Our Briefing from the Canadian Chamber of Commerce in Vietnam’s Crystal Ball Business Luncheon
An Entrepreneur’s Guide for Vietnam in the Year of the Monkey
The East Asian Lunar New Year, known as Tết in Vietnam, begins on February 8 this year. The holiday marks the largest annual human migration in the world as people across East Asia travel great lengths to be reunited with loved ones. In Vietnam, the Lunar New Year is celebrated by sharing traditional food, visiting relatives and of course, giving li xi or ‘lucky money’ in red envelops. Each Lunar New Year celebrates one of twelve zodiac animals and this year it’s the monkey. Each animal has a unique auspicious meaning, indicating what activities and relationships will be fruitful and which to avoid in the new year.
To ensure a successful year, entrepreneurs must look beyond the stars and rely on rigorous market research. So what does the Year of the Monkey hold for those wishing to enter the Vietnamese market? We listened to expert predictions at the Canadian Chamber of Commerce’s Executive Summary & Outlook for 2016 to find out.
Victoria Kwakwa, country director of Vietnam for the World Bank reported that of ASEAN countries, Vietnam has been doing exceptionally well post the 2008 crash. Throughout the recovery period Vietnam had the highest export index rating, even greater than China’s. Vietnam’s economy also appears to be quite resilient, given the country’s record low inflation and relatively stable exchange rate amidst volatile international markets.
However, Vietnam’s rosy economic success isn’t without a few thorns. Kwakwa predicts that in 2016 Vietnam will begin a seismic demographic transition and will age faster than any other country recorded in history. She identifies Vietnam’s aging population as a key issue to address in the coming years. Vietnam’s large low-skilled workforce, once the backbone of economic growth, is being replaced by a much smaller population. To support the retiring generation, productivity must increase, affordable social safety nets must be put in place and healthcare services must expand.
Ralf Matthaes, managing director of market research firm, Infocus Mekong Research described what Vietnamese consumers want to spend money on in the Year of the Monkey. He predicts that Vietnamese consumers will most likely increase spending in education, healthcare, smart technology and high-end products such as cars. Not unlike many other emerging markets, Vietnam has experience an explosion of urban digital ownership. For companies entering the market, there are many opportunities to advertise through smart technology that haven’t been exploited yet.
Fredrick Burk, managing partner at Baker & McKenzie (Vietnam) law firm expressed excitement regarding Vietnam’s participation in numerous free trade agreements, most notably the Trans-Pacific Partnership (TPP), a trade agreement among twelve Pacific Rim countries. This year, each of the countries will begin the process of ratification. If successful, Vietnam’s GDP is expected to experience the most significant growth of all partnering countries. Foreign companies investing in Vietnam will benefit from legal changes that will level the playing field between domestic and international companies.
Overall, the regional experts shared a general tone of optimism about the future of the Vietnamese economy. Education, healthcare and innovation in productivity appear to be opportune sectors of investment for social entrepreneurs.
Over the next few journal entries, we’ll be covering startup support services in Vietnam to help you succeed in the Year of the Monkey.
11th Crystal Ball Business Luncheon
‘The Year Ahead: Executive Summary & Outlook 2016’
Expert Predictions and Opportunities
Thursday, January 28, 2016
Park Hyatt, District 1
Ho Chi Minh City, Vietnam