Amidst the digital wave surging through many ASEAN states, facilitating their businesses to have closer connectivity with global markets, many Vietnamese enterprises nevertheless remain slack in adopting digital solutions, causing impediments in improving their competitiveness.
Garment 10 Corporation JSC, one of Vietnam’s 500 largest businesses, according to VNR500, is known as a business featuring significant improvements thanks to digital transformation. Early in catching the trends, Garment 10 has already applied modern technology into administration, production, and distribution.
“Applying new solutions into production for both domestic and overseas markets, collecting the information of customers, markets, tastes, and designing has brought numerous achievements to the corporation recently,” CEO Hoang The Nhu shared at a recent conference on the ASEAN economy. “In addition to standardising all processes, applying Industry 4.0 and automation has already improved the performance and productivity of all units.”
Digitalisation is also being applied in online marketing and sales (via websites and fan pages), contributing significantly to the general revenue of Garment 10. “This confirms that digitalisation is a proper movement for the corporation, bringing new experience to customers and reporting better performance than via traditional methods,” Nhu said.
Digital transformation is a global trend. However, in Vietnam, Garment 10 is one of the few local businesses willing to apply such a model. At a conference held at the end of 2019, the group said that only 10 per cent of local businesses apply digitalisation, while the remaining 90 per cent have yet to do so. This figure for Vietnam is a great deal different from the average of other countries and will lead to disadvantages in mobilising investment and improving competitiveness.
Around 70 per cent of total venture capital into Asia comes from internal resources, where countries like China and Japan are major investors developing their businesses across the region. Asian businesses have provided 60 per cent of total investment in recent times, with $9.1 billion into ride-hailing service Grab (in Singapore), $1.4 billion from Japanese conglomerate holding company SoftBank, and $1 billion from Japanese car giant Toyota. Meanwhile, Chinese technical giants Tencent and Alibaba are major investors in ASEAN startups such as ride-hailing app Go-Jek and e-commerce platform Lazada.
Trinh Minh Giang, chairman of Venture Management Consulting Group (VMCG) said, “The exchange of internal resources in Asia has enabled some ASEAN economies to emerge and become new innovation hubs, where a lot of technical giants and high-tech projects are based and developed in. In addition to Singapore, Jakarta in Indonesia and Myanmar’s Yangon are emerging as the ‘silicon valleys’ of the ASEAN.”
Thereby, in order to catch up with the trend and become not left behind, especially after the current pandemic, digitalisation is an essential process in order to match the growth speed of regional countries and survive after the crisis.
Experts said that COVID-19 is a sign that local businesses cannot stand by the wayside of the evolution, because the same crisis could re-emerge at any time. While the pandemic has hit the economy horribly, events such as this can contribute towards boosting infrastructural development, technology, and working processes moving ahead to online solutions and digitalisation.
Highly appreciating the role of digital transformation, Nguyen Trung Chinh, vice chairman of the Vietnam Private Entrepreneurs’ Association cum chairman of CMC Corporation, said, “The earlier they acknowledge and implement, the sooner success comes.” In fact, digital transformation will minimise costs, optimise operation, and management, and report performance more specifically.
Digital transformation provides suggestions to create new products and services based on a digital platform or delivers traditional goods on ommichannels to gain breakthrough revenue. In Vietnam, some retailers like Big C, Saigon Co.op, and VinMart that apply new models in promotions, sales, and delivery have already seen significant increase of revenue, even during the pandemic.
Digitalisation will multiply the scale of business operation and outcome by creating more sales and marketing channels like D2C (direct to customers) and O2O (online to offline), and chances of approaching global customers will be unlimited.
Other experts in the field have outlined culture and strategy, leading staff and customers, innovating processes, applying new technology, and utilising data are the priority pillars in order to embrace such a transformation.
As a result, digital transformation is the only way for local businesses to survive after every crisis, catch up with global and regional trends, and enable Vietnam to become one of the tech hubs of the region, just like Singapore, Jakarta, and Yangon.