Private train venture routed in tourism
by Nguyen Van Cam
A private advertising company has bought the right to operate a local train route from HCM City to Nha Trang. Paying VND17 billion (more than US$1 million) per year for seven years, EVA will have the right to operate the whole train, including new interior design and new services such as haircut and facial massage.
The target passengers will be tourists. Although EVA will have the ability to fix fares, they will not exceed the ceilings imposed by the railway authorities.
Details in the local press are still sketchy and it is not clear if the premiums of the new fare schedule over the existing one will be enough for EVA to create a difference and still make some profit.
According to EVA representatives, the new train will be put into operation as early as June this year. Travellers prefer to go from HCM City to Nha Trang by train because they can spend the night on the train and get to work once they get to either destination.
This is the first time Viet Nam Railway agreed to a new mode of business but before that it had co-operated with other private companies who chartered several carriages on the Ha Noi – Lao Cai route.
These tourist companies can promote the trips better to get more passengers, offer better services and take good care of their passengers. However, this operation is different from what EVA is planning because tourist companies consider the chartered carriages as a means to get their customers to their tourist destinations.
They might not be thinking about profit and loss on the chartering of train carriages. So if EVA wants to be successful, it has to include other tourist activities in its plan as a comprehensive package to offer to passengers.
Coffee giant takes risk
After scoring some impressive success at branding, Trung Nguyen, a coffee producer and supplier, is expanding into retail with an ambitious plan.
This company has been on the front pages of the local press for the past several years as it successfully franchised its brand to coffee shops around the country.
Starting this April, Trung Nguyen will launch a new retail system, modelling on its franchised system of coffee shops. It is in various stages of negotiations with hundreds of shop owners around the country with the aim of turning them into convenient stores or groceries bearing the brand name of G-7 Mart owned by Trung Nguyen.
Its staff will help owners to re-design the shops, make them more professional, and help with goods display and point of sale advertising. Trung Nguyen will source goods for the shops and act as a wholesale distributor. Its ambition is to have 10,000 such shops by 2010 in a distribution system worth at least US$395 million.
Parallel to that, Trung Nguyen will build its own supermarkets, department stores and even Viet Town centres in several countries where there are a great number of overseas Vietnamese.
The selling pitch Trung Nguyen is employing is that it is trying to build a working distribution for Viet Nam before foreign distributors overwhelm the market. Already, Metro Cash&Carry has had phenomenal success in several cities throughout Viet Nam after launching its wholesale business.
The obstacles Trung Nguyen is facing are enormous, including the unique shopping habits of Vietnamese, the reluctance of major manufacturers to plunge into a new distribution system and loose ties with private shop owners.
But given that 90 per cent of goods in Viet Nam are distributed via traditional channels of small shops and markets, Trung Nguyen’s efforts are worth a try.
Used cars face tariffs
The debate on used car imports has not subsided although the Government has officially allowed such imports starting May this year. Officials from the Ministry of Industry have publicly opposed the idea, saying that used car imports will lead to more traffic accidents, traffic bottlenecks and more pollution.
They said it would be difficult to control the quality of used cars to ensure that they are less than five years old. Meanwhile Trade Ministry officials said used car imports were allowed because of the pressure of trade partners during WTO accession negotiations.
They also argued that allowing the import of used cars would force car prices in Viet Nam to drop. Deputy Minister of Industry Dang Huu Hao said this pressure is non-ex istent because he has not been aware of such requests from any countries.
Now the debate leads to how to restrict used car imports with proposals including the imposition of import quotas, the use of absolute tax rates, which means taxable amounts do not have to be based on the value of imported cars, and other technical requirements.
For consumers who have had to endure exorbitant car prices from local manufacturers, the import of used cars is only meaningful if the eventual price is much lower than new cars made in Viet Nam.
People predict that come May, the number of used cars imported under the new regulation is not many as ministries have not come to a consensus on taxing schemes and other basic issues necessary for importers to devise viable business plans.
Artist royalties unpaid
Isn’t it somewhat funny that an organisation responsible for copyrights and collecting royalties for music composers is under fire for violating these same rights?
Many musicians have complained that the Viet Nam Music Copyright Protection Centre violated their rights and took part in murky deals behind their back. The centre is now under formal investigation.
Musicians said the centre collected royalties for many of them who had never asked or authorised the centre to do so.
After collecting a sizeable sum of money from radio broadcasts and television shows, the centre failed to pass on the money to many musicians, saying that many of them changed their addresses or telephone numbers and many others live so far away… It is holding on to VND1.3 billion ()$82,000 as unpaid royalties. Meanwhile it is enjoying 25 per cent of the money collected as expenses. The centre has also signed a contract allowing a company to convert 10,000 songs into digital format without the permission from involved songwriters.
Well, establishing a centre to protect the copyright for musicians is a big step in the right direction. But lack of transparency will take it in the opposite direction. At least by introducing transparency, the centre might be able to win back musicians’ support; otherwise, another company will fill in the vacuum soon.
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