The Power of Perseverance: Why Taking a Day Off Costs Vietnamese Businesses Three Days of Opportunities

Speaking at the 2024 Forbes Vietnam Business Forum on August 22, Mr. Pham Dinh Doan, Chairman of Phu Thai Group, shared that Vietnamese businesses have faced numerous challenges for two consecutive years, 2023-2024. The most significant difficulty, as felt by all, has been securing orders due to a decrease in global demand for goods.

To boost sales, businesses have resorted to drastically reducing prices, but to no avail, as revenues remain stagnant. Consequently, inventory levels have soared, estimated to have increased by 34%.

In the face of these challenges, businesses seeking growth are compelled to inject additional capital. However, accessing credit remains traditional, relying solely on mortgaging real estate and factories. Unfortunately, many businesses no longer possess such assets, making capital acquisition a strenuous endeavor.

“This is why we keep hearing about banks having excess funds, while businesses struggle with a lack of capital,” Mr. Doan explained. “Businesses seeking loans are still required to mortgage real estate, but these assets have been frozen. Normally, the number of newly established enterprises should be twice the number exiting the market, but lately, we’ve seen a balance between new establishments and closures,” he added.

However, according to the expert, the Vietnamese economy presents two contrasting pictures. On the one hand, large and well-established businesses, including foreign-invested enterprises, continue to thrive and grow stronger. On the other hand, small businesses are showing signs of weakness and decline. Essentially, those with robust competitive capabilities are faring better.

Mr. Doan shared that his group achieved a growth rate of 20% in 2023, with plans proceeding smoothly despite the turmoil of the past two years. They are also strategizing to expand into new areas.

“Struggling businesses tend to retrench or seek M&A opportunities. This presents a chance for well-resourced enterprises to expand their investments,” he noted. “For sustainable development, businesses should focus on digital transformation, embrace technology, enhance governance, and forge linkages with foreign companies.”

“This period also offers an opportunity to attract talented human resources,” Mr. Doan added. “I’m contemplating the idea of training owners within a conglomerate, aiming to gather capable individuals to co-manage the business. During challenging times, we must forge ahead because pausing for a day means losing three days’ worth of opportunities. Why stop?”

He emphasized the importance of integrity, compliance, and professionalism for Vietnamese businesses to achieve sustainable development. Compliance with the law not only fosters trust with partners but also protects the business’s employees, who are its most valuable assets.

“Many managers have no real stake in the business and are merely hired, yet they bear criminal responsibility for the company’s mistakes,” Mr. Doan pointed out. “Business owners must take this seriously and bring about necessary changes.”

Additionally, businesses should pay closer attention to regional influences, as the impacts felt by the region will inevitably affect Vietnamese enterprises. With Vietnam’s economy stepping into a new era of technological development, businesses must assess their capacity for growth and their ability to integrate…

According to Mr. Johan Nyvene, CEO of HSC Securities, the challenges faced by businesses during this period are similar and stem from global difficulties. Vietnam is in the midst of a global whirlwind, and its fluctuations mirror those of the world. Regarding the stock market, he noted that it’s understandable that people are consuming less, spending less money on staples, and consequently having less money to invest.

Nevertheless, statistics indicate that the stock market has maintained robust growth over the past two years, with trading volumes consistently reaching $1 billion and occasionally peaking at $2 billion. This showcases the Vietnamese stock market’s relatively sustainable long-term growth potential.