In order for national businesses to renovate and grow, it is necessary to focus investments on the three key factors of digital transformation – capital source – human resources. However, the efforts of enterprises themselves are not enough to boost these factors but a helping hand from the central to the local authorities is also needed.
According to Mr. Dao Minh Chanh, Deputy Director of the Department of Planning and Investment of Ho Chi Minh City, the city has been implementing a series of solutions to remove obstacles and difficulties and energize businesses to rise.
Since the beginning of the year, although export turnover has increased by 14.2 percent, import turnover has surged by more than 16.7 percent. The trade balance saw a trade deficit of nearly US$600 million, of which, imported goods were mainly raw materials for production. This shows that domestic enterprises are still dependent on and short of imported materials.
Since the beginning of the new year, many enterprises have accelerated production to meet the delivery schedule. Along with that, units have been striving to connect with supply chains to increase the source of raw materials.
Vietnam is currently facing 208 trade remedy lawsuits, and this figure is expected to increase sharply in the coming time, causing the market share of Vietnamese goods to be at risk of shrinking in many export markets.
The prices of many domestic and imported raw materials have climbed by 10-300 percent. This fact has put many enterprises, especially food and foodstuff manufacturing enterprises, at risk of having to increase their selling prices. Amid such context, the Ministry of Industry and Trade (MoIT) has issued regulations to restrict the export of some groups of raw materials in the production chain of domestic enterprises. This is a necessary solution to lower the cost of these items.
Domestic enterprises face difficulties not only in investment and business activities but also in seeking investment capital. So, what are the chances for Vietnamese enterprises to evolve and rise to become the leaders, capable of ushering the supply chain of Vietnamese enterprises to spread farther?
The total foreign investment capital in Vietnam in the first three months of this year was US$10.13 billion. According to many foreign enterprises, Vietnam is still the country with the safest and most attractive investment environment in Asia in the coming years. Meanwhile, many domestic enterprises complained that “there were still many thumbtacks under the red carpet".
More than 90 percent of domestic enterprises are small and medium-sized. The advantage of this business model is that it quickly responds to market fluctuations. However, in the opposite direction, due to small scale and weak internal resources, it is also vulnerable when the market experiences shock.
Nearly 93,500 enterprises have had to leave the market since the beginning of this year, an increase of 15.6 percent over the same period last year. The Covid-19 pandemic has developed complicatedly and has been negatively affecting the production of domestic enterprises.
The production situation of the food, foodstuff, and beverage processing industry is estimated to have decreased by 2.2 percent since the beginning of the year. Facing that fact, many domestic enterprises have increased their market share in the domestic market to limit the losing momentum.
The Office of the Ministry of Industry and Trade (MoIT), on October 24, informed the press that the balance of trade of Vietnamese goods between domestic and foreign-invested (FDI) enterprises was veering strongly, at the same time affirmed that Vietnam's current export turnover does not entirely depend on shrimps and fish.
In the past three years, Ho Chi Minh City has made great efforts to revive and develop the supporting industry. Besides the capital support policy, in the past three consecutive years, the city’s Department of Industry and Trade has coordinated with foreign direct investment (FDI) enterprises to implement a program to improve production efficiency for enterprises operating in the supporting industry. Thanks to that, many Vietnamese enterprises have gradually increased their competitiveness.
Up to 45.6 percent out of 6,500 enterprises participated in a survey said that the trend of production and business in the fourth quarter would be better. The export market will see booming purchasing power, which has been held back for a long time.
Generally, in the first nine months of this year, the total foreign investment capital into Vietnam reached US$21.2 billion. Of which, there were 1,947 newly-licensed projects. Many economic experts affirmed that the free trade agreements (FTAs) that Vietnam has already signed and will sign this year are accelerating the flow of foreign investment to Vietnam.
Over the past years, with the advantage of a potential distribution market thanks to a large population size of 96 million people, and young population structure with 60 percent of the population at the age from 18 to 50, along with other favorable factors, the wave of domestic and foreign direct investment capital has continued to pour into the retail industry of Vietnam.