Impact, Response, and Opportunities in Vietnam and Indonesia


On the 11th of June, our team joined forced with Dezan Shira & Associates to throw a webinar titled “COVID-19: Impact, Response, And Opportunities in Vietnam and Indonesia.

Throughout the event, we discussed how COVID impacted the Indonesian market and Vietnam, comparing stats like the total number of COVID-cases, how both governments reacted, what incentives were introduced, projections of GDP growth, and where do we see investment opportunities.

The Indonesian Market During COVID19

As of the 09th of June, Indonesia had 33,076 COVID cases, about 1000 new cases every day, and roughly 1,900 deaths. The consequences of that have impacts on both the everyday lives of local people and the growth of the economy. To address the matter, the Indonesian government implemented a PSBB which translates as a Large Scale Social Restriction, postponed the regional elections, suspended the Indonesian court, and enforced travel restrictions. All those measures have a significant impact on the GDP growth so the government slashed their forecast from 5 to 2.5% growth in 2020. The projected growth positions Indonesia somehow in the middle of what other countries are projecting in the region.

Consequences of COVID-19 in Indonesia

At the same time, the Indonesian government introduced several stimulus packages mainly focused on the healthcare system and businesses that have a risk of bankruptcy alongside people who have been through layoffs. Last but not least, there have been tax breaks and incentives on corporate income and imports.

Where Dezan Shira sees investment opportunities?

E-Commerce – as it’s expected to be worth $130B by 2025 and such companies are experiencing considerable traction even during COVID19.

Fintech: Digital payments are on the rise despite less private and public funding.

E-Learning: Educational institutions will be adopting online courses, this sector is expected to grow substantially. A good example is Ruangguru, app that provides game-like videos and practice tests for students of various ages, in subjects from math and science to world history.

Healthcare: This industry is expected to grow substantially in Indonesia, also after Covid-19. The country’s policy to sign more FTA will help in its expansion.
Supply chain diversification – the trade wars between China and the US have forced a lot of businesses to relocate to Southeast Asia and some of them are considering Indonesia.

The Vietnamese Market During COVID-19:

As of the 09th of June, Vietnam has experienced only 328 cases, 0 deaths and about 298 recovered, an incredible result not only in Southeast Asia but on a global level. Vietnam’s experience from SARS in 2003 played a crucial role in the fast recovery followed by a ‘low-cost’ strategy of testing those in isolation instead of conducting the expensive large-scale screening.

Although the country recovered better than many other markets, the economy is projected to reach 3.8% GDP growth, which is the lowest in a decade. For comparison purposes, the same quarter in 2019 had 6.8% GDP growth. Foreign Direct Investment decreased down to 17% as well causing almost 35,000 businesses to bankrupt.

Despite all that the country remains one of the most attractive markets for investment opportunities in Southeast Asia.

Vietnam Demographic and Key Driver

Where Dezan Shira sees investment opportunities?

Manufacturing – the sector is the largest recipient of FDI in consecutive years because the labor cost is half of that in China, yet the population is more than 96 million.

Education – the government is easing regulations in the education sector, attracting more FDI. At the same time, the population is young and wealth is increasing.

F&B taste is changing, there is an increasing demand for quality and food safety

E-commerce – banks are slashing online transaction fees, plus huge internet penetration and mobile usage

Retail – Vietnamese people are getting comfortable with, and seek high-quality products

Tourism – Vietnam is perceived as a safe country, especially around the COVID19 situation. As a result, the tourism sector is expected to recover fast.

Last but not least, Dezan Shira shared several prioritized sectors by the local government. Foreign investors may consider investing in Vietnam to take advantage of the following sectors:

– High, advanced, and environmentally-friendly technologies, such as clean and renewable energy

– Medical equipment production and high-quality healthcare services

– Agri-tech and production

*To watch the entire webinar click here.
**If you need our help expanding to Indonesia or Vietnam click here to book a meeting with our in-house experts.