With the rise in urbanization from 2004 to 2015, waste generated in Vietnam increased from 15.6 million tons to 27.8 million tons annually, an increase of 78.2 percent. Majority of the waste collected ends up in landfills, which contaminates the ground and surface water, increase pollutants, and affect public health. Waste-to-energy technologies offer a cost-effective solution that has the potential of reducing waste volume by 90 percent and generating energy for the urban areas.
In May 2018, the government issued Decree No. 81/2018/ND-CP (“Decree 81”) relaxing regulations on sales promotion activities. Decree 81 replaced Decree No. 37/2006/ND-CP, and will be in effect from 15 July 2018. Firms that carry out commercial promotion activities, such as direct promotions, or promotions through distributors and companies fall under the scope of Decree 81.
Vietnam currently has around 3,000 startups involved in sectors such as fintech, food tech, healthcare, and e-commerce. In 2017, 92 startups received investments worth US$ 291 million, 42 percent higher compared to 2016, while the number of startups increased by 45 percent. The industry still lags in terms of funding and scale when compared to startups in Southeast Asia, but there is huge room for growth.
The number of coworking spaces in Vietnam rose by 62 percent in 2017, driven by the growth in startups, and the need for cost-effective spaces compared to existing leased office spaces. The growing demand has only attracted domestic firms but also global firms and investment funds in Vietnam. Going forward, such spaces will continue to expand in terms of supply and offerings and will not only attract startups as tenants but also small corporations who are looking to minimize costs and increase flexibility.
The agriculture industry contributes around 20 percent to the GDP while employing 40 percent of the working population in Vietnam. However, both numbers are predicted to decline in the near future. To ensure a sustainable growth going forward, the industry needs to move towards high-tech farming and value chain development to reduce costs, increase production, and achieve better product quality.
The sector continues to suffer from low product quality and climate change which reduces its competitiveness. The government has taken note of these issues and pledged to offer numerous incentives to farmers, cooperatives, and private firms to encourage investments in high-tech farming solutions in Vietnam. Currently, high-tech agricultural products only contribute around a quarter of the total value of agricultural products, leaving significant room for growth.
Vietnam is one of the fastest growing aviation markets in the world, growing by 17.4 percent in the last decade, which was driven by a rise in domestic and foreign travelers as well as the emergence of low-cost carriers. However, this rapid growth has started to put a strain on the airport infrastructure. The government has started to invest in infrastructure but more needs to be done in terms of capital and investment regulations to achieve a sustainable growth.
The rise in low-cost carriers, internet penetration, and smartphone adoption has led to a rapid growth in the online tourism industry, which is dominated by foreign online travel agencies (OTAs). When compared to foreign firms, domestic firms continue to face issues such as the lack of technology solutions, the scale of partnerships with hotels, and lack of funding, which allows foreign OTAs to offer higher discounts and bigger sales promotion schemes to attract tourists.
The world’s leading e-commerce company, Amazon, is planning to enter Vietnam, one of the fastest growing e-commerce market in Asia. Initially, Amazon will only focus on providing support to domestic small and medium-sized firms for export of their products across borders and importation of goods into Vietnam through their ecosystem.
Vietnam’s Ministry of Industry and Trade issued Decree No.08/2018/ND-CP (Decree 08) with immediate effect on 15 January 2018, amending several decrees related to business conditions in various areas including franchising, to reduce administrative procedures. With respect to franchising, the Decree 08 amended Article 5, reducing the number of conditions on foreign franchisors to only one, namely, the business to be franchised must be operating for at least one year prior to franchising.
By: Dezan Shira & Associates
Editor: Bao Chi Huynh
The alcoholic beverage market in Vietnam is experiencing a fierce competition between local and international players, especially in the beer industry. The market has witnessed a continuous growth in recent years in terms of production and consumption. Major drivers of growth are economy, young population, the rise in disposable income, and drinking culture prevalent in Vietnam.