Vietnam Market Watch: Mobile Gaming, Garment Industry, and S&P Growth Projections
App Downloads Record Strong Growth Due to Gaming Culture
The app market in Vietnam has shown strong growth every year purported by a strong gaming culture. In a recent industry report, gaming app downloads contributed to half of the growth on the Google Play Store. Local users have a strong interest in local game publishers with ZingPlay in the list of top ten downloads. Three of the top 10 game downloads on the Google Play and iOS App Store were from local publishers.
At least 20 million gamers have been recorded in the country, and more than 10,000 mobile games are available on Vietnamese app stores. By 2017, the market is expected to be worth U.S. $161.6 million. While the high growth of smartphones and e-commerce make Vietnam attractive to app developers and publishers, setting unique regional preferences is key to growing the market. In addition, while the gaming culture has experienced significant growth, a large part of the population does not have access to high-speed Internet service. Nevertheless, investors should make key inroads into the industry as it’s not a market that can be ignored. Foreign investors should acclimatize and gain on the ground information if considering the industry.
Garment Industry Wants Long Term Plan
The garment and textile industry plans to revise a development plan to 2020 with a vision for 2030. The current plan, which was approved in April 2014, stated that garment exports would reach U.S. $25 billion by 2020. However, the garment industry has already earned an export turnover of U.S. $27.5 billion in 2015. Given this, the Vietnam Textile and Apparel Association (VITAS) demanded another long term plan until 2040 in line with the country’s economic development. VITAS has set the current growth of the sector to be between U.S. $40 and U.S. $50 billion by 2020 rather than the targets mooted by the current plan. Foreign direct investment (FDI) brought in U.S. $2 billion into the garment sector in 2015.
Despite the growth in the industry, VITAS has raised concerns about several challenges that have caused many companies to close down. It wants government support to initiate policies and make the sector attractive to investments. Some of these measures include designated industrial parks and key economic zones, infrastructure development, incentives for investors as well as quality waste water treatment plants.
Stable Outlook for Vietnam by Rating Agency
Rating agency Standard & Poor’s (S&P) on 29 April gave Vietnam a stable outlook, unchanged from March 2015. The rating reflects strong economic growth, while macro-economic factors have been recognized showing the improved outlook by the agency and investors. Factors that have contributed include the relatively diverse and flexible economy, per capita income reaching around U.S. $2,200 in 2016 and macroeconomic stability, which has made a positive impact on exports and foreign direct investment.
All these factors along with a comparative labor cost compared to other countries have helped the competitiveness of the country. S&P stated that the country should now pay attention to controlling its budget deficit as well as the increasing rate of public debt and bad debt in the banking sector. The government plans to control and bring the budget deficit to below 4 percent of the GDP, while controlling the public debt growth rate within the upper limit of 65 percent of the GDP.
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