3 Emerging Business Opportunities in Vietnam's Transforming Sectors

We’ve previously looked at Vietnam’s economy, its top imports, and emerging industries in a Country Report. These include textiles and garments, agriculture, and electronics manufacturing.

But Vietnam is looking to make strides beyond these areas as it continues its upward trajectory. While plenty of countries and businesses are investing in Vietnam, these sectors are key areas where the Vietnamese government is looking to investing in.

Let’s take a look at these sectors and find out why they present promising business opportunities.

🔑 Read More: Wallex Country Report: Vietnam

Logistics

De-risking is a strategic move global companies take to diversify their manufacturing activities by establishing factories outside of their main hubs, which tend to be within China.  

There are many reasons for doing this. Some may see raw material or labour costs in China becoming less competitive, while others simply want to ensure that production or key operations will not be totally compromised if a factory experiences technical or equipment difficulties.  

This is good news for Vietnam, but one challenge is the strain this will add to the country’s logistical infrastructure. Existing storage and transport capabilities may not be enough to support sudden inflows of raw materials and components. Already, logistics costs in Vietnam account for as much as 18% of overall GDP, considerably higher than its peers.

Weak connectivity between transport nodes, and the lack of major ports as well as regional and national logistics hubs are some reasons for the country’s challenges in this respect.  

This mix of factors creates two windows of opportunity for businesses. Firstly, as corporations embark on projects to scale up existing logistics capabilities and facilities, there will be plenty of room for businesses to provide technical expertise as well as components such as barcode scanners, automated parcel sorting, and telescopic conveyor systems. Secondly, greater demand for logistics and supply chain services will create a lucrative market for businesses, from global companies to regional players, and smaller businesses specialising in last-mile delivery.

🔑 Read More: Wallex Industry Insights: Vietnam's Textile & Garment Industry

Digital skills

There are an estimated 1.5 million professionals in Vietnam’s information and communication technology (ICT) sector today. Yet, this is far beneath the forecasted 2.5 million professionals needed by 2030 to keep Vietnam on track with its digital transformation goals. Today, only 40% of Vietnamese businesses report having sufficient ICT capabilities, which underscores the urgency of the situation.

Even though there are institutions offering courses and training in this field, the disparity is wide and many are unprepared for in-demand roles like data analysis, software development, and cybersecurity.  This is creating a talent shortage that could hold back the country’s economic growth and development.  

Singaporean companies with expertise in digital skills training are perfectly positioned to bridge this gap. By providing targeted programmes in areas like data analysis, coding, and cybersecurity, they can empower Vietnam's workforce to thrive in the digital age.  

Vietnam’s digital transformation push also creates a ripe market for Singaporean companies offering a wider range of solutions. They can assist Vietnamese businesses to upgrade their digital infrastructure and processes with digital and IT services such as cloud computing, database management, enterprise resource planning and cybersecurity solutions.

Manufacturing

Manufacturing is the engine of Vietnam's economic growth. It has been responsible for significant sums of foreign investment over the years and contributes more than 20% to the country's GDP.  

However, much of this manufacturing activity revolves around low-cost, labour-intensive production. For many multinational corporations such as Samsung and IBM, Vietnam is primarily a hub where foreign components are sent for final assembly. Recognising that there is room to increase its participation in the global value chain, Vietnam is striving to shift its manufacturing sector towards higher value-added, high-tech industries.

Singapore's reputation for advanced manufacturing expertise places it in a good position to support Vietnam in its manufacturing transformation journey by offering a range of solutions, including:

• Advanced equipment and machinery
  Supplying key manufacturing equipment such as automated CNC bending machines for more consistent and higher quality production output; or automated optical inspection (AOI) systems for greater accuracy in detecting defects in circuit boards and other components
  

• Manufacturing software and solutions
  Introducing digital tools like Manufacturing Execution Systems (MES) and Product Lifecycle Management (PLM) software to optimise manufacturing floor processes and improve production output
  

• Smart factory design and implementation
  Create virtual replicas of planned factories with digital factory twin creation to better simulate and optimise production processes before physical implementation

🔑 Read More: Wallex Industry Insights: Vietnam's Edtech Sector

Venture into Vietnam with Wallex

Expanding into Vietnam brings the challenge of managing payments and collections in VND. Depending on where your business is based, converting SGD to VND, USD to VND, or MYR to VND for payments can generate fees that add up over the long run.  

The same applies to your Vietnamese customers or partners who need to pay you. The fees to convert and send VND to SGD, VND to USD, VND to MYR, or VND to GBP may prove expensive and over time, deter them from undertaking long-term business partnerships.

Being able to make and accept payments in VND will be pivotal in your expansion endeavours. Not only does it reduce business expenses for you and your partners, but it also means much simpler workflows that allow you to focus on core business activities.

Enter Wallex. Our fully digital platform enables your business to perform international payments with VND seamlessly. You can:  

• Pay in VND with same-day settlements

• Make bulk payments to up to 200 beneficiaries - in Vietnam and beyond

• Strategically time when you convert to VND for better rates

VND Collections are now available!

🔑 Read More: Wallex Expands VND Transaction Capabilities

You can now collect VND invoices with Wallex too! Opening a virtual VND Collections account takes no more than two minutes and it will reduce the cost of cross-border transactions for you, your customers, and business partners.

Fast, easy, and seamless – Wallex gives you all the tools you need for your cross-border transactions to simplify your business expansion. Enjoy comprehensive support from a dedicated Account Manager who ensures you get only the best rates and all the help you need.  

Speak to us today and find out how Wallex can help to make your venture into Vietnam a smooth and successful one.

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