How the top 10 companies in Vietnam make their billions?
The top 10 private companies in Vietnam all earned revenue of +1 billion USD each in 2019. How do they make their billions?
This question has stuck in my head as I came across this exciting visualization from Visual Capitalist on revenue streams of the big five tech companies in the US. Looking at the break down of revenue from each of the companies, by product/service lines and geographic region, I wonder how the picture would look like for top companies in my country — Vietnam.
With that question in mind, I focus on the top 10 private companies in Vietnam to analyze how their revenue breakdown. For the rest of this article, I will describe the process and exciting findings from this analysis step by step:
- Identify the top 10 companies
- 2019: revenue breakdown
- 2014: a look back
- 2020: prediction
The top 10
For this analysis, I use the list of top 10 private companies in Vietnam for 2019 ranked by VNR500.
Why VNR500? I choose to use this list since revenue was the first criterion in the compiling of this list according to their ranking method.
Why top 10 private companies, not the “top 10” largest companies in Vietnam? VNR500 does provide a list of top 10 largest companies in Vietnam, but I decided not to use this list for two main reasons: (1) 8 out of 10 companies in this list are state-owned companies in, considered by the government, critical industries (i.e., energy, telecommunication, and financial service); and (2) 9 out of 10 companies in this list do not public its financial report, leading to difficulties in collecting data and only unofficial number are available from different news outlets.
With that, the top 10 private companies in Vietnam that we will “dissect” their 2019 revenue, are:
Top 10 Vietnamese private companies by VNR500, and their revenue in 2019 (in trillion VND)
How big are these ten companies? To put things in perspective, I looked at the combined 2019 revenue from this group of companies as a percentage of Vietnam GDP in the same year (WorldBank data).
The combined revenue of the top 10 companies as percentages of Vietnam GDP in 2019.
In 2019, the top 10 private companies in Vietnam contributed ~11% to the country’s GDP in 2019.
Is that a lot? Considering the big five tech companies (Amazon, Apple, Alphabet, Facebook, and Microsoft) make $990B revenue, which equivalent to 4% of USA GDP ($21.43 trillion) in 2019, what do you think?
2019: Revenue breakdown
This is how the revenue breakdown of the top 10 private companies in Vietnam by industry (product/service type):
Breakdown of 2019 revenue from the top 10 private companies in Vietnam
Please note that for the DOJI group, the consolidated financial statement of the group was not shared with the public. For this analysis, I assumed all revenues of the group are related to its core business line — Gold, silver, and gem trading. However, it’s known that the DOJI group had started a business in real estate since 2019, even though no further information regarding the revenue of this business line can be found.
If we look at 2019 revenue combined by the top 10 companies breakdown by industry, retail, and manufacturing are the leading industry with the contribution of ~130 trillion VND each. Looking at this chart, I wonder how this breakdown looks like five years ago, for the top 10 companies, and that’s what we will explore in the next section.
Breakdown of 2019 combined revenue from the top 10 private companies in Vietnam
2014: A look back
Looking back five years ago, the year of 2014, how things are different from 2019:
Top 10 private companies in Vietnam in 2014 vs. 2019
- Vietnam GDP has grown by ~1.5x between 2014–2019
- Combined revenue from the top 10 companies, as a percentage of GDP, has grown ~2x, from ~6% in 2014 ~11% in 2019.
- Only five companies in the top 10 in 2014 are on the list of 2019.
- Four companies in the 2014 list are commercial banks.
As a result, you can see how the breakdown of the combined revenue from the top 10 has changed during these 5 years.
Retail took over the 1st place, growing ~6x within five years (note that FPT — one of the dominant players in electronic device retailer made the list in 2014 but dropped out by 2019). Financial service, ranking 1st place in 2014, dropped to 5th place since only two commercial banks are on the list in 2019, instead of four in 2014. Real estate has held its position as well as the percentage of combined revenue throughout the years. Telecommunication and technology solutions are no longer in the mix for 2019 due to the exit of FPT Group from the top 10.
Breakdown of combined revenue from the top 10 private companies in 2014 vs. 2019
Here are my predictions for 2020 top 10 list:
Vietjet — Aviation: since the pandemic profoundly impacts the airline industry, it will not be surprising if Vietjet’ s position drops, or event out of the list.
VinGroup, MWG, and Masan Group — Retails: in 2019, Masan acquired the retail business from VinGroup, and this will impact the position of not just two but three companies in the list.
- VinGroup: the retail business brought ~30 trillion VND of revenue for the company in 2019.
- MWG: 2019 revenue of MWG is ~103 trillion VND, which is ~27 trillion VND lower than that of VinGroup. Now that VinGroup no longer has its retail business revenue for 2020, maybe that would be enough for MWG to claim the 1st position in the list.
- Masan: with ownership of the entire retail business from VinGroup, which brought as nearly much as revenue as the Masan group as a whole in 2019, this may be the push for Masan to get into the top 5 of 2020. Of course, with the COVID-19 in Vietnam, not sure how the impact on the retail market will look like in number, but we should see a significant increase in revenue for Masan this year.
What do you think? What are your predictions for the top 10 private companies in Vietnam 2020? Feel free to share your thought in the comment section.
Update on September 18th, 2020, a race bar chart of the top 10 private companies in Vietnam between 2014–2019. Credit to Pratap article for great instruction of how to make this chart using Python.
Top 10 private companies in Vietnam (by VNR500) between 2014–2019 with their revenue and primary business
Source: please refer to my spreadsheet for further detail