The Vietnamese market has become a "sweet pastry" in the eyes of investors and entrepreneurs.
The recent news hot spot is that Hong Kong's richest man Li Ka Shing turned his attention to Vietnam after cashing out hundreds of billions of funds in Europe. At the same time, according to the data of Vietnam Bureau of statistics, the total import and export volume of Vietnam in the first quarter of 2022 was about 176.35 billion US dollars, of which the export volume soared to about 88.58 billion US dollars, a year-on-year increase of 12.9%. Compared with the total exports in the first quarter, Vietnam surpassed Shenzhen.
More and more investors began to focus on this Southeast Asian country and want to catch the fast train of development. In the past, when referring to Vietnam, the picture in many people's mind is motorcycles and slippers. The impression of this country is "to be developed, too casual to be lazy".
But for those who have been to Vietnam, the overall impression of this small country is changing. Especially in the past decade, the effect of "reform and opening up" has begun to appear. Vietnam has developed into an economy driven by the export of processing and manufacturing industry. In previous years, the stock market and property market have increased significantly, and the number of people going to "dig for gold" has continued to increase.
According to the reporter's observation, most of the Chinese who "dig for gold" in Vietnam "focus on three fields: manufacturing, e-commerce, real estate and stock market investment. The reporter talked with entrepreneurs and practitioners engaged in relevant fields in Vietnam, trying to understand what the real Vietnamese market is like and what opportunities are there?
Among the "Nuggets" in Vietnam, the mentality of many people is that there has always been the shadow of China in the process of Vietnam's development. In those years, if they failed to catch up with the opportunity in China, they may catch up again in Vietnam. But at the same time, they cannot deny that Vietnam has opportunities, but there are also many traps.
"Gold rush" Vietnam: economic recovery and order growth
"In the past few months this year, we have more orders and higher profit margins," Wang Tao told reporters. In 2017, he once lived in Jiangxi Province and went to Vietnam twice. The second time, he firmly believed that "this place can do business". Wang Tao soon established a foreign trade company, mainly engaged in two major businesses, selling domestic daily necessities and other small commodities, as well as textile machinery and equipment and other industrial equipment to Vietnam. Before 2020, the company's annual revenue can reach about 8 million.
Since May 2021, the epidemic situation in Vietnam has intensified and spread, with strict closure and control for up to three months. About two months after unsealing in early October, Wang Tao noticed that the economy was improving faster than he expected. Since 2022, his company's orders have even been more than in previous years, especially in the line of large-scale industrial processing equipment. According to Wang Tao's analysis, there are two reasons. On the one hand, many competitors withdrew from the Vietnamese market because of the epidemic in the past two years.
"There are about half fewer competitors", Wang Tao estimated that since the epidemic, many Chinese people have returned home because they are worried about the continuous aggravation of the epidemic in Vietnam, while some local businesses that have just started can only fail on the way back. Although Wang Tao also returned to China in May last year, since he started his business in Vietnam in 2017, his team and customers have been more stable. The company has persisted until now, and has lived better this year.
He said that in the past, buyers would make inquiries in many ways, and businesses may have to constantly reduce prices in order to win orders, but now, buyers basically make inquiries for two or three and place orders. "In the past, the profit margin of our equipment was about 15% - 20%, and now it can reach at least 30%". On the other hand, the local demand for industrial equipment is growing. Since the closure was lifted in October last year, Vietnam, after resumption of work, has gradually increased its attraction to foreign investment, with a steady stream of factory orders. Naturally, it needs more equipment to expand production.
Relevant data show that in the first four months of 2022, Vietnam attracted more than US $10.8 billion of foreign direct investment, an increase of 88.3% year-on-year, of which the funds in place reached US $5.92 billion, and 72 countries and regions invested in Vietnam. The relevant principals of several factories announced that the factories had received a large number of orders, and the orders had even been scheduled to September. After the economic recovery of Vietnam's import and export trade, the income of local residents has rebounded, and the living consumption is also recovering. Wang Tao said that after the recovery of the company's business line of large-scale industrial equipment export, the business line of small commodity export also slowly recovered.
In recent years, Wang Tao has also made efforts to import small commodities at the same time, sharing content with the Tiktok account of "brother mustache of Jiangxi is in Vietnam", and trying to sell the pepper rich in Vietnam to China through the short video platform. However, since the outbreak, this business line has basically stagnated. Since the beginning of this year, the recovery of Vietnam's economy has made him determined again to devote more energy to developing the Vietnamese market.
In recent years, the development speed of e-commerce in the Vietnamese market can not be underestimated. Some institutions estimate that Vietnam's per capita GDP will reach about US $3700 in 2021. An analyst pointed out that Vietnam's per capita GDP has exceeded 3000 US dollars, which is a golden point for the outbreak of regional consumption.
As early as 2019, Han Sheng, an advertising company in China, saw that someone shot a short video of Vietnam's local conditions and customs, and felt that he could shoot better, so he came to Vietnam to start a short video business, and got financing at that time. Until the Spring Festival in 2020, it will be difficult to go to Vietnam again because of the epidemic.
Until February this year, Han Sheng went to Vietnam again and set a new direction. Taking tiktok as the main platform, he made live broadcast and goods in the local area. According to the statistics of some institutions, the penetration rate of social media in Vietnam reached 73.7%, exceeding the world average. In his view, this means that when users' online habits are cultivated, it is not difficult to bring goods live. According to his analysis, the local live broadcast goods are mainly divided into four categories: shoes and clothing, beauty makeup, snacks and small household appliances. However, Hansheng chose a more subdivided field to package local tea into new brands for sale.
The reason why he chose this vertical track is that, on the one hand, Vietnam is one of the world's major tea producers with rich resources, but its local sales volume is not good, and there is a certain market space worth exploring. On the other hand, it can not rely on China's supply chain and reduce the impact of material flow on orders.
"Now the habit of Vietnamese locals shopping in the live broadcasting room is slowly developing. Our goal now is to cultivate e-commerce sales and cultivate super anchor". Han Sheng's goal is to be the first of its kind in Vietnam this year. In the eyes of Wang Tao and Han Sheng, the Vietnamese market is a big gold mine. They watch waves of people arrive and leave. They also know that they have to go through waves of tests if they want to stay.
Vietnam's "gold rush", where is it?
Before the outbreak, groups of people came to Vietnam with the purpose of tourism + market investigation. Some people even chose to stay directly in the local area and start innovative undertakings. Some people have moved their jobs in China to Vietnam, such as opening restaurants, being tour guides, logistics, etc.
A practitioner deeply engaged in the Vietnamese market mentioned that people who come to Vietnam to "dig for gold" will also hold together for warmth. However, from the early chamber of commerce circle, later, with the continuous change of mainstream social platforms, a new circle has been formed. Generally speaking, the circle of Chinese Entrepreneurs in Vietnam is not large. According to the comprehensive public information and the information learned by the reporter, the people who invested and started businesses in the local area in the past decade can be roughly divided into three categories.
One is the traditional model, investment and plant construction.
When large enterprises want to seek lower labor costs, Vietnam is one of the options when investing abroad to build factories. According to the data of the world population review in 2021, Vietnam has a population of about 98 million. Moreover, Vietnam's population structure tends to be younger and its labor cost is lower. This also includes some Chinese enterprises, and industrial spillovers are accelerating.
This is the case in the mobile phone industry. In the past, Samsung invested and built factories in Vietnam, and the combined output value of each branch once exceeded 25% of Vietnam's GDP. However, since 2021, supply chain manufacturers of Chinese mobile phone brands such as Xiaomi, oppo and vivo, such as Guanghong technology, have also accelerated the layout of Vietnam and invested and built factories in Vietnam.
In addition, according to Wang Tao's observation, as early as a decade ago, many Chinese came here because large factories moved to Vietnam. After becoming company executives, they came out to invest and build factories themselves and become downstream generation factories of large factories. However, such factories are often small in scale, with a maximum number of employees of 300-500 and an annual output value of 50-60 million.
One is emerging entrepreneurship, which brings new products and new models to Vietnam.
Han Sheng's short video live broadcast with goods is one of the types. According to his observation, most young people who come to Vietnam try to start businesses in the form of we media and e-commerce. One reason is that Vietnam's fields related to live e-commerce are also in the fast lane of development, such as electronic payment, logistics and so on. A survey shows that today, the mainstream payment method in Vietnam is still cash. At the same time, digital transformation is imperative. The field of financial technology has development dividends, and relevant enterprises are easier to grow into Unicorn enterprises in the Vietnamese market.
According to reports, Vietnam can be divided into North Vietnam and South Vietnam. Cities in the north are led by the capital Hanoi, which is conservative, while cities in the south are led by Ho Chi Minh, which is more open. There are also claims that Ho Chi Minh is compared to Shanghai and Hanoi is compared to Beijing. In addition to these two major cities, Vietnam also has a tourist city Danang. The first few major cities basically cover the vast majority of target users of start-ups in Vietnam.
In addition, educational technology, blockchain games and fields related to new technologies such as artificial intelligence and the Internet of things are also hot areas for entrepreneurship. Another category is to invest in Vietnam's real estate and stock market. After 2015, with the introduction of policies such as the Vietnamese government allowing foreigners to buy real estate in Vietnam, the number of Chinese investing in real estate in Vietnam increased, mostly focusing on Ho Chi Minh and Hanoi.
Chen Ming, who is engaged in real estate development in Vietnam, told reporters that after he arrived in Vietnam in 2019, he invested and bought houses with relatives and friends. At present, the number of real estate owned in and around Ho Chi Minh City, Vietnam has reached three digits. He revealed that his friends came to Vietnam in 2017. The price of the top floor duplex bought by 20 million has now increased to 40 million yuan.
Chen Ming said that nowadays, the average price of apartment buildings in Ho Chi Minh City is about 20000 per square meter, more than 10000 in remote buildings, 30000-50000 yuan in Central Business District, and 100000 yuan in more high-end buildings.
Vietnam's stock market also rose as a whole in the first two years. According to data, Vietnam's stock market index rose 133.35% in 2021, ranking first in the world. Although the Vietnamese stock market is also falling due to factors such as the US Federal Reserve's interest rate hike recently, investors are still optimistic about the long-term value of investment in the Vietnamese market.
Wang Weiya, chairman of Vietnam construction securities, told reporters that around 2017, there were only 2 million accounts in Vietnam's stock market. By 2022, the number of accounts had reached about 5.2 million, accounting for 5% of the country's total population. Domestic funds have also participated in the Vietnamese securities market, which is one of the most convenient ways for ordinary people to participate in the Vietnamese market.
However, the investment in the stock market and real estate market is often accompanied by high risks due to strong uncertainty. People who invest and start businesses in Vietnam often dig gold and step on the pit in parallel.
Emerging markets have opportunities and pitfalls
Combined with demographic dividend, cost advantage, young population structure and strong willingness to consume, Vietnam is regarded as the next "Asian miracle" after China. People who pay attention to the Vietnamese market are optimistic about the future development of the Vietnamese market and believe that "the economy will continue to rise in the next decade at least".
However, it is not easy to get a share of the gold mine in Vietnam. "Some opportunities may exist, but they are not necessarily your opportunities. You may not be able to seize them." Han Sheng said that some people who are eyeing the Vietnamese market leave if they want to make a sum of money, but they don't know the real Vietnamese market. "Many people think that moving the Chinese run through model to Vietnam can succeed, but many ideas are unrealistic.".
He cited an example. "Some people asked whether it was reliable to sell vinegar in Vietnam. In fact, they didn't know that Vietnam rarely uses vinegar, but eats more lemons.". "To start a business in Vietnam, you should have a leader who knows the Vietnamese market and at least have business experience in China, otherwise you will step on the pit and suffer in Vietnam." Han Sheng said.
There are also many potential problems to be solved in the practical operation of starting a business in a foreign country. A founder of MCN, who started a business in Vietnam, pointed out in a recent public exchange that even the simplest registered companies and agents may have potential security risks. More importantly, many people in the Vietnamese market warned that the entire population of Vietnam is about 100 million, and the land area is equivalent to a province of China. "Although Vietnam is in the rising period, we can't myth the development of Vietnam".
Moreover, in the Vietnamese market, some opportunities are already shrinking. For example, the property market in Vietnam has cooled down compared with that before the epidemic.
Chen Ming said that today's Vietnamese property market has been affected by the economic environment, real estate policy adjustment and other factors. In Ho Chi Minh City, house prices converted into RMB are not much different this year from two years ago. There may be a stable slight rise next, but if there is no external influence, it is unlikely to see a rapid rise since 2015. Moreover, after buying a house, whether the house can be delivered on time is also a problem. Chen Ming has repeatedly encountered the situation of delayed commencement of real estate in the past two years, "the developer has been delayed, which may be the problem of the project".
Xue Chao, founder of Shouwang real estate in Vietnam, reminded that to invest and buy a house in Vietnam, first, we should consider the safety, the actual qualifications of developers in Ho Chi Minh and Hanoi, whether the project can be handed over smoothly and whether it is safe; Second, we should consider liquidity. When we want to sell cash again, who will take over, whether it is the price acceptable to the mainstream Vietnamese consumer groups, and whether the rent return in the short term is considerable.
In fact, the most realistic obstacle to "gold mining" in Vietnam is that it is no longer unobstructed to Vietnam due to the epidemic. Many entrepreneurs and migrant workers in Vietnam have not returned home for more than two years since the outbreak of the epidemic in 2020.
Chen Ming is one of them. "Before the epidemic, it was very convenient to go to Vietnam". Many cities in China have direct flights, and the air ticket is only more than 1000 yuan. Chen Ming will return home to visit his family every quarter, but after the epidemic, it has become very difficult. "I went through the formalities for returning home several times, but I cancelled my trip before I left. I can't be absent for several months."
A staff member engaged in visa processing in Vietnam told reporters that the current choice is mainly study visa and business visa. The process and procedures are more complex, and the price is about 30000 yuan. Even though the process is difficult, Wang Tao is unwilling to wait any longer. He plans to go to Vietnam next month. "If he is not the boss, he will still suffer losses in customer negotiation and miss a lot of opportunities".
作者：记者图片 来源：unsplash 文章中人物为化名
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