While Vietnamese think big and do big, ranging from automobile production, shipbuilding, offshore fishing and seaport development to world’s leading exportation of agricultural products like rice, coffee, shrimp and catfish, foreigners come to Vietnam to repair household appliances and utilities for every household to collect small money. This reality has startled many, since Vietnamese are infinitely passionate for big things and make light of small things in their homeland and leave them to multinational corporations.
Fosse Electrical Appliances Company, an arm of US-based Fossco Inc in Florida, will invest US$6 million to develop infrastructure and personnel for its Bazan System in 64 Vietnamese provinces and cities.
Fosse Electrical Appliances Company and Total Technical Co., Ltd have signed a business cooperation agreement on this content.
Total Technical Co., Ltd’s system for repair and maintenance services of consumer electrical appliances was launched in 2005 in Hanoi but it did not leave any significant impression on the market. This system was still unknown even to the media. In late 2014, the Bazan Technical System (specialising in repair and maintenance of water, consumer electrical and electrical appliances) very publicly launched its services in Hanoi and Ho Chi Minh City. This system follows international practices.
Is repairing and maintaining water, electronic and electrical refrigeration appliances for families a big or small business? Failures, replacements and safety warranty of water and electric systems are troublesome and costly for every family. If their systems operate smoothly, each family will pay a very cheap cost of only VND1,000 a day for all home appliances, or VND365,000 a year (equivalent to one Afamily Card. The system will be profitable when its memberships reach 10,000.
The total change of the Bazan System is accrued from the involvement of Fosse Electrical Appliances Company, which has more than 12 years of experience and plans to expand its operations to Asian markets. It will invest US$1 million in Hanoi and Ho Chi Minh City to develop infrastructure and personnel in the first phase.
The big investment of an American company into a new struggling name shows a different outlook of a professional business. They do not necessarily spend their effort and time on investment procedures while easily embarking on business immediately with a local partner, who has ideas and initial steps although its effectiveness remains unclear. Vietnam, particularly in big cities, has a lot of companies and shops engaged in providing repairing and maintenance services for home appliances but one of them is professionally developed and has a famous reputation. Foreign investors not only pour their money but more importantly offer management skills and clear orientations which domestic companies fall short on.
According to its plan, after securing a strong foothold in Hanoi and Ho Chi Minh City, Total Technical Company will expand its operations nationwide.
The Foreign Investment Agency under the Ministry of Planning and Investment said that the country licensed 44 new FDI projects with a total registered capital of US$392 million as of January 22, up 85.5 percent against the same period of 2014. It also allowed 19 existing projects to increase their investment by US$271 million, up 45.8 percent year on year. It remains too early to be sure of a boom in FDI inflows in 2015 but the initial figures are very exciting.
Foreign investors are injecting their money into manufacturing and processing industries, followed by wholesaling and retailing, repairing and electric and water distribution. Vietnamese companies are leaving huge gaps in the domestic market, caused by long weaknesses, like agricultural processing and essential utilities for people.
According to Bloomberg newswire, Chinese people spent a lot in foreign countries during the 2015 Lunar New Year. An estimated 450,000 Chinese flew to Japan and they spent US$941-959 million. They purchased consumer electrical and electronic appliances like rice cookers, air purifiers, digital cameras, and most notably electronic toilets. Xinhua News Agency runs a headline "Japanese Toilet Seats Flush Away China-Made Rivals.”
This information is somewhat similar to that in Vietnam. Chinese companies are focusing more low-priced products but they forget that a majority of Chinese consumers start to care more about quality, not price. When Vietnamese businesses are busy thinking of big and long plans and programmes, Americans have come to repair utilities for their homes.
Vietnamese
