By Gliceria N. Cademia / Trade and Industry Development Specialist / DTI’s Export Marketing Bureau
THE Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI) recently held an information session for the franchising sector at the DTI International Building in Makati City to prepare them for an Outbound Business Matching Mission in Vietnam in June. The event was attended by members of the Association of Filipino Franchisors Inc., the Philippine Franchise Association (PFA) and staff of the EMB-Services Division (SD).
Vu Viet Nga, trade counselor of the Vietnam Trade Office, made a presentation on the franchising market in Vietnam to familiarize Filipino exporters and aspiring exporters.
She said Philippine franchisors are encouraged to put up franchises in Vietnam, especially since this concept is quite new in that country. Traditionally, the Vietnamese do not want to share business and business knowledge.
She said there are no restrictions for franchising in Vietnam. The only requirement for a license is a dossier to be registered with the Vietnam Ministry of Industry and Trade or to the local governments’ DTI.
She described Vietnam as open for investment with favorable investment incentives and exemptions on income tax, land lease and import duties. Overall investment policy is lax, with foreign investors given a maximum share of 68-percent ownership.
She said there are supermarkets, but no big malls, in Vietnam. The Vietnamese prefer health and spa services, explore new things and love buying imported processed food. Millennials traveling to Thailand and Malaysia bring imported products from these countries.
Vietnam is one of the world’s biggest exporters of seafood, rice, Robusta coffee, rubber, cashew, pepper, textile and garments, and footwear. Like the Philippines, Vietnam enjoys benefits of economic integration and has made dramatic steps in the integration process over the past 20 years. It generated a revenue of $5.4 billion in 1995, increasing to $165 billion in 2015.
The Philippines has established 65 projects in Vietnam, amounting to $284 million, as of 2013. The companies include United Laboratories, San Miguel Corp., Universal Robina Corp., Oishi, Manila Water and Jollibee.
EMB-SD Chief Maria Teresa Loring clarified definitions of product and service sectors. She differentiated the service-sector and product-sector promotion. She said the World Trade Organization classifies franchising under distribution services together with retailing and wholesaling. A franchisor that establishes a branch in another country is considered an exporter.
The information session was also attended by EMB Assistant Director Anthony Rivera, who give a brief description of EMB’s programs and services. He said the EMB is under the Industry Promotion Group of the DTI, along with the Center for International Trade Expositions and Missions, Board of Investments, Bureau of Domestic Trade and Promotion and Philippine Trade Training Center. The EMB promotes products and services in the global value chain. It conducts business matching, capacity building, marketing and promotion, and market awareness activities, among others.