PricewaterhouseCoopers (PwC), one of the largest professional audit services firm in the world has identified five specific sectors that have the greatest potential for growth and investment in Vietnam.
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| Vietnam could be among the Top 20 economies in the world by 2050. Photo: TL |
In the 'Spotlight on Vietnam', PwC has identified five specific sectors that have the greatest potential for growth and investment in Vietnam. The publication was released on the occasion of Vietnam being the host of Asia-Pacific Economic Cooperation (APEC 2017).
Specifically, the sectors of opportunity are (1) Business process outsourcing (BPO); (2) Solar and wind energy; (3) Luxury hotels; (4) Modern agribusiness and food and (5) Retail banking.
"Vietnam is not a Korea 20 years ago, or a China 10 years ago. In some sectors, like IT, Viet Nam is not far behind from the global standard."
Kim Seung Rok - President and CEO of Woori Bank Viet Nam
Firstly, information and communications technology (ICT) is a booming sector in Vietnam. In 2016, total ICT revenue was estimated at US$59.9 billion, an increase of 9.4 per cent over the previous year. This sector is supported by a strong telecommunications infrastructure, and now boasts nearly 14,000 players. Vietnam’s ICT master plan aims to turn the nation into a developed economy in ICT by 2020.
According to the Vietnam Software and IT Services Association (VINASA), Vietnam’s BPO industry has grown 20 per cent to 35 per cent annually over the past decade. In fact, as of 2016 Vietnam has overtaken China to become Japan’s second largest software outsourcing partner.
Regarding the second sector, Vietnam is looking at renewable energy to accommodate the growth in electricity demand. The government’s revised National Power Development Master Plan VII (PDP 7) plans to nearly quadruple the installed capacity for renewable energy to 21 per cent as a percentage of total installed capacity by 2030, up from 5.37 per cent in 2015. Wind and solar energy have been prioritised as a means to increase the proportion of electricity generated from renewable sources.
Thirdly, Vietnam’s tourism sector is expected to become a key contributor to the economy and its growth. According to the World Travel & Tourism Council, Viet nam’s tourism revenue in 2016 reached US$9.3 billion (approximately 4.6 per cent of total GDP). Within tourism, we see the upscale and luxury hotel industry—those rated as four stars and above—as relatively untapped and having the greatest potential for investment.
"Leisure travel has experienced significant growth of 30% in 2016. This is incredible and unlike anywhere else in the world."
Michael Hoe-Knudsen - Regional General Manager of InterContinental Hotels Group (IHG) Viet Nam/Cambodia
Fourthly, agriculture is still a major economic sector in Vietnam despite its move away from an agrarian economy. This sector accounted for 18 per cent of GDP in 2016 according to the World Bank, and employed an estimated 17 per cent of the total population. The government is looking to businesses to play a growing role in raising the sector’s technology level and increasing farmers’ access to modern technology applications.
Lastly, Vietnam’s banking and financial services sector is undeveloped but boasts high growth potential. Within this sector, PwC foresees room for growth in retail banking, in particular payment cards and wealth management services.
"Vietnam’s market is extremely dynamic, and ever-changing. With an unbanked population of around 60-70%, Vietnam’s retail banking is a segment Hong Leong Bank Vietnam is very much focused on and where we want to make a difference."
Raymond Sia Say Guan - CEO of Hong Leong Bank Vietnam
PwC asserts that the future of Vietnam lies beyond manufacturing and labour-intensive industries. People, knowledge and technology are tipped to be the economy's next growth engines as it transitions towards a medium-to-high-income economy by 2050.
Earlier this year, PwC projected in its 'World in 2050 report' that by 2050 Vietnam could be among the Top 20 economies in the world and Top 10 in Asia. The average real GDP growth of Vietnam could reach 5.1% per year between 2016 and 2050.
Three major growth engines drive opportunities for investors in Vietnam including (1) Young and growing workforce; (2) Competitive economy, beyond low cost and (3) Government committed to growth.
(Source: Hanoitimes)
If you are seeking investment opportunities in Vietnam or want to know investment environment in Vietnam, please contact us at vannam@fdi-vietnam.com or fdi-vietnam.com
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