Market Assessment

GTZ and Swisscontact Viet Nam - BDS Market Assessment 2001

    In 2001-2002, GTZ and Swisscontact jointly conducted a market assessment of 14 business service markets for small and medium enterprises with the aim of informing program design and implementation decisions in their individual programs. Vietnam was in transition from a wholly state controlled economy to allowing more private sector activity. Using a modified Usage, Attitude, Image market study format, GTZ and Swisscontact surveyed 1,211 enterprises in 6 urban areas from three sectors: trading, services, and manufacturing. The survey was followed by 20 focus group discussions with selected survey respondents. GTZ and Swisscontact used international consultants to advise on the study approach and analyze the data, while a local company conducted the research. The cost for the local research was US$40,000; the cost for international consultants was US$27,000.

    Methods for info gathering
    SE Survey, Focus Group Discussions, Usage Attitude Image Market Study, Quantitative, Qualitative

    Summary of results
    The findings showed that most SMEs have purchased at least one BDS. Overall the market size from private SMEs in the 6 areas studied was VND400 billion (USD27 million) over one year. Market penetration varied from a high of 50% for Internet information to a low of 2% for management consulting services. The outlook for market growth is positive. BDS markets are generally young but growth is accelerating.

    The study found that the most severe constraints to market growth were frequently low quality services and a lack of appropriate service products on the supply side. An entrepreneurial culture that discourages outsourcing services was a significant constraint to the growth of demand. The study identified the following other key constraints to market growth: poor service marketing, SME over-reliance on friends and colleagues for information, and government control of some markets. Market strengths included strong economic growth fueling demand for BDS, growing demand for many services, SME high basic awareness of many services, and dynamic private sector markets in Hanoi and HCMC.

    Unmet demand was found in many BDS markets. The service markets with the highest potential for growth were business information, IT related services and market access related services. The study also identified several priority areas for policy change including leveling the playing field between state-owned and private BDS providers and increasing competition in government controlled BDS markets.

    See also Swisscontact, Vietnam market research which includes additional, general and subsector-based research conducted by Swisscontact only.

    Associated Activities and Documents
    Market Assessment
    »GTZ MPDF Viet Nam - Quality Management Services Analysis, 2003
    Programme Design
    »Commercial training products design by OLA for MPDF, 2000
    »Swisscontact SME Promotion Viet Nam, 2002
    »Advocacy for a better Enabling Environment for BDS in Vietnam, GTZ 2004-5