“Vietnam is the next upcoming market, and there’s fierce competition,” says Oru Mohiuddin of consumer researcher Euromonitor International.
The country’s 90 million people increasingly are eager to buy Western brands they deem superior to many local and regional products. And marketing executives say Vietnamese are more aspirational than consumers with comparable incomes in other developing nations. That’s one reason many global companies already established in China, Brazil, and India are now turning their attention to Vietnam as the next great emerging market.
Sales of diapers, home-and-personal-care products, and beauty goods by all manufacturers totaled $ 1.35 billion in the country last year, a 14 percent increase over 2010, according to Euromonitor. While that’s minuscule compared with P&G’s global sales last year of $ 82.6 billion, Vietnam is expected to be one of the fastest-growing emerging markets in coming years, Euromonitor says, with consumer spending forecast to jump 42 percent from 2012 to 2016.
“Vietnam is a young culture, very interested in trying new things, so you don’t have to be the 100-year incumbent to be able to win,” says Deb Henretta, group president of P&G’s Asia business. Vietnam and other Asian countries, including potential markets such as Myanmar, are “the growth engines for the company.”
As costs in China rise and owners look closely at the hassles of using factories 12,000 miles and 12 time zones away, many small companies have decided manufacturing overseas isn’t worth the trouble.
For one small company, the decision was simple. Neither of the founders has ever been to China, which made communicating with manufacturers difficult. Components that were shipped from the U.S. sometimes got stuck in customs for weeks. And one of the founders had to spend hours on the phone to explain tweaks in the product. “If we have an issue in manufacturing, in America we can walk down to the plant floor,” he says. “We can’t do that in China.” He says manufacturing in the U.S. is probably 2 percent to 5 percent cheaper once he takes into account the time and trouble of outsourcing production overseas.
An April poll of 259 U.S. contract manufacturers—which make goods for other companies—showed 40 percent of respondents benefited this year from work previously done abroad. And nearly 80 percent were optimistic about 2012 sales and profits, according to the survey by MFG.com, a website that helps companies find manufacturers. “A decade ago you just went to China. You didn’t even look locally,” says Ted Fogliani, chief executive officer of Outsource Manufacturing, the San Diego company working with LightSaver. “Now people are trying to come back. Everyone knows they’re miserable.”
The London based Hong Kong and Shanghai Banking Corporation (HSBC) reportedly plans to sell the shares it is holding of Vietnamese Bao Viet, a big insurance group, in an effort to gather its strength to deal with the financial problems and the possible heavy penalty in a money laundering lawsuit.
The board of directors of HSBC on July 17 shook the international financial market by admitting before the US Senate that the banking group allowed Mexican drug cartels to launder billions of dollars through its US operations.
Reuters has quoted its sources as reporting that HSBC may face a fine of up to one billion dollars for this. It also quoted Mike Trippitt, an analyst of Oriel securities firm as saying that one billion dollars is equal to five percent of the expected pretax profit of HSBC in 2012, and that the penalty would seriously affect the financial situation of the banking group.
The last Article IV Executive Board Consultation was on May 25, 2012. Listed below are items related to Vietnam, in reverse chronological order (you can also view items by category).
Public Information Notices (PINs) form part of the IMF’s efforts to promote transparency of the IMF’s views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case. The staff report (use the free Adobe Acrobat Reader to view this pdf file) for the 2012 Article IV Consultation with Vietnam is also available.
July 06, 2012—New Public Information Notice: IMF Executive Board Concludes 2012 Article IV Consultation with Vietnam. Each Public Information Notice contains a background section, a table of selected economic indicators, and an Executive Board assessment.
Vietnamese President Truong Tan Sang has said placing the anti-corruption committee under the Party as has been decided is the best way to end corruption in the country.
At a recent meeting the Party decided to restructure the system by placing the Central Guidance Board for Anti-corruption under the Party general secretary. Hitherto, it was under the Prime Minister.
“The previous board made several gains in preventing waste and corruption, but not to the extent expected by the people,” Sang told Tuoi Tre newspaper in an interview.
Jun 20, 2012. Banks in Vietnam had weaker financial performance in 2011 than the year before and their bad debts recently have been “rising continuously,” the central bank said in a report.
The report said that overall profit growth of banks slowed in 2011 to 15.1 percent, but it didn’t give any comparable figure for 2010.
The return on equity (ROE) of Vietnam’s banking system was 11.86 percent last year compared with 14.56 percent in 2010, and the 2011 return on assets (ROA) dropped to 1.09 percent from 1.29 percent the previous year, according to the report said.