A Vibrant Vietnam: Takeaways from the Vietnam Economic Conference

Conference Highlights

A vibrant Vietnam is rapidly integrating into the global economy. As introduced by Professor Dao Nguyen Cat, Editor-in-chief of the Vietnam Economic Times, “Vietnam’s economy grew more than 7 percent in 2018, when it also attracted a record $19 billion worth of FDI, and it concluded talks on a free trade agreement with the EU and joined the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). It is now fully on the “radar” of international investors.”

I attended the Vietnam Economic Conference held in Ho Chi Minh City on March 12, 2019. The theme of this conference is “Breakthrough from growth drivers”, with speakers from both public and private sectors such as Dr. Tran Du Lich, a member of the Prime Minister’s Economic Advisory Group, Dr. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), Mr. Nguyen The Hao, Deputy Editor-in-chief of VNEconomy and Ms. Le Thi Nam Phuong, Deputy Chairman of the Vietnamese Young Entrepreneurs Council.

Mr. Nguyen The Hao – Deputy Editor-in-chief of VNEconomy 

To help readers better understand the dynamic Vietnamese economy, I have summarized a few key numbers and takeaways from this conference:

10% is the rate of contribution by the private sector (excluding households and individuals) to Vietnam’s GDP. It remains low while this sector creates many jobs. New jobs in the non-State sector accounted for only 26.1 percent of the total in 2000 but now account for 60 percent.

FDI is currently an important additional capital, accounting for about 25 percent of the country’s total investment, contributing about 20 percent of GDP. In 2017, FDI contributed nearly 8 billion U.S. dollars, accounting for 14.4 percent of total budget revenue.

Fulbright University Vietnam’s economic expert Mr. Huynh The Du pointed to two reasons behind the poor contribution by the private sector. Firstly, for a long period, the private sector was not considered a growth engine, but preferential treatments were given to state-owned enterprises and FDI sectors. Secondly, he felt that Vietnam’s economic policies remain flawed, forcing businesses to prioritize short-term business considerations over the longer-term.

Mr. Huynh The Du

During a panel discussion, it was shared that it would be hard for many sectors that grew quickly in 2018, such as agriculture-forestry-fishery production, tourism, and real estate, to sustain a similar pace this year. Unfortunately, some unresolved institutional bottlenecks relating to public investment and the project financing framework of build-transfer (BT) and build-operate-transfer (BOT) may affect the growth rate in 2019.
In order for the private sector to thrive and drive economic growth, these panelists advocated that the government continues to enhance Vietnam’s business environment, to simplify the existing complicated policies. In addition, all enterprises, regardless of their size and whether they are from the public or private sector, should compete fairly with one other.

14% is the country’s credit growth target for 2019 (the same as 2018, but lower than previous years). As all banks have to apply the Basel II capital adequacy ratio (CAR) in 2020, they will not be able to provide additional credit when their CAR reaches this limit. However, raising their capital base is a challenge for big lenders.

According to Mr. Nguyen Xuan Thanh from Fulbright University Vietnam, the key concern of the banking system is capital expansion, not bad debt. When a bank has sufficient funds and meets Basel II standards, the State Bank of Vietnam (SBV) should appropriately loosen the credit quota. Otherwise, its credit growth will be squeezed.

Mr. Nguyen Xuan Thanh (left) and Mr. Pham Thanh Ha (next to Mr. Nguyen) on the panel

Mr. Pham Thanh Ha – Director General of the Monetary Policy Department, SBV affirmed credit this year would still be focused on the Government’s five priority sectors of agriculture businesses, export-oriented businesses, small and medium-sized enterprises, enterprises operating in auxiliary industries, and hi-tech enterprises, to support economic growth while managing risk.

Deputy Minister Nguyen Van Hieu said Vietnam has become a member of most global multilateral financial organizations, signed more than 60 agreements for the encouragement and protection of investment, and over 90 free trade agreements. He emphasized that, “Overall, free trade agreements, especially new generations of free trade agreements, would help Vietnam integrate deeper into the global economy and create conditions to boost its economic development and restructuring, promote trade, attract foreign investment, create more jobs, develop the manufacturing sector, improve labor productivity and the competitiveness of the economy.”

Telling a compelling brand story in Vietnam

Knowing the business environment in Vietnam is just the first step, but foreign companies also need to understand the culture and habits of media consumption to bring their products and services closer to the hearts of the local people. At this conference, I met several foreign enterprises who were very keen to pick up PR pointers on how to promote their brand in Vietnam. Our PR Newswire team in Vietnam comprises of former TV hosts and reporters with years of multimedia communications experience. Here are some of our team’s suggestions:

1. Mix-and-match media channels based on audience segmentation

As population density and economic development levels vary between regions, the optimal media channels mix will be different. Therefore, companies should always plan their media mix based on their audience segmentation.

According to Kantar Worldpanel report, in urban areas, the time for TV (Coverage x Frequency) is 17 percent higher than online – the second largest channel. In rural areas, although smartphone penetration is increasing, the coverage of online channels is still less than half that of TV – 95% for TV vs 45% for the Internet in rural. This is probably the most discussed topic among brands today as advertisers here are always pondering about the optimal advertising mix between TV and online channels.

In Vietnam’s four biggest cities (Ho Chi Minh, Ha Noi, Da Nang and Can Tho), Newspaper (33 percent coverage) and Magazine (16 percent coverage) are still effective means of communication for brands to reach their objectives.

In the rural areas, especially the Northern regions, public speakers can reach 76 percent of people to reach a purchase decision mainly thanks to the activities of the Commune Cultural Centers – using loudspeakers to broadcast information, including product advertising.

2. Build and maintain good relationships with the press

In Vietnam, there is a saying that businesses should “Go to the press first before the press finds you”. According to the Ministry of Information and Communications of Vietnam, there are more than 1,000 press outlets covering many industries in Vietnam and this number continues to grow. Business news is the most closely monitored type of news for the local press.

Without a link to the local press, it will be difficult for the information from your business to reach the market effectively or counter fake news related to your brand. There are many ways to build relationships with the local press. You may connect at events such as our media coffee sessions or directly introduce yourself to the relevant editorial teams.

3. Connect via Facebook

Vietnam has the 7th largest number of Facebook users in the world. Unlike other parts of the world, Facebook is a platform for business connections in Vietnam. Here, it is common for the Vietnamese people to search for potential business partners’ information on Facebook, send messages, and then progress to arranging for email discussions or face-to-face meetings.

Campaigns that straddle social media platforms such as Facebook – YouTube – Instagram are also popular in Vietnam thanks to rich, creative and easy-to-view content. Many verticals such as banking, FMCG, hospitality services, governmental organizations, and NGOs, are actively promoting themselves on Facebook to connect and engage target customers.

For example, Phu Nhuan Jewelry (PNJ), Vietnam’s largest consumer jewelry brand, launched a “True Love” campaign celebrating love across all ages, genders or body types, in Dec 2018. As part of its multimedia approach, this brand sent a press release to optimize its channel reach across Facebook, Instagram, Youtube and traditional media such as newspapers. This heartfelt, emotional campaign generated a lot of buzz, even outside Vietnam, with its energetic videos and authentic messaging.

Source: PNJ

Many events such as seminars, forums, and industry fairs are posted by their organizers on Facebook Events to promote and receive registrations. This is a good opportunity for businesses to access information and meet potential partners as well as members of the press.

We propose that businesses join the relevant Facebook community groups. Members typically share helpful tips, learning materials, and exchange contacts. We also recommend these community groups to reach out to members of the press or keep up with Vietnamese PR updates:

• Brands Vietnam
• Hội những người thích quảng cáo (Ad Lovers)
• Launch

Currently, LinkedIn and Twitter are not popular social media platforms in our country.

This blog post is contributed by Trong Tran (Leo), Audience Development Executive at PR Newswire. Leo is in charge of partnerships, expanding our media network, co-organizing our annual Media Coffee event, sharing helpful information in Vietnam market with the media through his articles and interviews. You can contact him at trong.tran@prnasia.com or connect with him on Facebook.