the road ahead vietnam logistics
TRANSCRIPT
The Road Ahead
Vietnam Logistics
JLL Vietnam
Dec 2020
1. Industrial Market & Domestic Consumption
2. Vietnam Warehouse Market Forecast
3. Supply Chain Network
Table of contents
Industrial Market &
Domestic Consumption
4
© 2020 Jones Lang LaSalle IP, Inc. All rights reserved.
0
10
20
30
40
2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20
Registered capital Implemented capital
Vietnam's FDI by year (USD billion)
Manufacturing
Wholesales and retail
trading
Electricity, gas, steam and
air conditioning supply
Others
Real estate activities
51%
12%
25%
7%
5%
Total Registered Capital by sectors
Source: Ministry of Planning and Investment – Foreign Investment Agency (FIA
Vietnam)
$8.6 bil.▼5% y-o-y
$15.7 bil.▼15% y-o-y
Thailand ChinaSingapore
$5.44 bil.34.7% total investment
$1.58 bil.10.1% total investment
$1.58 bil.10.1% total investment
Top 3 territories investing in Vietnam
Singapore Thailand China
51%
25%
12%
7%
5%
Southern Vietnam
Petrochemical Complex
Tire manufacturer Radian
Jinyu
Liquefied natural gas
(LNG) power plant
$4 bil.28.8% total investment
$1.38 bil.8.8% total investment
$300 mil.11.9% total investment
Top 3 projects investing in Vietnam
1H20 - Vietnam FDI
Vietnam l Industrial Market Snapshot
Southern Key Economic Zone
(SKEZ)
Central Key Economic Zone (CKEZ)
Northern Key Economic Zone (NKEZ)
Ha Noi *
Hai Phong *
Bac Ninh *
Hung Yen *
Hai Duong *Quang Ninh
Vinh Phuc
Map of Key Economic Zone (KEZ) in Vietnam
Thua Thien Hue *
Da Nang *
Quang Nam *
Quang Ngai*
Binh Dinh*
* Provinces covered in the report.
HCMC *
Dong Nai *
Ba Ria-Vung Tau *
Binh Duong *
Long An *
Binh Phuoc
Tien Giang
Tay Ninh
South Vietnam
North Vietnam
Total Ready-Built Factory (sqm) [3]
~ 1,600,000
Total leasable area (ha) [1]
9,371
Average land price
(sqm/lease term) [2]
$99
Occupancy rate (%)
72%
Average Net Rent (sqm/month)
$4.4
Occupancy rate (%)
93%
Total Ready-Built General
Warehouse (sqm)
~ 667,000
Average Net Rent
(sqm/month)
$3.9
Occupancy rate (%)
90%
*NOTE:
[1] The total leasable area of operating industrial parks at a given time according to the master plan.
[2] Net rent is exclusive of VAT and service charges
[3] Included properties within industrial parks only, which developed by both Industrial park developers and sub-developers.
Total Ready-Built Factory (sqm) [3]
~ 3,100,000
Total leasable area (ha) [1]
25,045
Average land price
(sqm/lease term) [2]
$106
Occupancy rate (%)
84%
Average Net Rent (sqm/month)
$4.4
Occupancy rate (%)
91%
Total Ready-Built General
Warehouse (sqm)
~ 2,320,000
Average Net Rent
(sqm/month)
$4.6
Occupancy rate (%)
90%
5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2010 2011 2012 2013 2014 2015 2016 2017
Manufacturing wage in USD/hour
Malaysia Indonesia Philippines Thailand Vietnam China
0
50
100
150
200
250
300
350
2010 2011 2012 2013 2014 2015 2016 2017
Ind
ex b
ased
in U
DS
cu
rren
cy (
Bas
e: 2
010
)
Industrial land price index
Jakarta HCMC Singapore Manila Kuala Lumpur Bangkok
Movement from China
Rising Labour Costs Increasing Land PricesShifting in the Industry
Sector
7
Vietnam has steadily gained share of US containerized import volumes over the last 15 years and until 2018
Country200
3
Country200
5
Country200
7
Country200
9
Country201
1
Country201
3
Country201
5
Country201
7
Country201
8
Vietnam 1% Belg
a 3% Vietnam #53% South Korea
2003 2005 2007 2009 2011 2013 2015 2017 2018
China 25%
17%
6%
4%
3%
3%
3%
2%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
China 31%
16%
5%
4%
3%
3%
3%
3%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
1%
China 37%
15%
5%
4%
3%
3%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
1%
China 36%
16%
4%
3%
3%
3%
3%
3%
3%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
China 35%
17%
3%
3%
3%
3%
2%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
China 36%
18%
4%
3%
3%
3%
3%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
China 35%
18%
4%
3%
3%
3%
3%
3%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
China 36%
17%
4%
4%
China 36%
18%
4%
3%
3%
3%
3%
3%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
EU EU EU EU EU EU EU EU EU
Brazil Brazil Brazil Brazil Japan South Korea Brazil India India
Japan Japan Japan Japan Brazil Japan India Brazil Brazil
Taiwan South Korea Taiwan South Korea South Korea Brazil South Korea South Kore
South Korea Taiwan South Korea Taiwan India India Colombia Vietnam Vietnam #5Thailand Colombia India Thailand Taiwan Taiwan Japan Japan 3%
3%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
Japan
Mexico Thailand Thailand Colombia Thailand Vietnam Taiwan Thailand Thailand
India India Colombia India Indonesia Thailand Vietnam Taiwan Taiwan
Colombia Mexico Indonesia Indonesia Vietnam Indonesia Thailand Indonesia Indonesia
Indonesia Indonesia Chile Chile Colombia Chile Indonesia Colombia Turkey
Chile Malaysia Costa Rica Vietnam Chile Colombia Chile Chile Chile
Costa Rica Chile Malaysia Costa Rica Malaysia Malaysia Mexico Turkey Colombia
Malaysia Australia Australia Malaysia Guatemala Guatemala Malaysia Malaysia Mexico
Australia Turkey Vietnam Guatemala Australia Costa Rica Guatemala Mexico Malaysia
Guatemala Costa Rica Guatemala Australia Costa Rica Mexico Turkey Guatemala Guatemala
Turkey Guatemala Turkey Mexico Mexico Turkey Australia Costa Rica Costa Rica
Honduras Honduras Mexico Honduras Turkey Australia Costa Rica Australia Honduras
Belgium 1% Vietnam Honduras Turkey Honduras Honduras Honduras Honduras Australia
Vietnam #20ium 1% Belgium 1% Belgium 1% Belgium 1% Belgium 1% Belgium 1% Belgium 1% Belgium 1%
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. 7
Country share of US containerized volumes
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In the first half of 2019 Vietnam gained some of China’s share of US containerizedimports
China -3.0%
Germany 3.2 3.3 4.6% 3.7% 3.7% 0.0%
Brazil 2.8 3.0 8.0% 3.3% 3.4% 0.1%
Korea, South 2.7 3.0 8.3% 3.2% 3.3% 0.1%
Vietnam 0.7%
Italy 2.6 2.7 4.3% 3.0% 3.0% 0.0%
Japan 2.4 2.4 -1.3% 2.8% 2.6% -0.1%
Thailand 2.2 2.5 13.6% 2.6% 2.8% 0.2%
Taiwan 2.1 2.3 8.0% 2.4% 2.5% 0.1%
Indonesia 1.9 2.0 3.7% 2.2% 2.2% 0.0%
Turkey 1.6 1.6 5.0% 1.8% 1.8% 0.0%
France 1.5 1.5 0.7% 1.8% 1.7% -0.1%
Spain 1.5 1.5 3.2% 1.7% 1.7% 0.0%
Chile 1.4 1.4 -2.1% 1.7% 1.6% -0.1%
Mexico 1.3 1.4 0.5% 1.6% 1.5% -0.1%
Malaysia 1.2 1.4 21.6% 1.4% 1.6% 0.2%
Colombia 1.1 1.5 29.4% 1.3% 1.6% 0.3%
Netherlands 1.1 1.1 -3.5% 1.3% 1.2% -0.1%
Guatemala 1.1 1.3 23.2% 1.3% 1.5% 0.2%
Costa Rica 0.9 1.0 2.2% 1.1% 1.1% 0.0%
Top 20 Total 70.4 72.4 2.8% 81.3% 80.4% -0.8%
China 31.3 29.8 -4.8% 36.1% 33.1% -3.0%
India 3.7 4.3 15.1% 4.3% 4.8% 0.5%
Vietnam 2.7 3.4 29.0% 3.1% 3.8% 0.7%
Million Metric Tons Share Change in Share
County H1-2018 H1-2019 Growth H1-2018 H1-2019 2019-2018
World 86.6 90.0 3.9%
Change in share of US containerized import volumes:
H1-2019 and H1-2018
The US-China trade war has led many brands to move manufacturing out of China and primarily to Vietnam
From China to.. # of companies
Vietnam 26
Taiwan 11
Thailand 8
Mexico 6
Japan 5
Cambodia 4
India 3
Malaysia 3
Philippines 3
Myanmar 3
USA 3
Bangladesh 2
South Korea 1
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. 9
Source: Nomura
10
Vietnam
Total 4 existing factories in Vietnam
Latest expansion in 2019:
• Size: 10ha land
• Location: Viglacera IP
Operating multi factories in 3 IPs in
Vietnam since 2018
Latest transaction in 2019:
• Size: 4ha land
• Location: Saigon Hi-Tech Park
Biggest FDI investor in Vietnam with total
registered capital of US$17B
Meeting with Hoa Binh Province authority
for discussion of 1300ha land in 9/2019
A shared industrial platform between
international fund and local developer
Presence in 7 cities with over 380 ha
current land bank since 2018
Biggest local e-commerce group in Vietnam
Largest transaction in 2019:
• Size: >90,000sqm warehouse
• Location: HCMC
First local car manufacturer of Vietnam
Latest transaction in June 2019:
• Size: 50ha of land
• Location: Hai Phong Province
Strong Growth
11
Accelerating structural shifts
E-COMMERCE
STRATEGIES
ADOPTION
Some outsourced
their online
businesses
PHYSICAL STORE
Contactless buying
initiatives, e.g. self-
checkout and
cashless payment
options.
ONLINE SALE
form new digital
habits, and propel
the surge in
online shopping
Vietnam to skip the stage of Mega-mall & move to Omni Channel
The Robust Growth of E-commerce
Source: Statista Digital Market Outlook, Ecommerce report 2019
54.7million
56.7% $2,709million
$49.5
Source: Oxford Economics Source: Deloitte report February 2019- Retail in Vietnam
Notes:
• Online conversion rates: the proportion of visits to online websites that
have been converted to sales.
• *Online conversion index: represents a market’s performance relative
to the overall average conversion rate across all six markets, which
has been assigned a reference value of 1.
NUMBER OF
PEOPLE
PURCHASING VIA
ECOMMERCE
ECOMMERCE
PENETRATION (# OF
PURCHASERS VS
TOTAL POPULATION
TOTAL REVENUE IN
VIETNAM’S
ECOMMERCE 2019
AVERAGE REVENUE
PER USER
1.3
1.1
1.1
0.9
0.8
0.8
0 0.2 0.4 0.6 0.8 1 1.2 1.4
Vietnam
Indonesia
Singapore
Malaysia
Thailand
Philippines
Online conversion index* across six markets in
SEA
37% 39% 41% 44% 47% 50% 51% 52%
0%
20%
40%
60%
80%
100%
2012 2013 2014 2015 2016 2017 2018 2019
Percentage of Internet users in Population
Internet users Non-internet users
Online Conversion RatesInternet Users Shopping Behaviours
13
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0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2015 2016 2017 2018 2019 2020F
Projected Vietnam e-commerce revenue per year (USD billion)
Vietnam currently is one of the fastest growing e-commerce markets in South East Asia. Revenues generated
in the e-commerce segment were estimated at USD 4.07 billion in 2015, increasing to USD 6.2 billion in 2017.
By 2020, the market is projected to reach approximately USD 13 billion, double the 2017 level.
The Robust Growth of E-commerce
Vietnam Warehouse
Market Forecast
1. What does an End to End Supply Chain look like?
PLANNING
ForecastDemand
Plan the Supply
DISTRIBUTORS
STORING
STORING
PLANTING
HARVESTING
PACKAGING
PALLETIZING
& STORING
PACKAGING
Example: The Pineapple Supply Chain
MANUFACTURERMANAGING
(Seedlings)
RETAILER
STORING
STORING
SELLING
880.000Total GFA in Northern Region
Sqm 3.033.000Total GFA in Southern Region
Sqm
Total Warehouse Area (GFA, sqm)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
Bac Ninh Hanoi Hai Phong Hai Duong Hung Yen Binh Duong Dong Nai HCMC Long An
Nothern provinces/cities Southern provinces/cities
Average Net RentFor General warehouse (1H20)
*Factory rent figure covers those projects having this information publicly available only
Source: JLL Research
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Bac Ninh Hanoi Hai Phong Hai Duong Hung Yen Binh Duong Dong Nai HCMC Long An
Nothern provinces/cities Southern provinces/cities
US
D/s
qm
/mo
nth
3.9Northern Region – average rent
USD.sqm/month 3.6Southern Region – average rent
USD.sqm/month
Evolving Logisticss Market
Vietnam Warehouse Market
Source: JLL Research
Note:
• Price/rent comparisons above are for the same product types.
• The above chart is based on assumption made and is not to scale.
• We have adjusted industrial land for Vietnam slightly lower. The rational was that Industrial land offerings in Vietnam to date are not as sophisticated.
Price of factory/warehouse is comparatively higher due to limited available supply and high demand for these two product types.
VIETNAM
Factory
MARKET SOPHISTICATION
PR
ICE
VIETNAM
Industrial land
CHINA (YDR)
Industrial land
CHINA (YDR)
Warehouse
VIETNAM
Warehouse
THAILAND
Factory
THAILAND
Industrial land
THAILAND
Warehouse
SINGAPORE
Industrial land
SINGAPORE
Factory
CHINA (YDR)
Factory
SINGAPORE
Warehouse
The Supply Chain
Efficiency
2. What is Supply Chain Efficiency?
SOURCING MANUFACTURING DISTRIBUTING CustomerRETAILING
Corporates with a physical goods Supply Chain and their warehouses is the primary focus area for JLL SCC
The End to End Supply Chain
SCSTRATEGY
SC PLANNING
Supply Chain Cost Efficiency helps manufacturers optimize the flow of goods from …
transforming raw materials into final products to … delivering to the customer
*Establish, Inc: Logisticss Cost and Service
Report
Transportation
50%
Inventory
Carrying
22%Labour
10%
Customer
Service
8%Rent
4%
Admin
3%
Supplies
2%Other
1%
Real Estate
accounts for <5%
Warehousing
Typical Logisticss Costs (in-house mgmt)*
Supply Chain Costs
3. Why does SCC matter?
Supply Chain Costs comprise majority of Logisticss costs for manufacturers, with warehouse rents
typical
accounting for less than 5%
10
Click&Deliver from DC
(retailer /manufacturer/marketplace)
Replenish
Retailer/3PL DC
Click&Collect from store/3rd partystore
Replenish
Manufacturer Warehouse
Manufacturer forecasts end consumer demand
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Trang Bui
Head of Market Transactions
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