Samsung is a South Korean multinational conglomerate founded in 1938, with Samsung Electronics being its flagship subsidiary and one of the world’s largest technology companies.
The challenge
Samsung’s dealers are spread across Vietnam, and it is challenging to manage them across different geographical locations, in terms of collections and tracking payments.
Dealers need to draw on their own capital or obtain financing at high interest rates to import goods from Samsung. This can be challenging during higher seasonal demand for household appliances, and around new product launches, especially for new mobile phone models.
The solution
Working closely with Samsung to customise a one-stop service, VietinBank (VTB), which has 155 branches and 957 transaction offices across Vietnam, has established:
Anchor solutions – account services, cash management (virtual account); a customised solution to optimise facility utilisation.
Distributor financing – working capital loans, drawn against Invoices uploaded by Anchor via e-banking system and access to VTB’s systems.
Retail co-operation programme – app-in-all connection to embed Samsung’s e-store on VTB’s mobile iPay App, with access to VTB’s 18 million+ customers, over eight million users and 25,000 employees, allowing for customised promotional offers and direct purchase of the company’s products via the banking app. The solution also offers various payment methods to make purchases via bank accounts, credit cards and overdraft limits.
The solution is in its first phase in Vietnam, and the bank is in discussion with Samsung to replicate in Indonesia, The Philippines and Thailand with respective local partner banks of MUFG.
Best practice and innovation
This solution is a true programme-based distributor finance structure that is scalable and can be replicated across other APAC countries with local partner banks having on‑the‑ground expertise as well as extensive banking network. This can lead to deeper and wider market penetration for major white goods and consumer electronics manufacturers to expand further into the developing markets, while managing various risks and credit matrices. A strong trust of client regional relationship and local partnership is key in the deal involving Samsung as a global household brand from Korea, banking with MUFG, an international franchise of Japanese heritage, and structuring the deal in Vietnam with the VTB partnership and navigating the local nuances.
This is a customised solution to boost the maximum credit utilisation by target dealers where VTB send monthly reports on the loan disbursement and applicable interest rates for its target dealers. Samsung shares monthly reports on the sales to each dealer for VTB to estimate the wallet share in terms of the credit usage by the dealers.
The structure has access to the wide branch network of VietinBank across Vietnam to support its dealer network, while still working through the global relationship bank, MUFG.
The solution has boosted Samsung’s sales and visibility in Vietnam via the retail co-operation programme, which supports purchases of the company’s products among end‑users through improving the user experience and promoting products on VTB’s large customer base.
Key benefits
Cost savings.
Process efficiencies.
Risk mitigated.
Future-proof solution.
Improved key performance indicator (KPI) metrics.
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