Figures from the Ministry of Industry and Trade show that since 2007, more than 144 foreign franchises have been licensed in the country.

Market leaders include Lotteria (over 200 restaurants), KFC (over 140), Jollibee (over 40), Pizza Hut (over 40), Baskin Robbins and Domino’s Pizza.

Dinh Thi My Loan, chairwoman of the Vietnam Retailers Association, said that with its high growth rate and a population of 90 million – of whom 60 per cent are young consumers – and modern trade channels accounting for just 25 per cent of retail business, the country is an attractive retail market for foreign investors.

Sean Ngo, director of Vietnam Franchise Consulting, said franchises in Vietnam are forecast to increase substantially given the establishment of the AseanEconomic Community and the free trade agreements the country has signed.

The food and beverage industry has seen franchising develop strongly, especially in the fast food segment, he said.

Food consumption in the country is expected to grow by 61.6 per cent from 2012-17, while nearly half of household expenditure is on food and beverages, he said.

Nguyen Phi Van, founder of Retail and Franchise Asia, said franchising is a common strategy that companies choose when expanding internationally.

In the 10 leading food groups, only two still own more than half of their outlets.

In 2008, Burger King owned 12 per cent of its outlets, but the share fell to 0.4 per cent in 2013, while Subway does not own any outlet, she said.

Franchising has considerable potential in more industries, like education and healthcare.

But to be successful, franchisees need to make sure they have a good business plan and management, she said.

The biggest mistake Vietnamese franchisees make is that they spend a lot of money to buy the franchise but not to build a management team to run it, she said.

Other countries

Van said the franchise market in Vietnam is still in its infancy, and when foreign franchises come to the country, local firms can learn from them how to create their own franchises in the future.

Vietnamese companies could become global franchisers in the food industry, but their poor management prevents them from doing so, she said.

She and the other experts were speaking at the Vietnam International Retail and Franchise show held in Ho Chi Minh City last week.

Zhejiang Cainiao Supply Chain Management Co said on Monday that its long-term vision was to lower the proportion of logistics expenditures in the country’s gross domestic product from the current 16 per cent to 5 per cent.

Tong Wenhong, Cainiao’s chief executive officer, said the vision to lower China’s logistic cost was in line with her company’s business plan for the next 10 years.

“Logistics cost accounts for 6 per cent of GDP in the United States, which delivered 12.7 billion parcels last year. China delivered 20.6 billion parcels last year. A bigger scale can further reduce cost. That is why we believe it is possible to lower China’s logistics costs to 5 per cent of the country’s GDP,” she said on the sidelines of the “Global Smart Logistics Summit” held in Hangzhou, Zhejiang province.

“Once we have a unified standard in terms of geographic location, data and services, the logistics industry can develop in a smart way and all the industrial participants can share the infrastructure and resources with each other to improve efficiency and cut cost,” she said.

Jack Ma, executive chairman of Alibaba, said China’s logistics industry was expected to be delivering 300 million parcels a day 10 years from now.

Gao Hongfeng, head of the China Express Association, said: “With the rising cost in labour, it is impossible for the industry to expand further in the traditional way. It is high time to use smart solutions.”

This was stated by Deputy Prime Minister Dr Sonexay Siphandone during the launch of the fourth “China-South Asia Expo” and the 24th “China Kunming Import and Export Commodities Fair” on Sunday.

In his opening remarks, Sonexay said that although Laos did not share a border with the sea, based on its position at the centre of the five Greater Mekong Subregion countries, it was ready to give opportunities for foreign investors to implement their businesses in Laos.

“Following the common policy to attract foreign investment set by the government and given that the country is rich in natural resources, this will help increase the number of investors, especially Chinese businesses,” Sonexay said.

Citing Chinese investment in Laos, especially from Yunnan province, Sonexay said Laos and Yunnan had continued to increase their cooperation in trading and investment.

The volume of investment between the two governments reached US$882 million (Bt31 billion) in 2015.

Besides that, in the first three months of this year, 219 companies from Yunnan invested in Laos at a projected cost of $4 billion in investment terms, especially in special economic zones, the deputy prime minister said.

Sonexay said it was not surprising that Laos has become a targeted foreign market to attract huge investment from businesses in Yunnan.

“The cooperation between Laos and Yunnan province is part of the strategy on China’s ‘One Belt, One Road’. This initiative has been contributing importantly to Laos’ economic development,” he said.

During the expo, Sonexay held discussions with Chinese Vice Premier Wang Yang.

Wang said both sides could strengthen their high-level communication and exchanges in governing experience, pushing forward cooperation in industrial capacity, investment, economic cooperation zones and infrastructure and promoting local-level ties.

Laos and China established diplomatic relations in 1961. This year marks the 55th anniversary of the establishment of diplomatic relations between the two countries, in an auspicious year as Laos prepares to host the Asean chairmanship.

“Post-sale, gearing levels would fall, and the risks arising from the associate airlines would be shared with the new majority owner of AAC,” it said in a note.

“We expect 96 sen per share in special dividends to be declared post-Asia Aviation Capital’s disposal,” it said.

It has been reported that the airline was in the process of evaluating the proposed sale of AAC. Chief executive officer Tony Fernandes said AirAsia had appointed three banks to conduct the sale and there had been significant interest in AAC, with a ready offer in hand valued at about US$1 billion (Bt35 billion).

AAC is AirAsia’s wholly owned arm that leases aircraft to associate airlines in Thailand, Indonesia, the Philippines, India and Japan.

At the point of sale, AAC will have a portfolio of about 70 Airbus A320s, with aircraft and their associated debt novated from AirAsia.

CIMB Research said the best offer on the table so far valued AAC at $1 billion, although it believed that AirAsia was attempting to push the valuation even higher.

“The latter was calculated based on the market value of AAC’s expected portfolio of 70 aircraft, with the valuation boosted, in our view, by AirAsia’s large and attractively priced order book with Airbus, which AirAsia has promised to share with the future AAC owner,” it said.

The exact proportion of AAC to be sold has yet to be decided by AirAsia, but a buyer has offered to purchase an 80-per-cent stake for $800 million.

CIMB Research said AirAsia might sell a smaller stake if it could get a higher valuation.

“We suspect that the key criterion is the amount the two founders need to receive in special dividends to settle the 1 billion ringgit they would borrow to pay for the upcoming placement of 559 million new shares at 1.80 ringgit each,” it said.

The research house said that after the placement, the two founders would have a combined 32.4-per-cent stake in AirAsia.

“This means they will need AirAsia to pay at least 3.1 billion ringgit in special dividends (1 billion ringgit/32.4 per cent) to settle their loan.

“The $800-million proceeds from the potential sale of an 80-per-cent stake in AAC neatly matches the amount the founders need.

“This is the reason we think the entire proceeds will be paid as special dividends, representing 96 sen per share on enlarged post-placement base of 3.34 billion shares,” CIMB Research said.

The research house estimated that 1.5 billion to 1.7 billion ringgit in debts associated with the leasing business would be de-consolidated, reducing net gearing to below one time.

Also, the future funding of loss-making associates would be shared with the new AAC owner, since the associates will pay aircraft rents directly to AAC.

Of total, 261 billion kyats or approximately $22 million is expected for the hotel and tourism sector. Investment in the remaining 10 sectors is expected to reach 1.627 trillion kyats or $1.36 billion.

Between May 1994 and April 2016, local investment amounted to 11.6 trillion kyats or approximately $9.7 billion.

The 11 sectors under DICA’s radar include construction, electric power, industry, housing development, transportation, livestock and fisheries, mines, hotels and tourism, agriculture and services sectors.

Foreign investment into the 11 sectors is expected to reach $7.95 billion this fiscal year. Last year, FDI hit a new record high at $9.4 billion.

Tran Minh Dung announcement was made at a review late last week of the second one- month campaign commemorating World Intellectual Property Day his ministry held with support from BSA/The Software Alliance.

The efforts would encompass all areas of manufacturing, computer software and others, he said.

The first round of checks to find pirated software was made at several companies in the south, with an audit taskforce comprising inspectors from the Ministry of Culture, Sport and Tourism and Ministry of Public Securitys high-tech crime police going through 247 computers and detecting more than 500 unlicensed software.

It is estimated that the illegal software was worth around VND3 billion (US$136,000).

Reviewing the one-month campaign, the ministry reported that various awareness activities had been held during the month.

Dung said: “The campaign combines education and enforcement to increase awareness of the role and value of IP rights in the countrys development and strengthen the establishment, use, development and enforcement of IP rights.

“It makes sure that IP rights really become useful tools to promote science and technology development. It also builds awareness throughout the country about fulfilment of our IP-related international commitments, especially those under the Trans-Pacific Partnership.”

Also during the education month, many other activities were organised, including a business roundtable event in co-operation with the Vietnam Chamber of Commerce and Industry, which drew great interest from the private sector, copyright owners and their agents, and international organisations.

The first roundtable of its kind thoroughly discussed Vietnam’s IP commitments under the TPP to help businesses grasp the opportunities that come their way and be prepared to comply with al provisions.

MoST announced that in the first five months of this year, its inspectorate alone received 31 petitions for penalties from copyright owners.

Inspections found 25 entities and individuals showing signs of abusing industrial ownership rights, and fines worth VND856 million were imposed.

The infringements included unfair competition and abuse of patents, software solutions, trade marks, industrial designs and trade names.

According to statistics from the HCM City Real Estate Association, around 700 foreigners have bought apartments and houses.

Analysts said projects by prestigious developers are attracting plenty of foreign interest, adding that 30-35 per cent of visitors to property transaction floors in Districts 2 and 7 are foreigners, and they account for 5-8 per cent of successful transactions.

At the Phu My Hung Development Corporation’s floor in District 7, the number of foreigners continues to increase steadily.

The developer said this has been true since the end of last year and there has been a boom in the second quarter, with foreigners accounting for 10-15 per cent and nearly 30 per cent of transactions at the corporation’s current projects Le Jardin.

Le Jardin is the project with the biggest ratio of foreign buyers ever, company said.

Inone Yoshitaka of Japan said he chose Le Jardin because it is near international schools.

Furthermore, the development is a rare one in that it is set amid 4.5ha of parks, which promises to offer his family fresh air and peace and quiet. Shops in the ground floor would also make life convenient, he said.

Chinese customer We Feng Qi said the Phu My Hung City Centre is a modern urban area and is well managed with comprehensive infrastructure.

That was why he decided to buy house of the city centre.

Supply in HCM City’s real estate market is plentiful, but not many developments are able to meet the demands of foreigners, many of whom have lived in modern urban areas all over the world.

Le Jardin is unique in ensuring many positive factors at the same time, including situation in a modern urban area with convenient transportation, services next door and fresh air from 4.5ha of green space.

Its location is considered to be prime since Phu My Hung plans to build more office buildings in the near-by International Commercial and Financial District and The Crescent District. All the constructions will be wrapped up within three years.

The next selling phase of the project will come around at the end of this month, with Vietcombank and ACB offering guarantees to buyers.

With the launch of Le Jardin, Phu My Hung Development Corporation hopes many foreigners will choose their city centre as a place to rest their mind after a hard day at work.

Nearly 50 per cent of the 30,000 residents of Phu My Hung City Centre are foreigners.

The number clearly proves that the city centre is an ideal destination for them, meeting all of their requirements with respect to services, transport, healthcare, education, and entertainment just like in other urban areas in foreign countries they may have lived in.

Developers including Sun Can Co Ltd in Beijing and Zhongli Talesun Solar Co Ltd of Jiangsu province expressed their interest in joint ventures while being interviewed during a recent visit by Aseanjournalists to China, under the Exchanges of Production Capacity Cooperation.

Sun Can Co Ltd engineer, Chen Han, said the firm was keenly interested in countries that had flat land and a tropical climate.

However, the company will not invest in a country individually and hopes to operate joint ventures with local companies from both the private and state sectors.

“We are interested in investing in Laos. However, we need to have cooperation from local operators to join the feasibility study and also be business partners,” Sun Can Co Ltd CEO, Dr Zhihao Yao said.

An official of Zhongli Talesun Solar Co Ltd said, “It may be possible to invest in Laos and join the national power grid for exports to the neighbouring countries.”

Sun Can is a joint venture company established in 2012 in Beijing. Its core business includes system design, R&D, engineering, procurement and construction, along with technical services, and project investment and operation in solar thermal energy, including concentrated solar power, solar fuels, solar enhanced oil recovery, solar desalination and industrial solar heating.

Since its establishment, Sun Can has aimed to be a global leader in renewable energy and is determined to become the foremost solar energy company in China.

Sun Can provides various services to customers, including locating, system design, plus key equipment manufacture and supply.

Zhongli Talesun Solar was established in 2010 with an annual capacity of 2GW cells and 3GW modules, and has built a state-of-art, fully automated production line with all equipment from Italy, Germany and Japan. This enables it to be the world’s leading large-scale scientific and photovoltaic (PV) manufacturing company.

The company plays a leading role in the global PV industry chain extension and contributes and is committed to providing high quality and efficient products, services and support.

Experts warn that their business outlook will remain choppy over the coming 12 months, although firms with a strong presence in foreign growth markets could offset domestic constraints.

A quick look at the companies with financial years ending on March 31 showed that a number of retailers and food and beverage (F&B) service providers had mixed performances.

Retailer Courts Asia’s full-year net profit gained 16.8 per cent year on year to S$20.3 million (US$14.91 million), while Metro reported a 20.8 per cent drop in earnings to S$113.1 million.

In the F&B segment, Tung Lok Restaurants lifted full-year net profit by 6.4 per cent to S$611,000 while Old Chang Kee’s earnings dropped 5.9 per cent to S$5 million.

These uneven figures point to a fragile domestic market. Metro, which operates three department stores here and nine in Indonesia, suffered a 21.2 per cent year-on-year drop in turnover here to S$30.8 million in the three months to March 31, following the closure of Metro City Square and Metro Sengkang. Even for standout performer Courts Asia, full-year Singapore revenue – which is 65.6 per cent of the group’s total turnover – inched up only 0.1 per cent.

Courts’ business in Singapore, where it runs 15 stores, is resilient but sluggish, chief executive Terry O’Connor told The Straits Times.

“There is no hiding the fact that the local retail market is difficult. We did well last (financial) year but the growth came more from Malaysia, and we are just starting to grow in Indonesia,” he said.

“There are bright spots for us in the region, but in Singapore, conditions are tough due to the cocktail of labour issues, unjustifiably high rental costs and credit cooling.

“The impact of the property-cooling measures is also spilling over to the consumer demand for furniture and electronics associated with house moving.

“The long-term fundamentals of Singapore are still there, but for now, it’s about managing inventories and margins very carefully.”

Old Chang Kee, with 83 outlets here as at March 31, faced similar issues. Selling and distribution expenses rose around S$2.4 million or 8.5 per cent year on year in the 12 months, amounting to 40.9 per cent of full-year revenue.

The increase stemmed mainly from staff cost adjustments of around S$1.1 million amid the competitive labour market and higher rental expenses of around S$800,000, the company said.

Overall conditions for consumer-driven businesses are looking tough, said UOB economist Francis Tan. “Discretionary spending here is slowing alongside the economy…The staple products will be more resilient, but the luxury segment will certainly suffer,” Tan said.

This was reflected in the results of luxury watch retailers Cortina and The Hour Glass. Cortina’s full-year net profit plunged 44.9 per cent to S$8.4 million, while earnings at The Hour Glass slipped 9.7 per cent to S$52.3 million.

Tan added: “To hedge against the slowdown here, having good regional exposure is important.

“The developing economies around us are seeing stronger economic and wage growth, with a larger percentage of the young population getting into the middle class.”

CMC Markets analyst Margaret Yang agreed: “Jumbo Group is another good example.

“The move to open two new restaurants in Shanghai was behind its good quarterly results.”

But she noted there is no guarantee which market will be bullish, citing Jardine Cycle & Carriage’s 20 per cent drop in first-quarter net profit due to reduced earnings and the currency impact in Indonesia.

“Ultimately, the consumer business can be very unpredictable, because the demand will be reliant on not just economic conditions but also consumption patterns, and these factors are constantly changing,” Yang noted.

(US$1 = S$1.36 as of 6/13/2016 via oanda.com)

Dragon Law marketing manager Shermin Oh said they were only offering guided legal document drafting services.

Other services such as a help desk, legal support and having documents doubled checked by partner-lawyers are still limited to Hong Kong clients.

“In Malaysia, we’re offering our suite of legal documents for free, while any advice requested will be referred to our partner lawyers,” she said at the Rise start-up conference here.

Dragon Law client services director Chris Sykes said they had consulted Malaysian lawyers to ensure the service was compliant with local regulations and to prepare documents tailored to local needs.

“We provide documents specific to the country, as certain things like employment law is very specific to Malaysia.”

He confirmed that they had not approached the Malaysian Bar.

The Bar Council, which regulates lawyers and legal services, is known to be strict in ensuring the Legal Profession Act (LPA) 1976 is upheld.

Its chairman Steven Thiru said the Bar was aware of the start-up opening shop in Malaysia, adding that the matter was being studied.

Intellectual Property lawyer Foong Cheng Leong said it would be “interesting” to see what the Bar Council, especially its Legal Pro­fession Committee, would do.

“Dragon Law says it will refer those who use the template to a qualified lawyer. But they have to be careful as it may amount to touting for such lawyers,” he said.

Malaysian lawyer Lai Chee Hoe said it was always good to pay a courtesy call to the regulators.

The founder of legal start-up BurgieLaw said so far his had been the only start-up that approached the Council to ensure their service did not run foul of the LPA.

“I’m excited. In fact, I believe most legal start-up techs have one objective in common; that is, to make the legal market more accessible,” he said in an e-mail reply, when asked about the new legal player.

In a statement, Dragon Law chief executive officer Daniel Walker said the service was not meant to replace lawyers but make law firms more efficient by automating some duties, like document drafting.

Dragon Law launched in Hong Kong in January 2015, expanded to Singapore in June 2015 and began operating in Malaysia this month.