Foreign businesses warm up Vietnamese postal service market
VietNamNet Bridge – A lot of foreign companies have arrived in Vietnam to
explore the market and seek to buy the stakes of domestic postal service
companies in the last half a year, since the day Vietnam fully opened its market
Foreigners penetrating Vietnamese market
In the last 20 years, the postal service market has welcomed the world’s biggest
service providers, namely Dutch TNT, German DHL and US’ FedEx and UPS.
At first, in early 1990s, they cooperated with domestic businesses, setting up
agents that collected and delivered goods. Later, they have been carrying out a
lot of activities to implement their plan to make long term investments in
In 1995, TNT joined forces with Viettrans to set up the first joint venture in
the postal service market. In 2007, DHL teamed up with VNPT to set up DHL-VNPT
joint venture where DHL held 51 percent of stakes. In 2009 and 2010, FedEx and
UPS terminated the contract with VietnamPost to implement their own business
plans in Vietnam. FedEx then decided to team up with a private company, while
UPS cooperated with VnPost Express to set up UPS Vietnam with 51 percent of
stakes belonging to UPS.
Domestic postal service providers all have admitted that foreign companies, with
powerful finance capability, advanced technologies and experiences, have put a
hard competition pressure on them. Especially, foreign companies have been
dominating in the international express service market.
The white book on Vietnam’s information technology and communication showed that
in 2009 and 2010, the two joint ventures DHL-VNPT and TNT-Vietrans accounted for
26 percent of the market share. In 2008-2010, the market share held by domestic
firms were narrowed significantly. VNPost Express, for example, saw its market
share drop from 16 percent in 2008 to 12 percent in 2009.
Managers of VietnamPost and ViettelPost, the two big domestic service providers,
have admitted that the profits from international freight and forwarding
services are much higher than domestic services, but domestic companies cannot
squeeze into the market.
Experts have pointed out that one of the biggest problems of domestic firms is
that the connection to the world still has been relying on four foreign groups
with global networks, including TNT, UPS, DHL and FedEx.
Luong Ngoc Hai, General Director of ViettelPost, believes that not many powerful
foreign groups would arrive in Vietnam after January 2012, because the big
service providers, interested in the Vietnamese market, have arrived here
He has also revealed that some foreign companies have suggested cooperation, or
asked to buy ViettelPost’s stakes, but no affair has succeeded. The problem is
that the foreign partners want to hold the majority of shares, while ViettelPost
does not want this.
Domestic firms struggle to retain clients
Earlier this year, Japanese Yamoto sent its staff to Vietnam to learn about the
Vietnamese market. Most recently, at the extraordinary shareholder’s meeting of
TTC Express (Tin Thanh), the shareholders approved the plan on transferring 70
percent of stakes of big shareholders to three investors, including Gia Ly
Company, Singaporean KLB and Hong Kong’s Kerry Integrated Logistics. Tin Thanh
is reportedly following legal procedures to legalize the stake transfer to the
When asked if the cooperation of Tin Thanh with the powerful foreign partners
would generate a hard pressure on domestic firms, Hai said this would certainly
a big challenge for domestic firms. However, he said the challenges would prompt
domestic firms to struggle to retain their clients.
Source: Buu Dien