Diving and Surfing Services – Research Analysis in Vietnam

Analyze Diving and Surfing Market in Vietnam by using Porter’s Five Forces

Analyze Real conditions in Vietnam by using Porter’s Five Forces

a. Market place and analysis

Nowadays, Vietnam has known as an attractive destination for travelers over the world. The Telegraph website quoted a new report from the World Tourism Organization (UNWTO) as the 10 fastest growing travel destinations in the world in 2017, with Vietnam ranked sixth[1]. In general, Vietnam has various cities that are potential in expanding and developing tourism especially marine tourism thanks to the weather and nature. According to the LA Times, peaceful beaches and low cost living have made Danang increasingly popular among global surfers.[2] There is no doubt that friendly locals and pristine beaches make it a destination in its own right. In other report, Da Nang was voted the world’s No. 1 Destination On The Rise For 2015 by TripAdvisor travellers and No. 43 on the New York Times’ list of 52 Places To Go In 2015 last month.[3]In the limitation of this project, we are going to concentrate on the business environment and tourism development in leisure sport, in particular diving and surfing services in Vietnam.

We could use a business analysis model of Porter’s Five Forces to get a better view of the industry, market place and create a suitable strategy to invest in Vietnam.

1. Competition in the industry

In fact, diving and paddle surfing activities have become popular in Nha Trang, Phan Thiet, Da Nang for several years. Although many surfing clubs have been established in there, it seems to be very expensive for local people and professional players. Moreover, it is hard to find a place to rent a surfboard. For example, to own a surfboard, you have to spend from 8,000,000 to 20,000,000 VND (320 to 800 euro approximately) depending on type. In addition, for surfing mature you need time to practice with a guide price of about 1200,000 VND (30 euro apx) per hour.[4] On these prices, for local people it seems to be expensive and for travelers they tend to consider. In contrast, Snorkeling is quite reasonable and acceptable for tourists. The cost for a 30 minute round trip is about 500,000 – 600,000 VND (200 to 240 euro apx). There is also additional service like photography for 200,000 VND (8 euro apx) for 10 photos.[5] There is a few numbers of competitors, equivalent products and services they offer in diving and paddle surfing services. Hence, we can assume that the competition in this industry is quite low and it depends on the prices and suppliers.

2. Potential of new entrants into the industry

Diving and paddle surfing services are quite expensive for the Vietnamese. Vietnam has not produced the equipment so the price of everything is high. They have to import from the kite, and the attached equipment such as control rod, pump, belt, life jacket is a protective vest, just keep floating, helmet, board… [6] For this sport, almost companies must import from abroad. Obviously, it is costly to operate for a small o new entrants. An industry with strong barriers to entry is an attractive factor for our company to invest in this market.

3. Power of suppliers

The number of suppliers in this industry is accountable and dependent because all products are imported. One of the biggest club and shop in this service is Jibe. Jibe’s is Vietnam’s first water sport center and surfing shop. At Jibe’s, you can find many types of water sports are gradually popular in Vietnam such as windsurfing, sailing, water skiing and especially kite surfing.[7] Fewer suppliers have been found in diving and paddle surfing industry in Vietnam so suppliers easily drive up the price of products and services.

4. Power of customers

Most surfers are foreigners however compared to several years ago; the number of players is increasing rapidly. More clubs and people are trying to encourage young Vietnamese to join the new club according to Vnexpress. [8]The number of customers and players is not sufficient to drive the prices of services. Most of them are foreign athletes who accept the prices are acceptable and even cheap.

5. Threat of substitute products.

It is clear that there are many activities and services that could be other options for visitors. For instance, water motorcycles and the renting service is about 250,000 – 300,000 VND (10 to 12 euro, apx) for the first half hour. In adventurous sports, this is the most popular service, available in most marine resorts.[9] However, these services bring different feelings and experiences for players and the substitution is fairly easy and of low cost, the power of our services can be weakened.

From five competitive forces, we conclude that in Vietnam the market for diving and paddle surfing has profitability and attractiveness because of low competition in the industry and weaken power of consumers.

b. Government and Policy

1. Activities

The 18th Mui Ne Fun Cup Windsurf took place on 17 and 18 February, 2017 at Jibe’s Beach, Phan Thiet City gathered many national and international athletes to compete[10]The contest will be occur once time per year by Jibe Club.

2. Government policy in international trade and investment


The existing investment regime in Vietnam came into effect on 1 July 2015 and is comprised of a Law on Enterprises (LOE) and a Law on Investment (LOI), which regulate both domestic and foreign investors, for the establishment and operation of corporations and investment in projects.

A foreign investor can invest in the Vietnamese market in several ways, including:

a. establishing a new enterprise (either a wholly foreign-owned enterprise (WFOE) or a joint venture company (JVC) between foreign investors (FIs) and local investors (LIs);

b. making capital contribution to or purchasing shares or equity capital in companies in Vietnam;

c. investing through a business cooperation contract (BCC) between FIs and LIs; and

d. investing in the form of a private-public partnership (PPP), using build-operate-transfer, build-transfer-operate or build-transfer contracts, mainly for infrastructure projects or provision of public services.[11]

In order to get more information, we should get more information in law of foreign investment in Vietnam, tourism law, investing law and be consulted carefully by various lawyers.

REFERENCES [1] https://dulich.vnexpress.net/tin-tuc/viet-nam/viet-nam-dung-thu-6-the-gioi-ve-toc-do-phat-trien-du-lich-3625564.html [2] https://vnexpress.net/tin-tuc/the-gioi/da-nang-me-hoac-cac-tay-luot-song-tay-2209956.html [3] https://www.straitstimes.com/lifestyle/travel/central-vietnam-is-new-action-central [4] https://dulich.vnexpress.net/tin-tuc/dau-chan/cac-tro-choi-cam-giac-manh-tren-bien-2862021.html [5] https://dulich.vnexpress.net/tin-tuc/dau-chan/cac-tro-choi-cam-giac-manh-tren-bien-2862021.html [6] https://www.voatiengviet.com/a/sports-vietnam-kitesurfing-02-02-11-116534233/896090.html [7] https://www.citypassguide.com/vi/travel/phan-thiet/tieu-khien/kham-pha/trung-tam-the-thao-duoi-nuoc-jibes [8] https://vnexpress.net/tin-tuc/the-gioi/da-nang-me-hoac-cac-tay-luot-song-tay-2209956.html [9] https://dulich.vnexpress.net/tin-tuc/dau-chan/cac-tro-choi-cam-giac-manh-tren-bien-2862021.html [10] http://www.dulichbinhthuan.com.vn/article/view/khoi-dong-giai-luot-van-buom-mo-rong-mui-ne-2017-05022017-1292.html [11] https://thelawreviews.co.uk/chapter/1149297/vietnam [12] https://vnexpress.net/tin-tuc/the-gioi/da-nang-me-hoac-cac-tay-luot-song-tay-2209956.html [13] http://kul.vn/top-16-bai-bien-dep-nhat-chau-a-viet-nam-duoc-goi-ten-nhung-2-lan.html

Published by Thuy Tran

Specialist In International Education Service, Content Marketer, Photographer

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