Recovering after the epidemic: Which industry goes fast, which industry goes slow?
Government leader orders continuation of anti-epidemic measures | |
Supporting business: being provided “breathing machine” but lacking “oxygen” | |
Vietnam a "role model" against the Covid-19 epidemic |
There are still businesses seizing the opportunity to export in the epidemic. In the photo: Hoa Sen Group exports a shipment of 10,000 tons of corrugated iron to Mexico in early April 2020. |
Digital technology gets benefits
At the beginning of February, when the Covid-19 epidemic broke out in Vietnam, experts of SSI Securities Company said that among twenty-three industries, pharmaceuticals, information technology, electricity and water enterprises will bepositively affected, the rest will be neutral or negative. The reason is that the demand of the market in the short term for pharmaceutical products are increasing, information technology is even more supported when many businesses, people and organizations apply in the context of social isolation. Meanwhile, in the opposite direction, trade activities stalled, countries temporarily closed borders, causing businesses of tourism, services, agriculture, forestry, fishery, manufacturing and processing to beseriously affected.
After three months of Covid-19, with positive epidemic prevention measures, as well as supportive policies from the Government and many related organizations, the disease was basically controlled, many businesses found opportunities for production and business, planning to strongly recover after the epidemic.
According to experts and enterprises, the "bright spot" of the manufacturing and processing industry is pharmaceutical enterprises. The data shows that consumption of the industry in the first quarter of 2020 increased by 27.3% over the same period last year.
Contrary to the garment industry, textile companies have a more positive situation with consumption volume growth of 13% in the first quarter. With 60% of raw materials imported from China, the country's factories had to close in the first quarter leading to a sharp increase in domestic demand for fabrics.
Moreover, the sudden increase in demand for masks makes non-woven fabric used to produce this product also be strongly consumed. Therefore, it is forecasted that these industries will continue to benefit in the near future.
However, the areas that benefit most from this "undesirable" opportunity are information technology and the fields of application of digital technology.
Typically, at FPT Group, despite the impact of Covid-19, in the first quarter, profit after tax and profit after tax of shareholders of the parent company reached VND937 billion and VND747 billion, respectively up 18% and 19.3% over the same period last year.
Talking about the post-epidemic opportunity at the recent Annual General Meeting, FPT General Director Nguyen Van Khoa said that the Covid-19 epidemic is opening up a lot of opportunities for FPT from customer behavior, to the trend of digital transformation of businesses. "Made by FPT" products are also well received by customers in the form of service hiring, from bidding, building on demand systems to ready-made and rental systems. Therefore, the leaders of this group believe that FPT will seize the maximum opportunities.
In particular, with banking, digital technology is also helping this industry overcome difficulties in the context of low credit and deposit growth. Previously, the mobile banking application of banks only had some basic transactions, but now, the applications have met most of the transaction and payment needs such as: savings, online loans, payment of essential bills, sending gifts, buying vouchers.
As a result, the number of transactions via digital banks has increased significantly, such as at VPBank, the end of the first quarter, the value of transactions via digital channels increased by 25% and number of transactions increased by 50% over the same period. This not only helps banks maintain revenue from the service sector, but also give an opportunity to change consumer habits, increase revenue in the "post-Covid 19" period.
Calculating the appropriate route
According to Assoc. Dr To Trung Thanh, National Economics University, the Government should take drastic measures and proactively coordinate policies to maintain the total supply and demand of the economy, ensure resources to increase long-term growth. Moreover, the Government should select the right area to focus on creating the best conditions for economic recovery.According to experts, the economic recovery needs to calculate the roadmap for recovery of different sectors at anappropriate time, with a reasonable level and plan, even taking into account the "living with epidemic", byboth maintaining the economy and preventing epidemics.
Specifically, under the impact of the Covid-19 epidemic, foreign direct investment (FDI) activities are being affected, when the epidemic movements in the world are still more complicated. Therefore, the FDI sector will recover more slowly than the domestic sector. In addition, there are differences between domestic enterprises and private enterprises. Experts assess that the private sector, especially small and medium-sized enterprises, due to theirsmall size andflexibility, may recover faster and better adapt to external shocks. Therefore, with this business sector, Assoc. Dr. To Trung Thanh said that businesses need to restructure, as well as look for new sources to ensure flexibility and resilience. Businesses also need to understand the trends of the market, invest in target customers and predict behavior, find new marketing and sales options to meet the needs of buyers.
Analysisingseparately by each industry, many experts said that the processing and manufacturing industry still faces many difficulties when the world disease situation is still complicated. This is evidenced by the sharp drop in the Purchasing Managers' Index from 49 in February to 41.9 in March amid domestic manufacturers facing both supply chain disruptions and shortages of new orders as global demand weakens.
Along with that, the main export industries still face many difficulties. According to the Ministry of Industry and Trade, major export sectors such as textiles, footwear, wood-products may reduce production by up to 70% in the second quarter compared to the first quarter due to cutting orders from major export markets such as the EU and USA are still in blockade due to Covid-19.
However, this should still be a priority area when orders are placed. According to experts, after the Covid-19 epidemic, many businesses and large corporations will shift production from China to other countries, so Vietnam needs to maintain exportsto take advantage ofthattrend.
With industries such as passenger transport, logistics, aviation, tourism, the recovery will also be slower and must be based on the situation of each locality.
Firstly, priority should be given to the domestic market. Therefore, businesses proposed that the Government should issue a specific recovery roadmap, as well as many effective support methods because these are the sectors that suffer the most damage. In particular, with industries such as tourism, aviation or manufacturing processing deeply involved in the global value chain, reopening depends largely on the worldwide epidemic.
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