After rising to the top of Vietnam’s mom and baby products market in 2017, “what’s next” is the question that BiboMart’s founder and investors looked to answer.
They realized that the competitive advantage for future development would come from new technologies and creativity instead of traditional models with thousands of stores.
“Technology could lead us anywhere. Everything could change except customers”, said BiboMart founder Trinh Lan Phuong in the webinar “Future business models - Shaping tomorrow” co-organized by the China-ASEAN Business Alliance (CABA) and the Vietnam Association of Corporate Directors (VACD).
From a retail giant, Bibomart redefined its vision and transform it into a digital platform with a transparent supply chain that has unlimited ability to expand. It has focused on building technology solutions to create the best customer experience and help to solve partners’ problems.
Thanks to the transformation, Bibomart has not counted anyone as their rival but partners. Companies joining the platform have been supported to implement digital transformation and be ready to adapt to systematic changes.
“We make sustainable investments to provide stakeholders of our ecosystem long-term values”, said Phuong.
Ngo Dinh Duc, founder of Practical organization consulting development Corporation (POCD) said that those having good corporate governance always include business model transformation in the board’s discussion. That provides companies the ability to deal with crises and seize opportunities to make disruptive changes.
However, leadership capacity and digital culture are the two decisive factors. Leaders nowadays must be ready to change and even be pioneers in adopting new technologies. Internal communication and learning & development must be conducted actively, especially during the transformation.
Mastering information and data to be proactive on the growth journey
Hoang Manh Thang, Associate Partner of Ernst & Young Vietnam said that businesses should transform and consider a customer-centric strategy to adapt to changes in customer behavior and habits and seize opportunities. People nowadays want to have more new buying experiences by trying new products and new ways of shopping, especially through online platforms.
Sharing the same opinion, Director RHT DigiCapital (Singapore) Pang Ti Wee said that difficulties found when companies step out of their comfort zone couldn’t halt the development of technology in its tracks. Therefore, companies should open their minds to learn from experts and seize chances.
As a leader of a company that has successfully transformed, Phuong highlighted that digital transformation is just a support for companies to reach their goal.
“Don’t be afraid of or overrated technology. It is not a magic wand”, Phuong said and highlighted the importance of humans.
Especially, leaders of companies must have the ability to control internal changes and be sensitive to what is happening outside their organizations as well.
Transform towards sustainable business models
Philip Ommen, founder of Forte Hospitality Consulting (Singapore) in VACD and CABA’s event said that digital transformation should take center stage in the overall business strategy and ways of working for businesses.
Hoang Duc Hung, Founder and Chairman of CGS Vietnam Enterprise Governance Consultancy Limited noted that digital transformation is inevitable; however, companies should not conduct it because of the trend.
Transformation is inevitable, but companies should not conduct it just because of the trend. They should only start when getting ready in terms of people, technology, and finance.
Enterprises should create resilient business strategies that take sustainability as the foundation needs to begin, according to Vice president of EPS Singapore Syed Mubarak. He emphasized the environmental, social, and governance (ESG) criteria.
“Without sustainability, companies could only get short-term outcomes, not long-term values”, said Syed Mubarak.
Dang The Duc, Vice president of the Vietnam Independent Directors Association (VNIDA) shared that strong ESG practices can benefit companies and investors, linking to value creation in different ways.
In 2021, Vietnam ranks second in green bond issuance in ASEAN after Singapore, according to a report released by Climate Bonds Initiatives (CBI) and HSBC. In Vietnam alone, the total green, social, and sustainability bond (GSS) value hit $1.5 billion, nearly 5 times higher than $0.3 billion in 2020.
Also last year, BIM Land JSC successfully priced its inaugural USD bond for 5-year maturity at a 7.375 per cent coupon to be listed on the Singapore Stock Exchange. That is the transaction marking the first corporate green bond out of the country.
IFC, LeapFrog Investments, and the German Development Finance Institution invested $165 million in convertible Tier 2 bonds issued by HDBank to help increase lending to retail and small and medium enterprises (SMEs), including women-owned or -led ones.
The Ho Chi Minh Stock Exchange (HOSE) 2017 also introduced the Vietnam Sustainability Index (VNSI) to market participants and investors. This index includes companies having the highest scores in terms of their ESG-related performance such as FPT, Vinamilk, etc.
“Companies should see ESG as a long-term investment instead of an expense in order to bring benefits not only to the company but also to stakeholders and the whole society," said Duc.