"As cost management and quality continue to be key concerns for many businesses in the region, IFM service providers have been striving to offer service standardization as well as significant cost, energy, and operational efficiencies for end users”.

The report titled “Vietnam Facility Management Market Outlook to 2023 - By Single, Bundled and Integrated Services; By Soft Services (Housekeeping, Security, Landscaping and Others) and Hard Services (Electromechanical Services, Operations and Maintenance Services, Fire Safety and Security Systems), By End User Sectors (Commercial, Industrial, Hospitality, Residential, Infrastructure and Others)” by Ken Research suggested that the facility management market in Vietnam has been growing due to rapid urbanization, growing  awareness amongst the end users of the benefits of such service and adoption of technology to improve the quality of services. The market is expected to register a positive CAGR of 6.0% in terms of revenue during the forecast period 2018-2023E.

Higher inflow of Foreign Direct Investment: The number of projects attracting FDI has grown at a CAGR of 8.8% during the period 2013-2018. The manufacturing and processing industry is set to receive the largest amount of investment (77.7% of total FDI inflow), followed by real estate (7.2%) and professional activities, science and technology (3.5%). Hong Kong was the biggest source of FDI pledges in the first three months of 2019 (47%of total FDI inflow), followed by Singapore (13.0%) and South Korea (12.0%). This will not only increase production in the economy but will also give rise to more employment, thereby raising the standard of living and affordability of facility management services.

Dependence on In-house Personnel: In-house Personnel has contributed above 50% in facility management industry revenue in 2018 due to lack of strong domestic players and major companies of the Facility Management industry in Vietnam rely on In-house personnel to cater to the diverse needs of the clients. However, there has been an increasing trend to outsource personnel across commercial, residential, industrial and infrastructure sectors due to increased scale of operations.

The Commercial sector is the highest seeker of FM Services: Commercial sector contributed the highest revenue share of over 35% to the overall facility management industry in Vietnam in 2018. The commercial sector has a major share in the country’s GDP. The growth of office spaces can be justified by population growth, rapid urbanization, declining unemployment rates and lower interest rates. In addition to this, commercial spaces are highly potent to demand integrated facility management services.

Rising Demand of Integrated Facility Management (IFM) Services: The primary challenge faced by the facility management industry in Vietnam is the lack of awareness of Integrated Facility Management Services (IFM) and the benefits that it offers resulting in the low penetration in the market. However, the trend is changing and clients are becoming more inclined towards IFM services as they are cost efficient and improve operational efficiency. In future, it is anticipated that IFM services will contribute ~12.0% share in generating revenues for the facility management industry by 2023E.

Source: Ken Research

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