A bird’s eye view of a port in Ho Chi Minh City. Photo: Quang Dinh / Tuoi Tre
From being one of the fastest-growing economies in the world to the signing of free trade and investment protection deals with the EU, there were a handful of milestones and issues worth mentioning when it comes to Vietnam’s business and economy throughout the year of 2019.
Below are the nation’s biggest business and economic stories of 2019 selected by Tuoi Tre News.
1. ‘Impressive’ GDP growth against global slowdown
In 2019, Vietnam posted a gross domestic product (GDP) growth rate of 7.02 percent despite the growing strategic competition in Asia and the world.
The gains were hailed as “impressive” by the country’s General Statistics Office, given the global context of slowing growth and worsening U.S.-China trade tensions.
This is the second straight year the country has fulfilled all 12 targets set by the lawmaking National Assembly, including a record trade surplus of US$11 billion, total registered foreign direct investment (FDI) capital reaching a ten-year high of $38.02 billion, low budget overspending, and inflation under three percent.
This is also the fourth consecutive year inflation has been kept below four percent.
|A man works at a garment assembly line of Thanh Cong textile, garment, investment and trading company in Ho Chi Minh city, Vietnam July 9, 2019. Picture taken July 9, 2019. Photo: Reuters|
2. Landmark deals with the EU
On June 30, the European Union – Vietnam Free Trade Agreement (EVFTA) and Investment Protection Agreement (EVIPA) were officially signed in Hanoi after nine years of negotiation.
The deals commit to the highest standards between Vietnam and the EU.
Under the EVFTA, the two sides pledge to remove more than 99 percent of import tariffs, the strongest cut among the FTAs Vietnam has signed.
Meanwhile, the EVIPA also holds significance as it helps ensure an open and better investment and business climate for investors from around the globe.
|European Commissioner for Trade Cecilia Malmstrom, Romania’s Business, Trade and Enterpreneurship Minister Stefan Radu Oprea and Vietnam’s Industry and Trade Minister Tran Tuan Anh exchange documents while attending the signing ceremony of EU-Vietnam Free Trade Agreement at the Government Office in Hanoi, Vietnam June 30, 2019. Photo: Reuters|
3. Historic pork shortage caused by African swine fever
On February 19, the Ministry of Agriculture and Rural Development officially confirmed the first-ever appearance of the African swine fever in Vietnam.
The disease, which is not harmful to humans, has no vaccine or treatment currently available.
By mid-December, nearly six million pigs weighing over 342,800 metric tons, or about 20 percent of the nation’s hog herd, had been culled due to the disease.
The epidemic has led to a historic pork shortage in Vietnam, pushing pork prices up in the final months of the year.
Moreover, the shortage also sent Vietnam’s pork imports in the first 11 months of this year rocketing to 110,000 metric tons, according to the Ministry of Finance.
Pork products from such countries as the U.S., Poland, Spain, Germany, Hungary, and Canada – some of which have never exported pork to Vietnam – have since flooded the Vietnamese market to make up for the domestic shortage.
|A woman buys pork at a wet market in Ho Chi Minh City. Photo: Quang Dinh / Tuoi Tre|
4. Outstanding M&A deals
In 2019, Vietnam continued to witness high-value merger and acquisition (M&A) deals in a variety of sectors, including food manufacturing, ecommerce, entertainment, banking, and retail.
The latest deal was the internal merger of ecommerce platform Lotte.vn into the retail firm Lotte Mart last week. Both companies are subsidiaries of South Korean multinational conglomerate Lotte Corporation.
Earlier this month, local retail giant Masan Group acquired the VinCommerce and VinEco arms of Vietnam’s leading privately-run conglomerate Vingroup to establish a leading consumer retail company with a network of over 2,600 supermarkets and convenience stores in the country.
Under the agreement, Vingroup will swap its shares in VinCommerce for stakes in the new company and become a stakeholder.
In June, Vietnamese retailer Saigon Co.op and French retailing group Auchan announced that the former would take over the entire business operations of the latter in Vietnam, marking Auchan’s withdrawal from Vietnam after four years.
Accordingly, Saigon Co.op took over 18 stores, 15 of which had previously been closed by the French retailer while the other three had been operating at a profit, along with the ecommerce platform and online application of Auchan Vietnam.
|Shoppers check out at a counter in a VinMart+ convenience store in Ho Chi Minh City, Vietnam. Photo: Quang Dinh / Tuoi Tre|
In January, Vietnam’s Yeah1 Group successfully acquired 100 percent of ScaleLab, a U.S.-based YouTube multi-channel network, for $20 million.
However, the Vietnamese media giant sold the just-acquired network back to its original owner only two months later.
5. Mushrooming of social networks
Vietnam’s latest social media project, Lotus, had its beta version launched by Vietnamese communications group VCCorp in September.
The VND1.2 trillion ($51.78 million) project was the work of more than 200 local developers from various fields such as mobile applications, artificial intelligence, big data, and cloud computing.
Despite setting a target of attracting up to 60 million active users, Lotus has failed to live up to the hype generated before the launch.
In July, social media platform GAPO was launched with a committed VND500 billion ($21.53 million) investment from Thai venture capital firm G-Capital.
The network claimed to have amassed more than one million users just one month later.
|Minister of Information and Communications Nguyen Manh Hung speaks at the opening ceremony of the made-in-Vietnam social network Lotus in Hanoi, September 16, 2019. Photo: L. Chi / Tuoi Tre|
In June, the Central Commission for Propaganda and Education under the Communist Party of Vietnam launched its very own social network – VCNET.
Meanwhile, Zalo, a product of Vietnam’s online game developer and distributor VNG Corporation, was fined for operating as a social network without a proper license and had two of its web domains revoked for the violation in July.
Zalo was launched in 2012 as a messaging and phone app and has since grown to become the largest homemade chat app in Vietnam, boasting over 100 million users as of May 2018.
Despite the undesirable example of Zalo, Vietnam’s social network market may welcome a new player in 2020 after Vietnamese pop star Son Tung M-TP announced this month that he will introduce his own social networking site called Skysocial – named after his fandom – next year.