Standard Chartered: Vietnam is set to make a solid rebound
For this year and 2023, Standard Chartered Bank is keeping its GDP growth forecast for Vietnam at 6.7% and 7%, respectively.
The forecast is highlighted in the Vietnam section of the bank's recently released global research report, Global Focus - Economic Outlook Q3-2022: Near the tipping point.
“The June macroeconomic data proves that Vietnam's economic recovery is still on track. In the second quarter of the year, the recovery might pick up significantly, especially as tourism resumes after a two-year hiatus. However, the rising oil costs could have a detrimental impact on the economy”, said Tim Leelahaphan, an economist for Thailand and Vietnam at Standard Chartered Bank.
Though COVID-19 left severe impacts, it ramped up the speed of transforming into modern retail. Leading consumer corporates in Vietnam are expected to become Vietnam’s consumer unicorn by adopting technologies to address the challenges in the traditional retail industry.
Inflation is anticipated to be 4.2% and 5.5% in 2022 and 2023, respectively, according to economists at Standard Chartered Bank. The State Bank of Vietnam (SBV) is anticipated to maintain its policy rate at 4% in 2022 and normalize it by 50 basis points (bps) to 4.5 percent in the fourth quarter of 2023, according to Standard Chartered Bank.
The SBV is expected to continue to be watchful for inflation and financial instability, especially given the continued geopolitical threats, but we anticipate it will remain accommodative this year to support businesses. Even though Viet Nam's economy has only recently begun to revive, it has not yet indicated a change in its position. Given growing inflation and a weaker-than-expected Vietnamese peso, there is a danger that the SBV will hike rates sooner than we anticipate, Tim added, especially if the Fed keeps its relatively hawkish posture.
The UK-backed bank elevates its USD-VND estimates to account for increased commodity price pressure on the goods trade balance, with USD-VND predicted at 23,000 at the end of Q3-2022 and 22,800 at the end of Q4-2022.- The bank expects sharp Vietnamese đồng appreciation next year, along with a likely rebound in Việt Nam’s current account surplus.
How a Vietnamese corporate sets the path becoming Vietnam’s consumer unicorn?
Consumer goods have become the cornerstone that enables the growth of Masan Group, which focuses on the large market scale of the consumer goods segment. Simultaneously, Vietnam’s consumer unicorn promotes existing business activities, accelerating growth by mergers and acquisitions in focused areas.
Masan Group is the only integrated off-to-online retail consumer ecosystem in Vietnam that owns manufacturing facilities for FMCG products (Masan Consumer Holdings, Masan MEATLife), distributes directly to consumers via WinCommerce (WCM), owns the largest retail system with the largest points of sale, and expands into the F&B and telecommunications sectors through controlling stakes in Phuc Long and Mobicast.
The leaders of Masan have other objectives in mind besides creating the way for their company's consumer goods to enter Vietnam's largest modern retail channel.
The corporate’s roadmap is to serve 100 million Vietnamese based on the theory of "3 circles of demand". The three circles' aspects include necessities, financial services, and at last, lifestyle needs.
While transforming and digitizing its B2C platform, the Vietnam’s consumer unicorn aims to modernize 300,000+ general trade retailers who Masan Consumer is partnering with.
“"Our goal is to create a comprehensive platform that covers the entire consumer value chain, fr om manufacturing to serving customers." Applying technology across the entire consumer value chain we aim to drive cost efficiencies with the end goal of delivering consumers’ 5-10% savings for their daily essential needs – the key is the supply chain.” Masan’s representative says.
Masan is currently in the early stages of testing the supply chain of the future, comprising of logistics fulfillment and dark store warehouses in its supermarkets powered by AI and ML for autonomy. Through centralization, technology, and the virtuous cycle of the scale of a Vietnam’s consumer unicorn, Masan aims to achieve efficiencies with less distance to be covered, fuller containers, and better supply and demand planning, which will reduce shrinkage costs and optimize inventory levels across the entire consumer value chain. This will also ensure that products are always available without funding and storing excessive inventory. Masan’s future supply chain combined with its expanding offline network will be key to improve the fulfillment and last mile logistics, powering our online ambitions economically and sustainably.
The long-term game of the Vietnam’s consumer unicorn is to offer this solution to its merchant partners (general trade locations) to drive out the inefficiencies of Vietnam’s multi-layered, inefficient consumer infrastructure. Bringing “new retail” solutions to our merchants is the only way to make basic goods 5-10% cheaper as GT still represents 90% of the retail market.
“We also want to build a win-win partnership wh ere our merchant partners’ consumers can access Masan’s ecosystem offerings – partnership with merchants is the only way to serve 100 million consumers.” Masan’s representative added.
Thanks to the Vietnam’s consumer unicorn presence in many essential consumer sectors, the group owns a massive customer base, with 98 percent of Vietnamese households using at least one Masan product, nine million loyal WCM customers, nearly five million wealthy Techcombank customers, and young, digital-savvy Phuc Long customers with an urban lifestyle. The group can also reach millions of consumers through strategic O2O partners such as Lazada.
Together with strategic partners, the Vietnam’s consumer unicorn’s business pillars provide customers with multiple conveniences.
Promotions and discounts are not the only things that draw customers to modern shopping, according to Masan. Instead, the group is exploring and creating breakthrough business models that can provide innovative solutions and strong brands to bring consumers more value. That’s how a Vietnam’s consumer unicorn can create value for Vietnamese people.