Retail apparel market

Well-known brand names such as UNIQLO have increased their presence in Vietnam in recent years. Photo: Le Toan

While most fashion brands in the world are shrinking as fashion followers have to stay away from shopping malls and stores during social restrictions caused by COVID-19, Fast Retailing Group, which owns UNIQLO, has already opened seven stores in Hanoi and Ho Chi Minh City since its first appearance at the end of 2019.

Osamu Ikezoe, general director of UNIQLO Vietnam said, “The opening of our chain’s stores in Vietnam is part of UNIQLO’s business expansion plan in Southeast Asia, based on market survey results, the economic growth rate, population size, and proportion of young people. We also have been preparing well to ensure that our new business in Vietnam runs as smooth as any other of our locations.”

Up to now, the production proportion of each UNIQLO factory around the world has remained secret, but according to Ikezoe, the company’s production is “mainly concentrated in China”, with only a small part being located in Vietnam, India, and some other countries. The general director of UNIQLO Vietnam also did not disclose the total investment in the Vietnamese market.

Changes in consumer preferences, such as from durable attire to fashionable pieces of self-expression, have pushed the fashion market in Vietnam to absorb many imported products. Foreign brands are almost not in direct competition as their directions are mostly different, focusing on diverse target groups.

However, Zara and H&M – the two brands with the earliest and most successful presence in the Vietnamese market – are still seen in some ways as rivals of UNIQLO. Spanish fashion brand Zara entered Vietnam in 2016 but has so far only sold products through its two stores in Hanoi and Ho Chi Minh City. Sweden’s H&M, which entered the Vietnamese market in 2017, has distributed products through eight stores in all major cities.

Only fashion brands with great financial potential can expand their business in Vietnam. At present, UNIQLO has a wide network of partners in Vietnam implementing its orders in the form of outsourcing.

This has also helped UNIQLO to gain advantages not only over other global competitors but also Vietnamese fashion brands. In particular, the rapid and early production in the domestic market of Vietnam allows the company to reduce costs and time, and bring in greater profits.

However, UNIQLO’s performance in Vietnam is not solely meant to provide goods to the local market but also fuel the brands’ expansion plans in other markets. At the beginning of the company’s presence in Vietnam, Tadashi Yanai, founder and president of Fast Retailing, told media that UNIQLO exports $3 billion worth of products from Vietnam annually.

“The quality of Vietnamese-made products is high, so they are accepted worldwide. Vietnam will have an increasing presence in the global market,” Yanai added.

Thus, the goal of expanding the UNIQLO brand in Vietnam is not only making an important contribution to the sales of Fast Retailing in East and Southeast Asia but also a step to realise the company’s ambition to catapult Fast Retailing towards the number one position in the global clothing industry.

Unequal race

The pandemic and market domination through foreign brands’ retail channels, which UNIQLO is deploying the most, are pushing some of the leading Vietnamese brands such as An Phuoc, Viet Tien, Nha Be, and Garment 10 further away, and a series of major brands such as Ninomaxx, N&M, Blue Exchange, Ha Gattini, and others had to narrow their presence and change their business approach.

Even Foci, a formerly successful brand with a chain of 60 stores across the country, has disappeared after it entered the market nearly 10 years ago.

COVID-19 has been forcing many local exporters to return to the domestic market, and focus on production and sales options through domestic channels to reduce inventory, but competing with imported high-quality products is not easy. Nguyen An, general director of Garmex Saigon, said that the volume of the domestic market only accounts for 10 per cent of the company’s production, though it has linked with domestic retailers to sell their goods.

Although entering the Vietnamese market and launching a retail system is a difficult endeavour and can take a long time, factors like successful pandemic prevention and a large population still motivated UNIQLO to try conquering the market.

However, Pham Xuan Hong, general director of Saigon 3 Garment JSC, described that the situation for local brands is challenging. “Increasing the market share from 10 to 30 per cent in the domestic market is very difficult for Vietnamese textile and garment brands,” he said.

Data from German data analyst and provider Statista shows that the size of the Vietnamese clothing market in 2019 was estimated at $5.6 billion with an expected growth rate of 8.8 per cent per year for the 2019-2023 period.

The Vietnam Textile and Apparel Association’s (VITAS) assessment of the country’s market potential also estimates the domestic fashion consumption at around $3.5-4 billion.

Fashion is inherently more than just a product keeping people covered and warm, and can also serve people’s needs of individuality, self-expression, and even spirituality.

VITAS’ chairman Vu Duc Giang is thus concerned about the market share of domestic brands amid the increasing presence of some of the world’s leading apparel retailers, such as UNIQLO and H&M, even if Vietnam is one of the top textile exporting countries in the world.

Reacting to change

Giang pointed out that the impact of many free trade agreements that Vietnam has signed in recent years is slowly showing. As import tax has decreased and the retail market opened for foreign investors and businesses, many global fashion brands such as Zara, H&M, Topshop, UNIQLO, and Old Navy have entered direct competition with Vietnamese brands, sometimes generating revenue of hundreds of millions of US dollars per year.

“Overall, the growth rate of the domestic textile and garment sector, especially that of larger corporations, is very low, sometimes even way below the set targets,” Giang said, adding that the pandemic has also made business more difficult.

As a result, the revenue of many domestic fashion brands is gradually decreasing, and marketing remains ineffective and cannot keep customers closely attached to the brands. Some companies that have reported better business results are still struggling to find new development directions, especially since their business plans have been constantly delayed by the global health crisis.

Giang said the pandemic has “changed consumer behaviour, and what they buy and how much they pay for clothing.” High-end shirts and suits have seen a lower consumption, with some businesses seeing their order reduce by 80 per cent, if there were any to begin with.

Many businesses have had to change their production and business strategies, shifting to medium and low-end products. This transition has cost businesses a lot of money for equipment, technology, and labour re-training.

The good news is that domestic textile enterprises, for many years, have continuously invested in and boosted production of new fashion lines to supply the domestic market.

Some of them have built their brands with increasingly high product quality, reasonable prices, and a more suitable approach that meets the needs of society, while at the same time developing a nationwide distribution system.

But the weakness of Vietnam’s textile and apparel sector remains the lack of diversification in market segments and pricing.

The cycle of launching new collections, fresh looks, running ads, sharing feedback, special discounts, and cooperation with other businesses to reach new heights has become a cumbersome marketing act. For some this means that they have become somewhat passive, with a lack of creativity. Giang believed that this makes local brands lose their identity amid a market with too much competition.

The negative effects of the health crisis may last for another year or two, according to Giang. “Despite successfully controlling the spread of the pandemic several times now, local purchasing power will most likely stall in 2021, and the market share of domestic brands may continue shrinking,” he said.

Thus, domestic fashion brands do not only have to compete with other local competitors and constantly reinvent their unique selling points but also have to pay attention to the rapid development of foreign fashion brands like UNIQLO which are taking advantage of the Vietnamese market’s potential.

As the competition is fiercer than ever, fashion businesses will likely need to implement new strategies and change development directions.

By Van Nguyen

Garment and textile businesses need to promote chain linkages

What challenges did the garment and textile sector experience in 2020?

Vietnam’s garment and textile sector experienced major challenges in 2020 due to the impact of the Covid-19 pandemic. Specifically, in the first quarter of 2020, the sector had to deal with interrupted raw material supplies, which widely affected business stability and employment. In addition, weak purchasing power, shuttered retail systems, supermarkets and stores, and late payments had a significant impact on stable production.

The garment and textile sector proposed solutions to overcome these difficulties. Businesses had focused on developing supply chain linkages, while paying more attention to the deployment of the garment and textile sector’s greening program for sustainable development. Thanks to greater efforts, the sector’s export turnover reached US$35.27 billion in 2020.

What solutions should the garment and textile sector implement in 2021?

The global garment and textile market will not return to the 2019 demand levels until the fourth quarter of 2023, so that 2021 will still be tough for the sector, depending on how the Covid-19 pandemic develops. We have come up with five solutions.

First, businesses must adapt to the new normal situation with the decline in global purchasing power.

Second, businesses must study market needs and changes in order to seek suitable solutions and measures and actively respond to the difficulties.

Third, supply chain linkages must be developed, especially with companies in regional countries and in nations that have signed free trade agreements with Vietnam. In my opinion, this is a vital issue for sustainable development.

Fourth, Vietnam’s garment and textile sector needs to devise a sustainable development strategy. In particular, business models must change to meet the needs of global brands and consumers. Vietnamese garment and textile businesses have to pay more attention to certificates of origin and product safety criteria.

Fifth, the application of scientific and technological achievements in the garment and textile sector plays an important role. Businesses should invest strongly in automated production lines, especially for spinning, weaving and dyeing.

What are your recommendations?

To ensure stable development for the garment and textile sector, the government and the Ministry of Industry and Trade should soon issue a development strategy for the 2030-2040 period, which should identify key areas and products for development. In addition, to be more active in the supply of raw materials, businesses need to design solutions to promote chain linkages. The Vietnam Textile and Apparel Association will strengthen information dissemination and create a foundation for businesses to promote their development. In particular, small- and medium-sized enterprises need to cooperate with large businesses to secure orders.

Mechanisms and policies for the sector must be open to ensure stable contributions to the economy and more jobs for workers. The garment and textile sector is targeting an export turnover of US$38-39 billion in 2021.

In November 2019, Prime Minister Nguyen Xuan Phuc set a target of at least 30 Vietnamese brands having major influence in the world market by 2030. To achieve the goal, it is necessary to plan strategic brands for financial investment and brand promotion.

Do Nga

Workers at Việt Tiến Garment Corporation (VGG). From 2010 to 2020, the total revenue of Vietnamese textile and garment enterprises has increased four times from VNĐ12.35 trillion to VNĐ54.14 trillion. — VNA/VNS Photo

HÀ NỘI — Textile and garment companies have made big strides in the industry for the past decade, but 2020 was a challenge.

Việt Tiến Garment Corporation (VGG) recorded a sharp decline in net profit by 65 per cent in 2020 ​​to VNĐ143 billion (US$6.2 million), the lowest profit rate in the last 10 years.

VGG attributed the decline to the negative impact of the COVID-19 pandemic around the world, especially in Japan, the US and the EU, the main export market of the corporation. Importers in these countries reduced their orders, leading to a decrease in VGG’s sales.

DamSan Joint Stock Company (ADS) reported net profit rising sharply to VNĐ23 billion, nearly three times higher than the previous year, thanks to the increase in the price of finished cotton fibre products and sales of fixed assets.

Thành Công Textile Garment Investment Trading Joint Stock Company (TCM) during the pandemic in 2020 invested heavily in masks, medical protective gear and developed antibacterial fabrics. Thus its net profit in 2020 increased by 28 per cent to VNĐ275 billion.

For the first year in 25 years, Việt Nam’s textile and garment export growth was negative 10.5 per cent, only reaching US$35.2 billion compared to $39 billion in 2019.

In the context of a decline in global demand by more than  22 per cent, from $740 billion to $600 billion, competing countries all witnessed an export decrease between 15-20 per cent, making Việt Nam’s reduction rate small.

From 2010 to 2020, the total revenue of Vietnamese textile and garment enterprises has increased four times from VNĐ12.35 trillion to VNĐ54.14 trillion.

Among large garment firms, the revenue of Việt Nam National Garment and Textile Group (Vinatex) increased from VNĐ489 billion to a five-digit number during the period 2014 – 2020 and peaked at VNĐ19.1 trillion in 2018.

The Việt Nam Textile and Apparel Association (VITAS) forecasts that export value in 2021 may recover to 2019 levels, reaching $39 billion, equivalent to a growth rate of 10.6 per cent year-on-year.

According to the Ministry of Industry and Trade, the textile and garment industry has great development opportunities from new free trade agreements, especially the potential to expand exports to major markets around the world. High-end brands will benefit greatly.

Notably, in 2021, many new features of the supply chain will be established such as the falling prices trend that dominates the whole market and the online business model which requires digital communication with all components of the supply chain.

Many businesses plan to invest in new projects in 2021 to improve production capacity. Vinatex will focus on supplementing, training and developing high-quality human resources, connecting chains in member enterprises and increasing the performance of subsidiaries.

Thành Công Textile Garment Investment Trading Joint Stock Company (TCM) plans to boost investment to expand its factories to serve export orders, while at the same time meeting the increasing orders for yarn and fabric for domestic textile enterprises to benefit from trade deals.

In terms of fashion items, the company plans to develop online instead of opening a retail chain to catch up with modern shopping trends. — VNS

Accountability sought in e-commerce, illustration photo

A draft decree amending 2013’s Decree No.52/2013/ND-CP on e-commerce, which will see comments collected from businesses and consultant firms, has recently caused concern for e-commerce operators if the draft is adopted.

Nguyen Chi Linh, representative of an e-commerce platform which is a subsidiary of the Chinese tech giant Alibaba Group, noted her criticisms to VIR about an adjusted article which orders a searching tool for state authorities to manage all information of their traders to check and inspect any violations or complaints.

“This regulation is unnecessary and can seriously impact the convenience of traders. Even if traders do not violate or make any complaints, they don’t want private information to be monitored by state management agencies. They could jump to other social platforms, and hamper e-commerce development,” said Linh.

She added that the platforms are assisting state management agencies in investigating illegal business acts, saying that providing registration information, transaction histories, and other documents on the issue on the e-commerce trading platform should be enough.

In addition, new regulations related to joint responsibility on goods and services on the platforms has caused headaches for e-commerce operators. The draft decree has added responsibilities in Article 36.11.d, and the representative of the Chinese e-commerce platform said this is impossible for them, which plays a commercial intermediary role only.

Without a legal framework, the role and responsibilities of e-commerce platforms continue to be highlighted. At the end of 2019, sneaker and sports apparel giant Nike ditched its deal with Amazon after two years, after noting its concerns about third-party sellers offering counterfeit products on the marketplace. Many brands are unhappy with how Amazon operates, with fake goods running rampant.

According to Bloomberg, the e-commerce giant is also notorious for identifying popular products sold by third parties on its website and then selling its own similar products at lower prices.

In Vietnam, e-commerce platforms like Shopee and Sendo are used to inspections for massive violations and complaints related to bad service or fake and prohibited goods.

Nguyen Minh Long, director of Dragon Law Company, said that e-commerce platforms should not shirk their duty to provide a management tool for state authorities, and take the joint responsibilities to improve themselves.

“In order to enhance the efficiency of these regulations, we need some sanctions strong enough to ensure owners of e-commerce platforms improve accountability and compliance, ensure good performance of online trading, and protect local consumers,” said Long.

He agreed with new provisions, saying, “In the context that online trading is increasingly developing, especially during the pandemic, strengthening the state management for the sustainable development of the retail market is necessary to maintain both benefit of businesses and consumer protection, and avoid e-commerce platforms developing as a place for trading illegal goods,” explained Long.

The draft decree amending 2013’s Decree No.52/2013/ND-CP on e-commerce is being compiled by the Ministry of Industry and Trade. The draft adds provisions on managing e-commerce activities involving foreign factors, and those on social networks. It also revises several regulations on the responsibility of both e-commerce platforms and their operators.

Some popular e-commerce platforms in Vietnam are backed by Chinese technology giants, or funded by regional venture funds. However, results often fail to match investment, and competitiveness increasing. In 2020, Lazada.vn fell behind Shopee and Tiki, according to Malaysian shopping aggregator iPrice Group, with a sharp month-by-month drop of its traffic, while that of the leading player Shopee has tripled Lazada and Tiki.

By Huong Nguyen

Vietnam’s sea ports have berthed some 4,900 foreign vessels over the last two months, a decline of 6 percent year-on-year, according to the Vietnam Marine Administration.

The fall was due largely to the impact of COVID-19, which is resulting in major fluctuations in the transport sector, a representative of the administration said.

Despite the lower number of foreign ships, the volume of import and export goods through ports grew. In January and February, 35.3 million tonnes of imports and 26 million tonnes of exports were handled at ports nationwide. The former represented an annual increase of 14 percent while the latter was as same as that last year.

In particular, nearly 1.3 million TEUs for exports and 1.2 million for imports were handled during the period, up 32 and 16 percent, respectively, year-on-year; the highest growth since the pandemic began.

Meanwhile, the arrival of domestic vessels totalled 5,300, up 11 percent year-on-year./.

Quang Ninh’s Van Don airport reopens on March 3

The Ministry of Transport has decided to allow Van Don International Airport in the northern province of Quang Ninh reopen from 6:01am on March 3 after the COVID-19 pandemic has been put under control in the locality and the airport is safe to transport passengers.

The airport was temporarily shut down from January 29 after an airport security staff was confirmed positive for the coronavirus SARS-CoV-2 that causes the COVID-19 pandemic.

The national flag carrier Vietnam Airlines announced earlier that it will resume flights between Ho Chi Minh City and Quang Ninh on March 3, thus becoming the first to restart flights to the Van Don airport since the local COVID-19 outbreak began.

From March 3 to 17, one weekly flight will ply the route between the two destinations, on Wednesdays. Flight numbers will be increased to three a week, on Wednesdays, Fridays, and Sundays, from March 18 until the end of the year.

Flights will take off at 1:00pm from HCM City and 3:45pm from Van Don.

Passengers on the first three flights after resumption will enjoy a discounted fair of 507,000 VND (22 USD), including taxes and fees, per leg./.

Webinar on Vietnamese market held in Switzerland

The Vietnamese Embassy in Switzerland, in collaboration with the Geneva Chamber of Commerce, Industry and Services and the Switzerland-Vietnam Business Group (SVBG), organized the Webinar Market Focus Vietnam on March 2.

This was also a chance for the newly-established SVBG to introduce itself to Swiss partners.

The webinar aimed at boosting trade and investment cooperation between Swiss and Vietnamese businesses.

Speaking at the event, Ambassador Le Linh Lan stressed that Vietnam and Switzerland have maintained good friendship and cooperation for half a century.

This year, the two are celebrating the 50th anniversary of their diplomatic ties.

Switzerland is the 6th largest European investor in Vietnam, with its investment totaling 2 billion USD, mostly in manufacturing – processing and electricity. Currently, around 100 Swiss firms are operating in Vietnam.

Meanwhile, Vietnam is the four biggest trade partner of Switzerland in ASEAN, with bilateral trade exceeding 3.6 billion USD in 2019. Since 2012, Vietnam and the European Free Trade Association (EFTA) – the intergovernmental organisation of Iceland, Liechtenstein, Norway and Switzerland – began negotiations for an FTA, which is expected to be signed this year./.

Vietnam, Austria shape up economic-trade cooperation

Vietnam and Austria discussed measures to promote economic-trade collaboration during a recent working session between Vietnamese Ambassador to Austria Le Dung and Austrian Deputy Minister for Digital and Economic Affairs Michael Esterl.

The Vietnamese diplomat thanked Michael Esterl and his ministry for boosting cooperation between the two sides, affirming the Memorandum of Understanding on Industry 4.0 cooperation clinched between the Vietnamese Ministry of Industry and Trade and the Austrian ministry provides a sound basis for both sides to carry out collaboration activities in the coming time.

Michael Esterl, for his part, laid stress on the significance of the regular policy and legal consultation between the Vietnamese Embassy and the Austrian ministry as it creates opportunities for both sides to exchange trade and investment policies and regulations as well as market information in each nation.

He suggested both sides maintain this mechanism in the forms that suit COVID-19 situation such as holding virtual conference.

The Vietnam-Austria business conference could be organised to update information and pen measures to support enterprises of both sides so that they can seek cooperation opportunities and expand investment in each country, he added.”

Touching on cooperation in the time to come, he said Austria is pushing procedures to ratify the EU-Vietnam Investment Protection Agreement (EVIPA).

Dung thanked Austria’s support, stressing Austrian businesses have many opportunities to land investment in Vietnam.

With a population of 97 million, Vietnam is a potential market for Austrian firms to expand their business operation, while it serves as a gateway for Austrian products and services to get access to the 670 million-strong ASEAN market.

Additionally, being a favourite destination for foreign investors in the “China, Plus One” strategy, Vietnam will have preferential policies to attract foreign investment, he said, holding when the EVIPA takes effect, Austrian companies will gain great competitive edges if they invest in Vietnam.

At the event, both sides reaffirmed they want to cooperate with each other in the fields of vocational training and labour. Austria said the country has huge demand for skilled workers in information technology (IT) and nursing in the future.

They also reached consensus on urging competent authorities to kick off a pilot project to carry out Austria’s vocational training model in Vietnam.

Dung took the occasion to invite Michael Esterl to visit Vietnam in a suitable time when the COVID-19 pandemic is put under control./.

Making greater efforts towards a year of economic growth

The Ministry of Planning and Investment has made a draft report on additional evaluation of the implementation of the socio-economic development plan in 2020 to collect comments from ministries, sectors and localities. The report’s latest data update shows that the implementation of many targets is better than the estimate reported to the National Assembly.

The highlight of 2020 was that Vietnam achieved and exceeded 10 out of the 12 main targets assigned by the National Assembly, up two targets compared to the estimate, including the targets on the growth rate of total export revenue and on the unemployment rate in urban areas.

This is an encouraging economic result amid the “COVID-19 period” because the pandemic caused dramatic declines on consumption worldwide, pushing production and export activities to stagnation and raising unemployment rate.

In addition, the implementation of four other goals has better performance than the estimates reported to the National Assembly, including the growth rate of gross domestic product (GDP), the average growth rate of consumer price index (CPI), trade surplus, and the percentage of population participating in health insurance.

Basically, the growth quality of the economy has been improved with less dependence on natural resource exploitation, raw exports, and cheap labour while gradually shifting to rely on application of science, technology and innovation, and the processing and manufacturing industry.

It can be said that Vietnam’s economy had a year of brave growth in both quantity and quality, which were not only kept stable but also growing.

This result has added a highlight to the economic picture of Vietnam in such a difficult year while reinforcing the confidence of the whole society in the Government’s policy and governance in the context unpredictable developments of the COVID-19 pandemic.

However, with GDP growth rate of 2.91% in 2020, Vietnam’s economy had the lowest growth year in the past ten years and failed to meet the target set for the 2016 – 2020 period.

This is a big challenge in the starting year of the implementation of the 5-year socio-economic development plan in the 2021 – 2025 period and the ten-year strategy in the 2021 – 2030 period.

To continue with another year of brave growth, right from the beginning of 2021, the entire political system has made every effort to drastically restrain the third wave of the COVID-19 pandemic while continuing to promote production and business activities towards the annual growth target of 6.5%.

At the beginning of the year, the Ministry of Finance asked the Government to develop a decree to extend the deadlines for tax payment and land rent for enterprises in the context of prolonged COVID-19 epidemic with an estimated value of about VND115 trillion.

Amid the increasingly unpredictable global political and economic situations and difficulties in making forecasts due to the impact of the pandemic, more than ever, “rewards” will be given to the economies which early and flexibly take response activities.

Travelling to nearby, safe destinations: the main tourism trend in Vietnam in 2021

In 2021, domestic tourism is still the development focus of the sector; meanwhile, famous seas and islands and tourist cities continue to be leading destinations and are predicted to continue to be popular destinations for Vietnamese tourists.

Before COVID-19, exploring a crowded city, strolling through bustling markets, enjoying dinner at a bistro brimming with locals, or touring major attractions were Vietnamese tourists’ favourite activities. However, as the epidemic has still been fully resolved, tourists are now giving their top priority to their safety in the new situation.

Therefore, socially distant travel is expected to be the trend once again in 2021. Travelers will select sparsely populated areas nearby so that they can set plans and tours that align with their travel demands and ensure protection from the pandemic.

Vietnamese tourists often spend 2-3 days, especially weekends or short holidays, travelling to domestic destinations. This year once again, they will choose destinations that are easy to move and near their cities they live.

Coastal and island destinations are still the Vietnamese tourists’ favourite, with Vung Tau and Nha Trang emerging as popular destinations for domestic tourists. In addition, other famous tourist sites such as Ha Long, Sapa, Phu Quoc and Da Lat will attract a large number of visitors.

If socially distant travel is how independent travelers will adapt to the new situation, small group travel is the choice for people who want to travel as a group and adapt to the current situation.

Different from regular trips in 2019 that could accommodate 20 – 30 visitors, sizes have shrunk down to control the spread of infectious diseases.

According to Outbox Consulting, the COVID-19 pandemic will make wellness travel an emerging trend this year. Wellness travel is not a new trend in the tourism industry; however, during the pandemic, fatigue and stress have become familiar to almost everyone. So, after the pandemic is controlled, visitors will find wellness retreats useful after a long period of repressed travel demand.

Vietnam was considered an emerging destination in the wellness travel trend in the Asian Pacific region in 2019. This, combined with an increase in visitors’ demands for wellness travel trends in 2021 will present an opportunity for Vietnam’s wellness tourism market, especially as Vietnam is emerging as a safe destination in terms of controlling the pandemic.

Another feature that has emerged during the outbreak of COVID-19 pandemic is that visitors tend to book accommodation at the last minute because they they perceive it may be harder to cancel and get a refund for hotel bookings as opposed to flight tickets.

Pre-COVID, Vietnamese travelers often planned their trip and booked services long before their departure, especially when it came to overseas tours, in order to save money. However, in the face of the complicated developments of COVID-19, shorter booking timeframes will help mitigate the risk of travel policy changes and mobility restrictions.

The use of technology in tourism has long been popular across the world and in Vietnam in recent years. The COVID-19 pandemic sped up this digital transformation in 2020.

This year, technology will be a leading factor helping visitors regain their confidence. A survey conducted by Censuswide tshowed more than 4 out of 5 travelers said that technology would increase their confidence to travel in the next 12 months. They noted that a mobile app that provides warnings and updates during trips, for example local outbreaks or the government’s latest guidelines, will be essential this year.

In addition, contactless payments (for example, Apple, Google Pay, PayPal, and Venmo) will help tourists travel more confidently within next 12 months. In 2021, safety will be of paramount importance, and simple technological solutions will be the driving force for travelers to explore the world more confidently. Vietnamese tourists are part of the general global technological .

Commenting on the roadmap for the recovery of Vietnam’s tourism, the Outbox Consulting report said it will depend on foreign countries’ ability to control the epidemic. Beside vaccines, the speed of tourism’s recovery depends partly on factors that boost destinations reopening timeframes.

China represents largest import market of Vietnam over two-month period

China made up the nation’s largest import market during the first two months of the year with an estimated turnover of US$17.3 billion, representing a year-on-year increase of 85.7%, according to data recently released by the General Statistics Office of Vietnam (GSO).

Throughout the reviewed period, import turnover stood at an estimated US$47.26 billion, an increase of 25.9% over last year’s corresponding period, of which the domestic economic sector reached US$15.62 billion, a boost of 16%, with the foreign-invested sector rising to US$31.64 billion, a surge of 31.4%.

Most notably, there were 11 commodities in total which recorded an import turnover of over U$1 billion, accounting for 67.6% of the country’s total import turnover, while nine items had an export turnover of over US$1 billion, making up 73.8% of the overall export turnover.

With regards to export markets, the US was the largest Vietnamese export market during the two-month period with a turnover of US$14.2 billion, posting a rise of 38.2% on-year.

Businesses urged to change mindset to overcome COVID-19 challenges

Amid complicated developments by the COVID-19 pandemic, local textile and apparel firms have been forced to change their business mindset, boost connectivity, expand into new markets, and maximise the benefits from free trade agreements (FTAs) to meet this year’s export target of US$39 billion, according to insiders.

Despite challenges caused by COVID-19, Vietnam raked in approximately US$2.6 billion from garment and textile exports  in January, representing a year-on-year increase of 3.3%, with some products recording high growth rates of between 9.3% and 35.6%.

Nguyen Xuan Duong, chairman of the Board of Directors of Hung Yen Garment Corporation (Hugaco), said that domestic textile businesses are anticipated to encounter numerous difficulties moving forward due to a shortage of export orders and cash flow, thereby making it tough to maintain production activities whilst ensuring the jobs of workers.

Le Tien Truong, chairman of the Vietnam National Textile and Garment Group (Vinatex), said that outsourcing costs will decrease significantly due to the trend of simple goods being replaced by fashion products this year, adding that firms should be flexible in altering their business strategies in order to adapt to market fluctuations and seize upon new opportunities.

Than Duc Viet, general director of Garment Corporation 10, revealed that the cancellation of export orders due to the COVID-19 pandemic has made the company draw up a number of fresh strategies aimed at increasing its competitive advantages.

In line with this, the business has turned to export fabric and medical masks, protective suits, knitwear, as well as small orders that have a high value and short production period.

Viet stated that the group will focus on surveying the market, whilst selecting suitable export products, enhancing workers’ skills, and increasing labour productivity in an effort to boost exports in the near future.

Tran Nhu Tung, vice chairman of the Board of Directors of Thanh Cong Textile Garment Investment Trading JSC, said the company has received a sufficient amount of orders until the end of the first quarter, with the prospect of new orders ahead during the year’s second quarter.

Tung also revealed that the company has initiated plans to begin construction of another factory in Hoa Phu Industrial Park in the southern province of Vinh Long with an estimated capacity of 12 million products annually, with estimated revenue from the EU market set to see a double-digit increase.

With a complete production procedure from yarn, weaving, dyeing, and sewing, the group is anticipated to enjoy preferential tariffs in line with the EU-Vietnam Free Trade Agreement (EVFTA) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) regulations.

Land brokers rush to Binh Phuoc although airport project still being mooted

Although an airport project has only been proposed in Hon Quan District of Binh Phuoc Province and is still being considered by the competent agencies, a large number of land brokers have rushed to the district and inflated the prices of land lots in surrounding areas.

Over the last week, land brokers from HCMC, Hanoi and the neighboring localities of Binh Phuoc flocked to Hon Quan. Besides posting advertisements on social networks, they also took land buyers to visit the site proposed for the development of the airport, the local media reported.

They have advertised land lots measuring some 1,000 square meters each and put up them for sale at VND700-900 million each. They have also said that only a small number of people could buy the land.

According to the Hon Quan District government, the land price inflation and large gatherings of people are abnormal, posing a high risk of social disorder and Covid-19 infection.

The land price inflation may encourage local residents, especially the ethnic minority people, to sell agricultural land. Therefore, the competent agencies have been educating residents so that they are not tricked by land brokers who spread false information.

Due to the complicated situation, on February 26, the government of Hon Quan District asked the police and military forces to support communes in the district to handle large gatherings and those without face masks to prevent the Covid-19 infection, especially in the surrounding areas of the proposed airport site.

The authorities of communes and towns, especially Tan Loi and An Khuong communes, were asked to enhance the construction and land use management to promptly prevent illegal projects, the improper use of land and land violations and impose sanctions on violators.

The Binh Phuoc government had earlier proposed the Government and the Ministries of National Defense and Transport allow the province to manage the existing 100-hectare airport in the province to develop it into an airport that can be used for both civil and military purposes with an area of 400-500 hectares. The land for the airport expansion is public land and the expansion project was proposed to be executed under the public-private-partnership format.

Over 33,600 firms dissolve, suspend operations in Jan-Feb

The country saw over 33,600 firms leave the market or suspend their operations in the first two months of the year, up 18.6% year-on-year, according to the Ministry of Planning and Investment.

Of the total, over 21,630 companies signed up to temporarily suspend operations, some 8,380 halted operations to complete dissolution procedures and over 3,590 were dissolved.

The number of newly-established firms in February dropped by 12.3% year-on-year at 8,040, while pledged capital surged by 85.6% at VND179.7 trillion. Besides, some 7,700 firms left the market in February, VietnamPlus news site reported.

Between January and February, some 18,130 companies were established, inching down 4% year-on-year, while the number of firms returning to the market, mainly active in the art, entertainment and education fields, and lodging and catering services, during the two-month period was 11,030, down 7.6% against the same period last year. However, the total registered capital increased by 12% to VND720.4 trillion.

TGE to invest in wind power project in Mekong Delta

Gia Lai Electricity JSC (GEC) has passed a plan to invest in the Tan Phu Dong 2 wind power project in Tan Thanh Commune, Go Cong Dong District, Tien Giang Province.

The subsidiary of Thanh Thanh Cong Group authorized Tien Giang Wind Power JSC (TGE) to implement the 50-MW plant project, reported Bnews news site.

TGE will set up the project’s management board to monitor and execute the project. Further, it is in charge of building a power transmission line for the project; seeking, negotiating and selecting appropriate consulting firms, equipment suppliers and construction units in line with prevailing regulations and ensuring the project proves financially effective.

Besides this, GEC authorized its general director to decide, sign and implement essential procedures to ensure the project will be put into commercial operation as scheduled in the approved plan.

Earlier, GEC had passed a plan to contribute nearly VND10 billion worth of capital to TGE.

Manufacturing output returns to growth in February

The health of the sector has now strengthened in three successive months.

The Vietnam Manufacturing Purchasing Managers’ Index (PMI) ticked up to 51.6 in February from 51.3 in January, signaling a modest improvement in business conditions, according to Nikkei and IHS Markit.

The health of the sector has now strengthened in three successive months. A reading below the 50 neutral mark indicates no change from the previous month, while a reading below 50 indicates contractions and above 50 points to an expansion.

Sustained growth of new orders was recorded, helping to drive the improvement in overall business conditions. New work has now increased in six successive months. Total new orders were supported by a return to growth of new export business amid some signs of improving international demand.

Rising new orders was the main factor behind a return to growth of manufacturing production. The slight increase was also partly attributed to efforts to build stocks of finished goods. These efforts were successful in bringing an end to a four-month sequence of falling post-production inventories.

Employment increased for the second time in three months as firms responded to rises in demand and production requirements. This enhanced capacity meant that firms were able to keep on top of workloads and reduced outstanding business again.

A renewed expansion of buying activity was also recorded, but stocks of purchases continued to fall amid the use of inputs to support production.

Problems securing raw materials also contributed to falling stocks of purchases. Suppliers’ delivery times lengthened sharply again. Difficulties sourcing goods from abroad due to a lack of shipping containers and global demand for materials outpacing supply continued to cause longer lead times.

These imbalances led to a further sharp increase in input costs in February. Although the rate of inflation eased to a three-month low, the rise in input prices was still faster than the average seen across the ten-year survey so far.

Manufacturers responded to higher input costs by raising their own selling prices accordingly. That said, the rate of inflation was modest and the slowest since last November.

Business confidence continued to wane in February, dropping for the third month running to the lowest since August 2020. Sentiment was hit by concerns over the ongoing impact of the Covid-19 pandemic. That said, firms remained optimistic on balance, with hopes that the pandemic will be brought under control over the coming year supporting confidence.

“Renewed increases in output, employment and purchasing activity are all welcome signs, but a recent increase in Covid-19 cases sounds a note of caution. In fact, confidence among firms slumped to the lowest since August 2020, the last time a significant outbreak of the pandemic was seen,” said Andrew Harker, associate director at IHS Markit, which compiles the survey.

“Previously, Vietnam has proved successful in quickly suppressing the virus, and should this be the case again we will hopefully see the manufacturing sector remain in growth territory. IHS Markit currently forecasts a rise in industrial production of 6.8% this year.”

What makes Phu Quoc’s real estate attractive to investors?

Population in Phu Quoc likely triples in 2030, resulting high demand for hospitality industry.

The administration upgrading has made Phu Quoc the first island city in Vietnam, opening up an era for the locality equal in size to Singapore.

The move is considered a momentum for the island that is well-known for tourism, creating favorable conditions for the mushrooming of real estate projects, local experts have predicted.

It triggers a question on how Phu Quoc’s real estate attractive to investors. The expertise might offer a broader view of the potential there.

Dang Phuong Hang, managing director, CBRE Vietnam, said that real estate ecosystem models like hospitality will match the tourism-based island.

The development of tourism will support the growth of three-pillar model namely hospitality real estate, entertainment, and high-end housing segment, she added.

Phu Quoc’s real estate sector has significant room to grow thanks to youngling market, plenty of investment opportunities, and reasonable prices. In addition, well-equipped resort projects are expected to drive up the service prices.

Enormous potential for real estate market is obviously seen in newly-established wards like Duong Dong and An Thoi, Hang said.

“The city status will enable Phu Quoc to make master growth planning, including strategies for tourism industry. The city’s population is forecast to triple by 2030, forming elite groups that demand high-end services,” Hang said.

Nguyen Van Dinh, deputy general secretary of the Vietnam Real Estate Association (VNREA), said the three-pillar ecosystem [hospitality real estate/resort – entertainment – high-end housing segment] is the most suitable model for the island tourism city of Phu Quoc.

Notably, the well-invested infrastructure and more convenient transport have fueled the increasing flows of tourists to the island. So far, visitors go to Phu Quoc by high-speed craft with 150-300 passengers on board each and by airplane with 15-20 flights from various part of the country per day.

According to Dr Nguyen Tri Hieu, meanwhile, the upgrading to city has enabled Phu Quoc to have more budget for infrastructure and more open policies.

The local People’s Council has approved a public investment plan worth VND17 trillion (US$739 million) for 2021-25, including infrastructure, key projects, and resettlement models.

In 2020, as many as 20 out of 23 investment projects in Kien Giang Province were committed to going to Phu Quoc. The island welcomed nearly three million visitors in the same year despite Covid-19, up 60% on-year.

Relaxed policies and nature-favored living conditions help support investors’ expansion plans. The city is likely to attract additional 18,000 people by 2030, including high-skilled workers, foreign experts, and overseas Vietnamese.

The figure might be higher thanks to visa exemption scheme (up to 30 days) from July 2020 to foreigners and a stay of up to 10 years for foreign investors having at least VND100 billion (US$4.4 million).

Outlook

Nguyen Manh Ha, deputy head of VNREA, believed that real estate prices in Phu Quoc will set up a new level in a short time, unlike Nha Trang and Danang before. It will take several years to record VND500-600 million (US$21,739-US$26,000) per square meter in some places in Phu Quoc like the rate in Nha Trang currently.

However, it requires a well-prepared planning for the island city, Ha noted.

The island’s southern region is of high expectations with more investment flows in the next five years, local experts predicted.

Islands in southern Phu Quoc, if given well-designed planning, are expected to be destination of wealth-off people in the coming years, according to Dr Le Xuan Nghia, former deputy chairman of the National Financial Supervision Committee.

There remains much to say about procedures and investors need to pay more attention to legality of projects and segments they are investing in, local experts have warned, adding that Phu Quoc’s real estate must be viewed in long-term strategies with possible focus on cleared land and resort projects.

Vietnam named in Agility’s top 10 Emerging Markets Logistics Index 2021

Vietnam’s rise of three ranking positions to 8th overall is the fastest rise in the top half of the Index and displaces regional partner Thailand in the top 10.

Vietnam moved up three places to 8th in the top 10 countries of the Emerging Markets Logistics Index 2021 by Agility, one of the world’s top freight forwarding and contract logistics providers.

Among countries in ASEAN, Vietnam stood at third behind Indonesia (3rd overall) and Malaysia (5th), and was above the likes of Thailand (11th), the Philippines (21st) and Cambodia (41st).

According to Agility, Vietnam’s handling of the Covid-19 pandemic has been one of the most successful globally, with data from Johns Hopkins University showing less than 1,500 reports of Covid-19 cases in the country in 2020.

The combination of social and economic restrictions with a strict and comprehensive testing and tracing system, saw lockdowns last less than three months, and by June many factories were reopened and domestic operations were recovering quickly, it said.

“The steps taken by Vietnam in 2020 propel it into the top 10 ranking in 2021 – its rise of three ranking positions to 8th overall is the fastest rise in the top half of the Index and displaces regional partner Thailand in the top 10,” stated the logistics firm.

“The country’s economy has performed well as a result of the minimal domestic disruptions and is set to be one of the best performing globally in 2020,” noted the report.

The foundation provided by the strong performance in 2020 is expected to underpin a 2021 expansion of 6.5% as domestic and international conditions normalize and the Covid-19 pandemic recedes.

In recent years, Vietnam has added significant hightech manufacturing capacity, helping attract investment from producers higher up the value chain as costs in China increased.

The option to avoid additional costs associated with the US-China trade war has added further motivation for manufacturers to choose Vietnam, noted Agility.

Samsung, which alone contributes a quarter of Vietnam’s exports through smartphone manufacturing activity in the country, will shift PC manufacturing to Vietnam after it shut down a Chinese factory in 2020. Apple is also reported to have requested that Foxconn open a Vietnam production location to add production capacity for iPads and MacBooks.

When the production lines become active in the first half of 2021, it will be the first time iPad manufacture to take place outside China. Meanwhile, chip manufacturer Intel will operate its largest assembly plant in the country and South Korea’s LG electronics announced investment plans during 2020.

With Covid-19 further exposing the risks of over-reliance on China, Vietnam will be an attractive option for relocation – indeed, when asked, 19.2% of survey respondents cited Vietnam as the number one location for those seeking to diversify production locations outside of China.

However, so rapid has the investment and arrival of new businesses been that it is creating challenges of its own, including a shortage of skills and knowledge to produce the highest value goods.

Navigos Group, which owns the country’s largest jobs site, reports that 71% of employers cite a lack of IT skills as their most significant challenge.

By 2025, the country set the contribution rate target for logistics to be at 5-6% of GDP, services growth rate between 15-20%, while the rate for logistics outsourcing to be 50-60%, said the government’s decision No.200 referring to an action plan to enhance the competitiveness and development of Vietnam’s logistics sector through 2025 and ensure its ran in the Logistics Performance Index of at least 50th.

Giants to invest in big projects in Hue

Aeon, a Japanese-based retailer, and Vietravel, a local tourism company, are building commercial and service centers in the central province of Thua Thien Hue.

Aeon Vietnam Co., the investor of the Aeon Mall chain in Vietnam, plans to pour US$150-160 million into a large-scale shopping mall in Hue City, Thua Thien Hue Province.

This was unveiled at the signing ceremony of a memorandum of understanding about the investment research of Aeon Mall in Hue City between the Thua Thien Hue People’s Committee and Aeon Mall Vietnam.

Phan Ngoc Tho, Chairman of Thua Thien Hue Provincial People’s Committee, said the province will strongly support the investor to do studies as well as procedures so that the latter could commence the project this year.

Tho also said apart from the commercial center, the investor was also interested in developing local raw material areas.

Meanwhile, Vietravel is building the Vietravel entertainment and service complex in Hue City. The VND140-billion project will provide a chain of travel services and auxiliary services when it comes into operation by the end of 2021.

In another development, Hue is calling for investment in a complex of hotel, commercial center, floating restaurant and tourist wharf at 121 Nguyen Sinh Cung Street, Hue City with an aim to attract tourists to visit the famous Huong River.

Late last year, the People’s Council of Thua Thien Hue Province approved the socio-economic development plan for 2021, including a list of key projects in 2021.

Some major projects will be kicked off in 2021 such as the international golf project plus the auxiliary service area and resort by ​​BRG Golf Course Joint Stock Company with a total investment capital of VND3,164 and VND1,656-billion Vinh My tourist service area by ​​Heritage Vietnam Real Estate Co.

HCM City’s export turnover surges 25.1 pct. in first 2 months

Ho Chi Minh City exported 8 billion USD worth of goods during the first two months of 2021, according to the municipal Department of Statistics, a 25.1 percent increase year-on-year.

Excluding crude oil, export turnover stood at over 7.6 billion USD in the period, a rise of 26.5 percent compared to the same period last year.

The export value of wood and wooden products posted the highest growth, surging 60.4 percent year-on-year to 224.6 million USD.

China remained the southern city’s biggest buyer, with revenue totalling nearly 1.8 billion USD, a year-on-year increase of 31.6 percent and accounting for 23.2 percent of its export value.

It was followed by the US with 1.2 billion USD, up 15.1 percent.

Local enterprises spent 10.92 billion USD on importing goods in the period, up 53 percent year-on-year./.

Hanoi’s February consumer price index up 1.8 percent

The consumer price index (CPI) in the capital city grew up 1.8 percent in February from the previous month, according to the Hanoi Statistics Office.

Ten out of 11 groups of products and services in the CPI basket recorded higher prices. The group of housing, electricity, water and construction materials posted the highest price increase of 6.02 percent, mostly due to rises in the costs of electricity, gas, and construction services.

The prices of restaurant and catering services jumped 1.44 percent thanks to high consumption demand for the Lunar New Year festival – the biggest traditional festival of Vietnamese people.

Moving in the upward trend were groups of transport (1.24 percent); beverage and tobacco (0.77 percent); apparel, headwear, and footwear (0.06 percent); household equipment (0.04 percent); and other goods and services (0.11 percent). The two groups of medicine and medical services, and education both grew by 0.01 percent.

The postal and telecoms services group was the only one recording a price decline of 0.01 percent.

The Statistics Office also said that the gold price went down by 0.56 percent, while the price of US dollar dropped by 0.27 percent as compared to January./.

Aquatic exports rise 2.2 percent in two months

Export value of aquatic products reached 405 million USD in February, pushing the figure in the first two months of 2021 to over 1 billion USD, up 2.2 percent over the same period last year, reported the Vietnam Association of Seafood Exporters and Producers (VASEP).

According to the association, exports of tra fish saw positive signals since the beginning of this year after consecutive drops in 2020, with a 1.7 percent rise in the first two months of 2021 to 214 million USD.

Meanwhile, shrimp export in February was estimated at 160 million USD, down 18 percent year on year, resulting in over 380 million USD in the first two months of 2021, a slight annual fall of 0.8 percent.

At the same time, seafood exports rose 31.4 percent to 264 million USD in January but dropped 21 percent to 156 million USD in February, resulting in the two-month export value of 420 million USD, up 5.5 percent.

The VASEP said that in the first two months of this year, exports of Vietnamese aquatic products were affected by demands of markets amidst COVID-19 pandemic.

The association forecast that aquatic export value in March will reach about 640 million USD, up 1.5 percent over the same period last year thanks to high demand in the US, EU and members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)./.

Vietjet offers free baggage allowance on domestic routes

The budget carrier Vietjet Air has offered free 20kg of checked baggage for passengers on its entire flight network across Vietnam.

Accordingly, from February 27 to March 31, 2021, passengers buying tickets and flying with Vietjet across Vietnam will receive the special gift of 20kg checked baggage in addition with 7kg hand luggage completely for free.

The special offer is for passengers booking tickets at least 3 hours before departure time on Vietjet’s official sales channels at www.vietjetair.com, official Facebook page at https://www.facebook.com/vietjetvietnam/, ticket offices and official agents, applying for all payment methods. The free checked baggage is immediately applied as customers choose to include a 20kg baggage package when booking on all domestic flight routes with the flight time from February 27, 2021 to April 25, 2021.

Especially, passengers do not miss opportunities to fly and experience the new super convenient Deluxe fare type of Vietjet at an unprecedented attractive price from only 399,000 VND (17.25 USD). In addition to the 20kg checked luggage for free, Deluxe passengers can enjoy free changes of flight, date, route for unlimited times; free priority check-in; free seat selection; and included Deluxe Flight Care programme.

Government gives in principle approval to industrial park projects

The Government has given the green light to a number of industrial park projects in the central province of Nghe An and the northern provinces of Nam Dinh and Vinh Phuc.

The Hoang Mai 1 Industrial Park project in Hoang Mai township in Nghe An received in principle approval under Decision No 276/QD-TTg and will have a duration of of 50 years.

Located in the Southeast Nghe An Economic Zone, the project covers 264.77 ha and has total investment of 750 billion VND (32.4 million USD).

In other decisions, Prime Minister Nguyen Xuan Phuc approved in principle the construction and trading of infrastructure at the My Thuan Industrial Park in My Loc and Vu Ban districts in Nam Dinh and the Thai Hoa-Lien Son-Lien Hoa Industrial Park (first phase) in Lap Thanh district in Vinh Phuc.

My Thuan will cover 158.48 ha and have total investment of over 1.6 trillion VND (69.19 million USD), while Thai Hoa-Lien Son-Lien Hoa will sit on 145.27 ha and have total capital of 774.82 billion VND (33.5 million USD)./.

Hanoi’s February consumer price index up 1.8 percent

The consumer price index (CPI) in the capital city grew up 1.8 percent in February from the previous month, according to the Hanoi Statistics Office.

Ten out of 11 groups of products and services in the CPI basket recorded higher prices. The group of housing, electricity, water and construction materials posted the highest price increase of 6.02 percent, mostly due to rises in the costs of electricity, gas, and construction services.

The prices of restaurant and catering services jumped 1.44 percent thanks to high consumption demand for the Lunar New Year festival – the biggest traditional festival of Vietnamese people.

Moving in the upward trend were groups of transport (1.24 percent); beverage and tobacco (0.77 percent); apparel, headwear, and footwear (0.06 percent); household equipment (0.04 percent); and other goods and services (0.11 percent). The two groups of medicine and medical services, and education both grew by 0.01 percent.

The postal and telecoms services group was the only one recording a price decline of 0.01 percent.

The Statistics Office also said that the gold price went down by 0.56 percent, while the price of US dollar dropped by 0.27 percent as compared to January./.

HCMC helps real estate firms to ride out difficulties

HCMC leaders, including the city’s Chairman Nguyen Thanh Phong, Vice Chairman Le Hoa Binh and heads of departments, held a meeting with 16 real estate firms on February 27 to help them ride out their difficulties.

Deputy director of the HCMC Department of Construction Huynh Thanh Khiet said the real estate supply in 2020 dropped 34% year-on-year. As investors have focused more on the up-market segment, the proportion of newly developed luxury apartments and medium apartments jumped from 25% to over 41% and from 23.8% to 57%, respectively. Meanwhile, that of budget apartments dropped from 51% to 1%.

A representative of Novaland Group said some of the group’s projects are facing difficulties related to construction permits, house ownership certificates or legal procedures of the Thu Thiem new urban area.

“We hope that the Government and leaders of the city and departments will help us promptly resolve problems, enabling us to speed up our projects. This will help provide more products for the real estate market, meet the demand of the citizens, improve social security and contribute to the state’s budget,” he said.

Le Huu Nghia, director of Le Thanh Real Estate Company, said his company’s social housing projects have faced difficulties related to the legal procedures and tax policies. The time set for completing social housing project procedures has been shortened from between three and five years to 11 months but poor coordination between departments and districts may lengthen the process.

A representative of Thao Dien Real Estate JSC said the company has completed all procedures required by the relevant agencies. However, the land has not been handed over to the company to build a social housing project over the past 10 years.

Addressing the meeting, chairman of the HCMC Real Estate Association Le Hoang Chau suggested reducing investment license procedures to only four steps to save time and costs for businesses.

HCMC Chairman Nguyen Thanh Phong assigned the city’s Vice Chairman Le Hoa Binh with working with departments to help real estate firms resolve problems related to investment certificates, tax policies and house ownership certificates.

“The city will try to help 61 projects that are struggling to resolve their problems before April 15,” Phong stressed.

Going forward, the city will regard planning as a tool for construction management. The city will support the Department of Planning and Architecture and hire foreign experts to ensure proper planning.

According to Phong, the real estate sector contributes 8.2% to the city’s total revenues. Helping real estate businesses ride out difficulties is therefore vital for the city’s development.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes