Vietnam market
Socialist Republic of Vietnam
Fig. 1 National flag of Socialist Republic of Vietnam
As of 2016, the population of Vietnam stands at approximately 94.6 million people. The population had grown significantly from the 1979 census, which showed the total population of reunified Vietnam to be 52.7 million. In 2012, the country's population was estimated at approximately 90.3 million. Based on the 2009 census, 70.4% of the Vietnamese population are living in rural areas while only 29.6% live in urban areas. The average growth rate of the urban population has recently increased which is attributed mainly to migration and rapid urbanisation. The dominant Viet or Kinh ethnic group constitute nearly 73.6 million people or 85.8% of the population.
Fig. 2 Map of Socialist Republic of Vietnam
Since the early 2000s, Vietnam has applied sequenced trade liberalisation, a two-track approach opening some sectors of the economy to international markets. Manufacturing, information technology and high-tech industries now form a large and fast-growing part of the national economy. Though Vietnam is a relative newcomer to the oil industry, it is currently the third-largest oil producer in Southeast Asia with a total 2011 output of 318,000 barrels per day (50,600 m3/d). In 2010, Vietnam was ranked as the eighth-largest crude petroleum producer in the Asia and Pacific region. The United States purchased the highest amount of Vietnam's exports, while goods from China were the most popular Vietnamese import.
According to a December 2005 forecast by Goldman Sachs, the Vietnamese economy will become the world's 21st-largest by 2025, with an estimated nominal GDP of $436 billion and a nominal GDP per capita of $4,357. Based on findings by the International Monetary Fund (IMF) in 2012, the unemployment rate in Vietnam stood at 4.46%. That same year, Vietnam's nominal GDP reached US$138 billion, with a nominal GDP per capita of $1,527. The HSBC also predicted that Vietnam's total GDP would surpass those of Norway, Singapore and Portugal by 2050.Another forecast by PricewaterhouseCoopers in 2008 stated Vietnam could be the fastest-growing of the world's emerging economies by 2025, with a potential growth rate of almost 10% per annum in real dollar terms. Apart from the primary sector economy, tourism has contributed significantly to Vietnam's economic growth with 7.94 million foreign visitors recorded in 2015
1. Introduction to Vietnam
The Vietnamese consumer electronics market grew strongly between 2010 and 2014, particularly in 2011 and 2014. The market is expected to continue growing strongly until 2019. Table 1 shows the market value of consumer electronics product in Vietnam, the Vietnamese consumer electronics market had total revenues of $0.7bn in 2014, representing a compound annual growth rate (CAGR) of 11.7% between 2010 and 2014. In comparison, the Kazakhstan market grew with a CAGR of 1.4%, and the Hong Kong market declined with a compound annual ratio of change (CARC) of -4.9% respectively, over the same period, to reach respective values of $0.6bn and $0.87bn in 2014. The audio & visual equipment segment was the most lucrative for the Vietnamese consumer electronics market in 2014, with total revenues of $0.5bn, equivalent to 68.9% of the market's overall value. In comparison, sales of photographic equipment generation revenues of $0.2bn in 2014, equating to 31.1% of the market's aggregate revenues. Photographic equipment is becoming obsolete to the casual consumer, with smartphones and tablets providing similar functionality but with much greater utility, explaining the segment's collapse in recent years. The performance of the market is forecast to deceleration, with an anticipated CAGR of 7.7% for the five-year period 2014-2019, which is expected to drive the market to a value of $1.1bn by the end of 2019. Comparatively, the Kazakh and Hong Kong markets will grow with CAGRs of 1.7% and 0.7% respectively, over the same period, to reach respective values of $0.7bn and $0.9bn in 2019. The Vietnamese consumer electronics market grew by 16.9% in 2014 to reach a value of $738.6 million. The compound annual growth rate of the market in the period 2010–14 was 11.7%.
Table 1 Vietnam consumer electronics market value (2010-19)
2. WDIRC selling
The forecast of WDIRC selling can be shown in Table 2 during the first ten years since product launched. Here the assumptions of households, occupancy ratio, initial sale, selling price, and manufacture cost are 22,444,322, 0.0040%, 898, 250 and 200, respectively. The first year is set as the baseline for comparison with the following years, the sale volume, year penetration, revenue, cost and profit are 898 (sets), 40 (ppm), 224,443(USD), 179,555 (USD) and 44,889 (USD), respectively. As we think, the growth rate with years will be 1, 3.56, 5.76, 7.06, 9.86, 12.58, 14.84, 15.04, 17.50 and 18 times over the first year. The year penetration of WDIRC will be from 40 ppm to 720 ppm at the end of tenth year, the totally ownership (penetration) is close to 0.420%, it still is a low penetration ratio in Vietnam even WDIRC listed in market for ten years. However the revenue, manufacture cost and profit these three also present an ascending trend, the profit earned from Vietnam is about $ 0.807 million at the tenth year in an exclusive market, it owns a huge market and profit in this market. Totally according to our prediction and assumption, the selling in Vietnam will be up to 94,442 sets, even this; the penetration ratio is still lower than other consumption electric products such as TV, Refrigerator, Air conditioner, and Wash machine.
Table 2 To estimate the selling of WDIRC in Vietnam
How about the annual growth rate for selling WDIRC in Vietnam market? Fig. 3 shows the result. Here the calculation of revenue can use this equation as “WDIRC’s Revenue = Annual growth rate * Year + Baseline”, the formula can be written in a mathematic equation in Figure. According to this regression by data simulation, the annual growth rate it take about $439.4k per year (r2 =0.9816), in other words, by averaged the annual revenue is $439.4k in Vietnam market for selling WDIRC products during the first decade.
Fig. 3 To estimation the revenue of WDIRC selling in Vietnam market
3. Rice selling
A ten-years forecast to WFR sale, after WDIRC launched in Vietnam market, is presented in Table 3. The first year since the marketing of WDIRC, online/offline deals for WFR sale are 50,763 kg, here the assumptions of population, rice consumption, sharing of WFR, online buying rate and market sharing are 94,444,200, 215.00, 0.01%, 5.00%, and 50%, respectively. How to calculate the WFR volume by online/offline sale, Eq. 1 is the equation for calculating the WFR sale volume.
Eq. 1 SaleVolume=Population x RiceConsumption x WFRratio x On/OffBuyingRatio x MSharingRatio
(eg. 50,763 = 94,444,200 x 215.0 x 0.0001 x 0.05 x 0.5)
The use rate of WFR is set as 0.00054 kg/person-year. Based on this, we can get the annual revenue is $ 25,382 (WFR priced as $0.5), and the profitability is set to 10%, so the profit that will earn $ 2,538. Changing with the time, the ratio of WDIRC in kitchens will increase and cause the use of WFR increasing. We assumed the series of growth rate (G.R.) by years is 1, 3.54, 6.21, 9.16, 9.25, 12.46, 13.82, 23.50, 33.93 and 39.52. G.R. it is based on the prediction of WDIRC’s growth. By this series of G.R., both revenue and profit, they will also be presented like these serials when the dealing cost of WFR through online/offline transaction is keeping constant. Whatever the cost of online/offline transactions depends on the volume of WFR’s selling, so if the volume with time is scaling up, the dealing cost will be significantly lowered, in other words, the profitability with time will increase more than our prediction. If all hypotheses are true, the profit in tenth year will approach to $ 100,305. Eq. 2 calculates the penetration of WFR which to be used in this country by people. From this indicator (URate of WFR), we can see the level of penetration of WFR, even at the tenth year, the level of WFR use rate in Vietnam is still underestimation, that’s meaningful for us to optimistically think, the use rate of WFR can be easy completed and it will be grew up more than our prediction.
Eq. 2 URate of WFR = SaleVolume of WFR / Population
(eg. 0.00054 = 50,763 / 94,444,200)
Table 3 To estimate the selling of WFR in Vietnam
Regarding the revenue of WFR selling in Vietnam, Fig. 4 shows the result. This is a prediction by data simulation according to our assumption, the regression could be calculated as “WFR’s revenue = Annual growth rate * Year + Baseline”. The result shows the annual growth rate is 101.991k per year (r2=0.8818), in other words, the increasing of revenue of WFR selling in Vietnam is 101.991k dollar per year. This growth can help the company to maintain its team in the local market for servicing customers.
Fig. 4 To estimation the revenue of WFR selling in Vietnam market
4. To summarize the revenue and profit
Here according to the estimations above, we summarize the incomes from sales of WDIRC and WFR in Vietnam. Both revenues and profits are presented in Table 4. In the first year, the products of WDIRC and WFR are unfamiliar with Vietnam people; namely the recognition and acceptance aren’t well to local consumers, so on the beginning (1st year) sales would be not good and the totally revenues and profits will be $ 249,825 and $ 47,427, respectively. Both of them will increase with years when selling with good experiences and promotions. Through our forecast, at the end of tenth year, the profits of WDIRC and WFR will be up to $ 807,950 and $ 100,305, and the totally profit will be $ 908,255, this is a huge profit which be created in Vietnam market by our novel products and services.
Table 4 To estimate both revenues included WDIRC and WFR selling in Vietnam
Totally the revenue of WDIRC and WFR (2W) selling in Vietnam market can be shown in Figure 5. The 2W revenue in first year is $249.825k dollars, after that the growth rate of revenue is $541.391k per year, this is a simple regression by mathematic model to predict the revenue on product selling. In practice, there are other factors that need to be considered much more, it could be higher than this or lower. Whatever by this calculation let us to trust that the market it always be there.
Fig. 5 To estimation the revenue of WDIRC and WFR selling in Vietnam market