front (VFF) Central Committee, expressed his wish that the PAPI report will continue to provide necessary and reliable data regarding the efficiency of governance, state management, and public service delivery by all-level administrations, whilst contributing to policy reform.
This year saw more than 14,700 people interviewed for the PAPI 2020 Report, representing the largest number of respondents since the first such national survey was conducted back in 2011.
Since 2018, PAPI has been co-funded by the Department of Foreign Affairs and Trade (DFAT) of Australia, the Embassy of Ireland and United Nations Development Programme (UNDP) in Vietnam.
The report, which assessed citizen experiences with national and local government performance in governance, public administration, and public service delivery, showed that the Control of Corruption in the Public Sector dimension has improved significantly each year since 2016.
The dimension on Vertical Accountability Towards Citizens also steadily improved during the 2016-2021 term, mainly because an increasing number of citizens have contacted local officials, in particular village heads and People’s Council delegates.
Dimensions posting declines included Participation at Local Levels and Public Administrative Procedures.
“New features of the 2020 PAPI Report include insightful findings on the performance of local governments across two terms (2011-2016 and 2016-2021); experience of internal migrants with accessing services in receiving provinces; and voter perception of women in leadership roles,” UNDP Resident Representative in Vietnam Caitlin Wiesen said in her opening remark at the report launch.
“As the Government embarks on a new term, PAPI provides rich and deep datasets on citizens’ perception of local government achievement in each of the 63 provinces and important metrics to review and further improve their performance across eight key dimensions of governance,” she noted.
Analysis in the 2020 PAPI Report shows that citizen engagement and anti-corruption efforts have a positive correlation with Vietnam’s ability to respond to the COVID-19 pandemic.
Australian Ambassador to Vietnam Robyn Mudie, acknowledged an improvement in provincial governance and public administration performance, which may have contributed to Vietnam’s successful response to the COVID-19 pandemic.
Findings from the 2020 PAPI Report show that there is a correlation between good governance and effective pandemic responses, she added.
Nguyen Huu Dung, Vice President of the Central Committee of the Vietnam Fatherland Front said he hope that PAPI will continue to serve as a reliable policy monitoring tool that helps promote government accountability and reforms, thereby furthering modern governance.
Over 14,700 citizens were interviewed for the 2020 PAPI Report. This is the largest number of citizens to participate since the survey was first conducted nationwide in 2011. For the first time, the survey also gathered responses from citizens with temporary residence registration status. Nearly 300 migrants were surveyed in six centrally governed municipalities and provinces (Hanoi, Ho Chi Minh City, Bac Ninh, Da Nang, Dong Nai and Binh Duong).
|Digiworld aims to grow 25 per cent on average annually in the next decade|
Two months ago, Digiworld’s executive told securities firms that a partner producing and assembling Xiaomi tech products is opening a plant in Vietnam’s northern port city Haiphong, and that the plant would commence operation in the second half of this year.
Albeit the information was not yet confirmed by Digiworld’s leadership at the company’s recent annual general shareholders’ meeting on April 4, the company’s CEO Doan Hong Viet was quoted as saying, “This is informal information; Xiaomi and Digiworld will be making an official announcement on a suitable timing in the future.”
In fact, Digiworld is the exclusive distributor of all Xiaomi products in the Vietnamese market. According to Viet, home appliances would be one of hte key segments of Digiworld by 2024 with the target of holding a “remarkable market share”, in which TV sets would secure the largest share in value.
The home appliances market, with teh main items being TV sets, refrigerators, washing machines, ovens, and the like, has been totally untouched by Digiworld until the present. Viet explained that the overly high import duty of about 15 per cent was the reason why Digiworld had yet to engage in importing products for distribution and wholesale in the Vietnamese market.
|At the recent AGM, CEO Viet also lifted the curtain on Digiworld’s intention to venture into other product segments to realise the target of reaching a market cap in the billion-dollar range.|
“If there was a plant assembling Xiaomi products in Vietnam, the tariff barrier would disappear, providing the bedrock for us to break into this up-and-coming segment. This will be the answer for the question how Digiworld would attain an annual growth pace averaging 25 per cent in the upcoming decade,” said Viet.
On the sidelines of Digiworld’s annual general meeting (AGM), Viet said that the company will be making an official foray into the home appliance wholesale market late this year or early next year. Hence, this new segment will make no contributions to the company’s revenue and post-tax profit targets which have been set at VND15.2 trillion ($660.87 million) and VND300 billion ($13 million) for 2021.
“Digiworld is the exclusive distributor of Xiaomi and Huawei products in Vietnam. If we succeed in grabbing about 5-10 per cent market share of the TV market, which is now valued at about VND40 trillion ($1.74 billion), that would be remarkable. For the time being, we are distributing Xiaomi items in this segment,” said Viet.
The Chinese TV market is dominated by Xiaomi. In Vietnam, the TV market belongs to three top players – Samsung, Sony, and LG.
According to figures by the Ministry of Industry and Trade’s Domestic Market Department, the domestic home appliances market is valued at about $12.5-13 billion and the purchasing demand for household electronic items and kitchen devices will remain high at least to 2025.
At the recent AGM, CEO Viet also lifted the curtain on Digiworld’s intention to venture into other product segments to realise the target of reaching a market cap in the billion-dollar range.
Accordingly, mergers and acquisitions (M&A) deals through acquiring firms possessing distribution channels which Digiworld doesn’t have is the tactic helping the company to realise its 25 per cent annual growth target.
Digiworld was also reported to have been working with several consultancy firms and “targeting” several firms for M&A but has yet to reach the stage of “making an announcement”.
Last year, consumer goods fetched Digiworld VND265 billion ($11.5 million), only 2 per cent of the company’s total revenue, fulfilling only 53 per cent of the projection.
The solution for this disappointing performance is “giving priority to finding new products as well as engaging in M&A”.
Digiworld’s putting investment into pawnshop chain Vietmoney is an example. The company has been using Vietmoney’s outlets as a lever to stimulate business activities.
Accordingly, in September 2020, Vietmoney announced wrapping up its Series A funding round from Digiworld Venture and Finnish equity fund Probus Opportunities.
These two partners were reported to co-manage a 30 per cent stake in Vietmoney and have seats at Vietmoney’s Board of Management.
According to Digiworld’s report, the partners have put VND50.5 billion ($2.2 million) to possess a 21.86 per cent stake in Vietmoney.
“To grow into a billion-dollar company, we are seeking growth across the board, from consumer goods to supplementing new brands, customers, and sales channels. We are also constantly searching for new models towards realising the target of shaping a complete consumer ecosystem,” said Nguyen Hai Khoi, Digiworld’s investment director.
Khoi shares that Vietmoney is providing personal financial solutions that could effectively serve Digiworld’s consumer goods segment.
Statistics by fintech firm FiinGroup show that around 48 per cent of the Vietnamese population have low income of below $300 per month, a potential segment for consumer lending firms.
Vingroup’s billionaire Pham Nhat Vuong is taking an unexpected step entering the world’s largest electric car market.
Vingroup’s billionaire Pham Nhat Vuong
Bloomberg has cited a source as saying that Vingroup Group (VIC) of billionaire Pham Nhat Vuong is considering an initial public offering (IPO) in the US for its VinFast auto company, which is expected to mobilize about $2-3 billion.
VinFast expects a valuation of at least $50 billion or even up to $70-75 billion. With this valuation, the capitalization of VinFast will surpass the famous car maker Ferrari (capitalization at $52 billion), Honda ($51 billion), Ford ($49 billion), Kia ($30 billion) … and only behind some famous brands such as Tesla, Toyota, Volkswagen, Mercedes Benz, GM, BMW and others.
This is an unexpected move, but it is in line with his aim of conquering the top market in the world.
The information was released when Vuong’s VinFast company began receiving the first orders for electric cars in Vietnam last month and had models shown on CNN, paving its way into the US market.
VinFast has also registered two electric car models in the US and will sell a number of models in Vietnam, the US, Canada and Europe from late 2021.
In the trading session on April 12, Vingroup shares (VIC) – VinFast’s parent company – increased by 5.7% to VND132,000/share, helping the group’s capitalization reach more than $19 billion to be the largest capitalized enterprise in Vietnam’s stock market.
During the morning session of April 13, Vingroup shares continued to rise by more than 4 percent, to nearly VND138,000 per share.
As the price for VIC shares soared, Vuong’s assets rose to over $9 billion and he became the 262nd richest person in the world.
If the IPO is successful, VinFast will set a new record, surpassing the record of $1.4 billion in capital mobilization in 2018 of Vinhomes (Vingroup’s real estate management company).
At that time, VinFast was also the first Vietnamese company listed in the US.
VinFast is Vingroup’s company that manufactures motorbikes, and gasoline- and electric-powered cars. The business, only a few years old, began delivering gasoline fueled cars (using engines licensed by BMW) in 2019.
In the mobile phone segment, Vingroup has achieved many positive results, with the sale of Vsmart phones in the country increasing over the past year, even though the No. 1 private corporation in Vietnam just entered the smartphone market in 2018. Vingroup has become the 3rd largest smartphone manufacturer in Vietnam, behind only Samsung Electronics and Oppo.
On the website of the leading US carrier – AT&T – an image of the first Vingroup smartphones has appeared, a testament to the group’s plan to enter the American smartphone market.
Pham Nhat Vuong has great ambition in the field of technology and industry, with Vsmart phones, Vinfast cars and electric cars.
In recent years, Vuong’s Vingroup had to withdraw from many fields, selling the retail segment to billionaire Nguyen Dang Quang and recently presenting the Youth Football Training Center to Van Lang Education Group, even though it had many achievements in these fields.
HCM City (VNA) – Several of Vietnam’s key export sectors, such as textile-garment, leather-footwear, and electronics have become magnets for merger and acquisition (M&As) activities, posing a risk of leading enterprises in those sectors being purchased by foreign investors.
An advantage of Vietnam’s textile-garment industry is low labour costs, and it was also identified as one of six sectors on a list of supporting industry products prioritised for development.
The country has become the “footwear factory” of the world, while the domestic market boasts a population of more than 96 million.
Vietnam is also establishing itself as the world’s electronic manufacturing hub, with FDI continuing to flow into the sector over recent years.
Tran Phuong Lan, an official from the Vietnam Competition and Consumer Authority at the Ministry of Industry and Trade (MoIT), said that apart from existing development potential, opportunities created by bilateral and multilateral free trade agreements (FTAs) have also fuelled those industries’ development.
For example, she noted, under the EU-Vietnam FTA that took effect on August 1, 2020, 42.5 percent of import tariffs on textile-garment products were immediately eliminated, while those on leather-footwear items will be gradually cut to zero percent. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into force on December 30, 2018, abolished tariffs on Vietnam’s textile-garment products exported to other member countries.
A recent study of COVID-19’s impact on certain main industries in Vietnam noted that there have been signs of M&As surging in the textile-garment, footwear, and electronics sectors over the last three years.
In 2018, Japan’s Itochu Corporation spent 47 million USD on purchasing nearly 10 percent of shares in the Vietnam National Textile and Garment Group (Vinatex), raising its stake to almost 15 percent and becoming the second-largest shareholder, after MoIT.
Notable M&A deals last year included the one between the Taekwang MTC Vietnam Co. Ltd and the Jin Heoung Vina JSC in the leather-footwear industry, and the one between the Zenith Electronics LLC and Luxoft USA Inc. in the electronics industry.
Investors from the Republic of Korea, who have continually conducted large-scale M&A deals in Vietnam, also tend to select sectors with potential, like textile-garment, leather-footwear, and electronics.
Economic experts cited the experience of other countries as showing that to ensure effective M&A activities and protect the interests of all sides involved it is necessary to perfect related legal regulations, especially those on information transparency, and set up a regular consultative mechanism between the MoIT and the Ministry of Planning and Investment to develop an M&A database for key industries like textile-garment, leather-footwear, and electronics.
Vietnamese enterprises should proactively diversify technical solutions to keep information transparent, identify their targets in M&A deals, and analyse partners to avoid risks during negotiations.
In particular, experts noted, in M&As involving foreign firms, businesses should have a good grasp of market information and carefully assess foreign investors regardless of the deal’s value.
Nguyen Thi Tong, former Vice Chairwoman and former Secretary-General of the Vietnam Leather, Footwear and Handbag Association, recommended that as the leather-footwear and handbag sector is one of Vietnam’s five key export industries, businesses should make proactive moves to boost their capacity and cooperation via M&As within their sector, to secure sustainable development./.