Vietnam: new destination for Asian multinationals

Regional and global foreign investors and multinationals operating in Vietnam are contributing to more than 80 percent of export turnover and 25 percent of domestic investment value.

MM Depot Thanh Hoa, the seventh delivery center of MM Mega Market in Vietnam, has recently opened. The center targets HORECA clients (Hotel-Restaurant-Catering/Cafe/Canteen), which means it provides food and beverages.

The move by MM Mega Market, a subsidiary of Thai BJC/TCC, serves demand for transiting, storing and distributing fresh food in large quantities to local clients.

Bruno Jousselin of MM Mega Market said when opening the 700 sq m depot in Thanh Hoa, the retailer noted the economic growth, especially tourism development, in the province.

In February 2023, the construction of Aeon Mall Hue, covering an area of 8.62 hectares, capitalized at $169 million, kicked off. This is the largest general shopping center in the central region of Vietnam. 

Furusawa Yasuyuki, CEO of Aeon Vietnam, told VietNamNet that the company will be flexible in expanding business. The retailer from Japan will open more stores under different forms to satisfy customers’ shopping behaviors.

The recent moves of the two retail groups from Thailand and Japan show the attractiveness of the Vietnamese consumer market, though the economy is facing some difficulties.

According to Savills Vietnam, in 2022, newly registered foreign direct investment (FDI) from Taiwan (China) reached $215 million, raising total investment value from Taiwan in Vietnam to $1.35 billion.

Taiwan’s projects are mostly in the fields of processing and manufacturing industry, construction and real estate. It ranked second in FDI capital in Vietnam in the first two months of the year with $407.1 million, accounting for 13 percent of total investment capital.

Neil MacGregor from Savills Vietnam noted that the new capital flow is coming from hi-tech investors from Taiwan (China) and India. The real estate market is also witnessing projects successfully developed by Taiwanese investors such as Phu My Hung urban area in HCM City, Royal Center and Nikko Hotel.

In HCM City, which leads in number of foreign invested projects with total investment capital of $56.35 billion, 103 foreign invested projects were licensed in the first two months of 2023, totaling $99 million. 

This was up by 47 percent in number of projects and 24 percent in amount of capital compared with the same period last year.

Of this, 54 percent of capital was poured into the construction sector, 32 percent into wholesale and retail, and automobile and motor repair; and 7.5 percent into science and technology.

Vietnam’s consumption level

Joonsuk Park from HSBC Vietnam said FDI is one of the important catalysts helping Vietnam become one of the most open economies in the region. The government of Vietnam has been taking full advantage of FTAs (free trade agreements) to create a foundation for export growth.

Meanwhile, the domestic market is also an important market for multinationals. HSBC’s survey pointed out that the Vietnamese consumer market will exceed Thailand, UK and Germany by 2030.

Currently, regional and global foreign investors and multinationals in Vietnam are  contributing to more than 80 percent of total export turnover from Vietnam and more than 25 percent of domestic investment value. They are mostly Asian companies. 

Vietnam’s leading export products include mobile phones, electronics, machinery, garments, footwear and woodwork.

Asian multinationals from South Korea, China, Hong Kong (China), Japan, Singapore, and Taiwan (China) are the best known.

HSBC said some multinationals in Asia are interested in Vietnam, especially in the fields of retail, semiconductor, electronics, mobile devices, plastics, renewable energy and logistics. They are seeking to scale up business or make new investments in Vietnam.