group assignment macroeconomics

Grab first appeared in Vietnam in 2014and brought a phenomenon of motorbike taxi technology leading to a series of otherapplications such as Gojek, Loship, Baemin, and so on.This report

FPT UNIVERSITY- CAMPUS HO CHI MINH

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GROUP ASSIGNMENT

Macroeconomics

Course: ECO121 Lecturer: Nguyễn Thanh Tùng

Class: MKT1710

Group: 3

ID

Contribution (%)

1 Nguyễn Thị Thùy Dung SS16030

3

100

2 Nguyễn Công Minh SS16037

2

100

3 Nguyễn Ngọc Mạnh Khương SS16039

4

100

4 Trần Thị Thùy Dương SS16039

5

100

5 Hoàng Thị Mỹ Hoa SS16039

7

100

6 Hà Nguyễn Thu Nga SS16042

8

100

Table of Content

A Abstract 3

B Content 4

I Unemployment Rate 4

II Productivity and Growth 7

III Advice 10

IV Conclusion 14

C Reference 15

List of Fig Figure 1.1 Vietnam: Unemployment rate from 1999 to 2020……… 5

Figure 1.2 Vietnam: Unemployment Rate of Labour force at Working age, 2021……… 6

YFigure 2.1 Grab leads the “Money-burning” race in the first half of 2019……….8

Figure 2.2 Market share of ride-hailing applications in Vietnam in the first half of 2020…… 10

YFigure 3.1 Deduction rate calculated on vehicle sales (SDUD fee 20%)………

11 Figure 3.2 Deduction rate calculated on vehicle sales (SDUD fee 25%)……… 12

A Abstract

Grab (formerly known as GrabTaxi) is a Singapore-based technology company Providing motorbike and car transportation and transportation services in Singapore and other Southeast Asian countries such as Malaysia, Indonesia, Philippines, Vietnam, Thailand, Myanmar and Cambodia Grab first appeared in Vietnam in 2014 and brought a phenomenon of motorbike taxi technology leading to a series of other applications such as Gojek, Loship, Baemin, and so on

This report examined Grab's business model and analyzed the impact of grab on Vietnam Based on published articles, the results showed that Grab had a strong position in the transportation market and bring many benefits to the Vietnamese market While more research is needed for further analysis, the findings suggest that Grab's business still appears to have some risks for Vietnam's indices regarding unemployment rate or productivity and so on From our analysis of Grab, we have drawn many conclusions and advice for the government in this era

B Content

I Unemployment Rate

In 2019, Grab invested an additional 500 million USD in Vietnam to exploit opportunities in new areas in Vietnam such as transportation, food delivery and payment This proves that Grab needs a strong workforce to fulfill its desires Therefore, hiring more Grab drivers was the minimum necessity of Grab at that time

As a result, in the most recent sharing in 2019, Grab said that there are 195,000 driver partners in Vietnam, including 2 wheels and 4 wheels (Vien Thong, 2021) Thanks to that, until August 2019, Grab has helped hundreds of thousands of driver partners improve their livelihoods (Grab, 2019)

Moreover, in 2020, Grab announced a 'Tech For Good' development roadmap that will help lift local communities out of poverty, build a highly skilled Vietnamese workforce and create a better future environmental sustainability (Grab, 2019) Two of the three main items in the "Tech for good" campaign that Grab does for Vietnam are:

1 Lifting communities from poverty: Grab will expand to 63 provinces in Vietnam and create employment opportunities for millions of Vietnamese people to earn a living including delivery partners, sponsorship partners or trading partners [This is intended to improve the quality of life for unemployed, poor and near-poor households, especially in rural provinces, while enhancing their access to minimum wage income and enterprises earn more from business This activity will be the

Contribution section in the international item if the keep rate failed to market in low -less than 4%] (Grab, 2019)

Figure 1.1 Vietnam: Unemployment rate from 1999 to 2020

Source: Published by Aaron O'Neill, Feb 8, 2022, Statista

2 Building tomorrow’s skilled workforce today: Grab launches its flagship “Grab Ventures program”, in line with the government's national strategy to create 10 technology unicorns by 2030 (Grab, 2019) This shows that, as more subsidiaries are opened, providing more job opportunities for more people The number of unemployed people decreases thanks to this

The presence of Grab has brought significant benefits to people in solving the problem

of unemployment After more than a year of COVID-19, people seem to return to work as usual However, due to the impact of COVID-19, the number of businesses

withdrawing from the Vietnamese market in the first months of 2021 increased by 36%, up to 25,750 enterprises (Phuong Dong, 2021), which leads to a higher unemployment rate in Vietnam In the South, although there are new businesses entering the market, they still cannot provide a large number of job opportunities for many people in a short time

Figure 1.2 Vietnam: Unemployment Rate of Labour force at Working age, 2021

Source: The data is obtained from GSO

Therefore, there is a trend of unemployed workers to temporarily work for technology service enterprises, especially Grab Grab driver is a job that does not require high education or previous work experience, so Grab's presence has supported unemployed people to get a job Although Grab no longer has a policy to publish the number of active driver partners in 2022 However, as I mentioned above, the most recent

number they have announced in 2019 is about 195,000 partner drivers Now, more than 4 years have passed, and we can see that the number of Grab drivers has risen

"terribly"

II Productivity and Growth

Empowering Micro and Small Businesses: Microenterprises are at the heart of Grab's business model, while small businesses are seen as the lifeblood of Southeast Asia's economy To help these people save costs and improve productivity through the application of technology, Grab aims to help 5 million more brick-and-mortar businesses and small shops digitize their workflow (Grab, 2019) When Grab invests the companies will have the capital to buy machines and equipment for production Therefore, companies can produce a large number of goods and services It leads to productivity growing rapidly, and so do Vietnam's living standards because a country can only enjoy a high standard of living if it can produce large quantities of goods and services (Mankiw, 2021)

Grab Holdings Inc invest 500 million USD in Vietnam over the next 5 years to develop financial technology solutions, new mobile technology, and logistics with the goal of continuing to make positive contributions to the development of the digital economy develop of Vietnam and create millions of opportunities to increase income and contribute to improving the quality of life for Vietnamese people (Grab, 2019 ) From that, The average worker has more human capital knowledge and skills workers

acquire through education, training, and experience about technology and easy to create goods and services make productivity increase H/L causes an increase in Y/L

Figure 2.1 Grab leads the “Money-burning” race in the first half of 2019

Source: Each ride, Grab, GoViet, Be is "burning" 1-2.5 USD?, October 11, 2019

So far, Grab has helped improve the lives of hundreds of thousands of driver partners with a total cumulative income of nearly 1 billion USD, while supporting millions of people to access cashless payment methods through a strategic partnership with Moca (Grab, 2019) It improves society’s understanding of the best ways to produce goods and services Creating common knowledge: after one person uses it, everyone becomes aware of it and creates a new technology environment for more people

Grab will also encourage tech entrepreneurship and support the growth of Vietnam's tech startup ecosystem through its Grab Ventures program This is also in line with the Government's Strategy to Create 10 Tech Unicorns by 2030 In addition, Grab will also contribute to improving people's understanding of finance and digital, thereby

contributing a part to the national goal of having 65-70% of the population knowledgeable about these two areas (Grab, 2019) It can be said that Grab is not only

a technology motorbike taxi application, but it also gives Vietnamese people new knowledge, a new environment that increases the living capital and living standard of the people

Bringing the breath of the times and making the most of the superiority of the technology platform, Grab is considered a remarkable representative of the sharing economy with a declaration of the digital economic revolution, maximizing the symbiosis when opening up opportunities to earn additional income for more than 175,000 driver partners, helping to increase the efficiency of traffic service management for hundreds of cooperatives and transport partners (“What contribution does Grab make to the transport market and the sharing economy?”, 2022) On the other hand, Grab drivers have an average monthly income that is more than double the national average monthly income Sales partners also saw an average revenue of three times more than before partnering with GrabFood as we assist them in marketing and reaching a broad customer base

Figure 2.2 Market share of ride-hailing applications in Vietnam in the first half of 2020

Source: ABI Research Being a pioneering company like Grab and having access to advanced technology platforms in the 4.0 age that accept significant investment is a major incentive to develop, adapt, and keep up with the times turn the globe Since the transportation sector is also a service business, applying the 4.0 trend to alter travel patterns and raise the standard of transportation has become popular

III Advice

On the government's side, the reduction of VAT applied to production and business organizations and individuals has helped Grab partly reduce economic difficulties and

at the same time create momentum to recover from the impact of the COVID-19 pandemic Specifically,the Government's Decree 15/2022/ND-CP issued on January

28, 2022 detailing the tax exemption and reduction policies according to Resolution 43/2022/QH15 of the National Assembly , whereby the value-added tax (VAT) rate for passenger transport business services will be reduced by 2% (Grab, 2022) The government should take the above support measures in the current and future epidemic situation Moreover, it is necessary to have specific plans to deal with bad cases that severely affect the economy as well as increase the unemployment rate for the country

Figure 3.1 Deduction rate calculated on vehicle sales (SDUD fee 20%)

Source: GrabCar: Tax policy changes, Tuesday February 15th, 2022

Figure 3.2 Deduction rate calculated on vehicle sales (SDUD fee 25%).

Source: GrabCar: Tax policy changes, Tuesday February 15th, 2022

The success of Grab, with its creative business strategy combining several schools of thought, is a fantastic example of how companies are changing in the digital age To

compete in the current market, Vietnamese enterprises must alter their business strategies to capitalize on their organizations' strengths and adjust to shifting market conditions (PhoHen, n.d.)

Executives must first identify the organization's key competencies before making adjustments to products or services to create value for customers By expanding on that underlying resource, businesses may expand their business models and create more diverse revenue sources (PhoHen, n.d.)

In order to create new products and services that provide value, businesses look into and grasp the problems that their customers are experiencing They also support innovation at all organizational levels It might be an innovative product or service, or

it could optimize the pricing to be more affordable for customers than competitors (PhoHen, n.d.)

Generally speaking, enterprises may extract their own development plans from Grab's creative business model, which has been effective in Vietnam Leaders can successfully combine exploratory and exploitative thinking to develop and enhance their business strategy Reality has shown that this combination is successful in the Vietnamese market Executives must be aware of the organization's resources and key competencies They must also undertake market research to pinpoint client pain points Gaining regular training is essential to having strong human resources coherence and understanding (PhoHen, n.d.)

IV Conclusion

Grab officially entered the Vietnamese market in 2014, but after only a few short years, Grab has made great contributions to the development of Vietnam's economy The first is not to mention that Grab has supported jobs for more than thousands of Vietnamese people Since having Grab, people have more job opportunities without having a high education to be able to work This helps people have more income for themselves and their families It's direct support from Grab In addition, Grab also invests in various small companies so that companies can grow, thereby creating work opportunities for others This helps the unemployment rate in Vietnam to be lower than before

In addition, it is impossible not to mention that Grab's contribution has impacted productivity It is the investment in unicorn companies so that they can buy machinery and equipment, increase wages, and improve knowledge that has increased the productivity of employees in general and the Vietnamese economy in particular Along with increased efficiency, economic development also increases

In conclusion, the presence of Grab has contributed significantly to the development

of Vietnam's overall economy from reducing unemployment, increasing productivity and growth Vietnam

C Reference

Grab to invest US$500 million more into Vietnam to spur development of digital economy grab (2019, August 28) grab Retrieved July 26, 2022, from

https://www.grab.com/vn/en/press/business/grab-se-dau-tu-them-500-trieu-usd-vao-viet-nam-de-thuc-day-phat-trien-nen-kinh-te-so/

Grab Team (2022, February 15) GrabCar | Value-added tax policy changes according to Decree 15/2022/ND-CP from February 15, 2022 grab Retrieved July

26, 2022, from

https://www.grab.com/vn/en/blog/driver/nd15-2022-nd-cp-grabcar-15-02-2022/ Grab's Breakthrough Business Model in Vietnam (n.d.) phohen Retrieved July 26,

2022, from https://phohen.com/post-detail/mo-hinh-kinh-doanh-dot-pha-cua-grab-tai-viet-nam/1068850611

Grab aims to realize the mission of Technology for the Community in Southeast Asia according to the roadmap to 2025 (2019, September 24) grab Retrieved July 27,

2022, from https://www.grab.com/vn/press/business/grab-dat-muc-tieu-thuc-hien-su-menh-cong-nghe-vi-cong-dong-o-dong-nam-a-theo-lo-trinh-den-nam-2025/

General Statistics Office of Vietnam (2021, April 20) Infographic labour and employment in the first quarter of 2021 gso.gov.vn Retrieved July 25, 2022, from https://www.gso.gov.vn/en/data-and-statistics/2021/04/infographic-labour-and-employment-in-the-first-quarter-of-2021/

General Statistics Office of Vietnam (2021, July 14) Infographic labour force and employment in second quarter and 6 months of 2021 gso.gov.vn Retrieved July 25,

2022, from https://www.gso.gov.vn/en/data-and-statistics/2021/07/infographic-labour-force-and-employment-in-second-quarter-and-6-months-of-2021/

General Statistics Office of Vietnam (2021, October 13) Infographic labour and employment in quarter III and 9 months of 2021 gso.gov.vn Retrieved July 25, 2022, from https://www.gso.gov.vn/en/data-and-statistics/2021/10/infographic-labour-and-employment-in-quarter-iii-and-9-months-of-2021/