Vietnam eyes new Japanese investment inflow

[Aepsilons]

Vietnam is likely to see a new wave of investment from Japan as its investors have shown continued interest in the Southeast Asian market, predicted experts.

Recently, a delegation of 30 businesses from the Japan Business Federation (Keidanren) attended the 2015 Vietnam-Japan trade and investment promotion forum in Ho Chi Minh City to explore the investment and business environment.

According to Keidanren Senior Managing Director Mukuta Satochi, Vietnam is considered a gateway for Japan to enter the ASEAN market.

As the ASEAN Economic Community forms at the end of this year, Vietnam ’s role as a business venue in the global supply chain strategy will increase, he said.

Meanwhile, Hirotaka Yasuzumi, Managing Director of the Japan External Trade Organisation (JETRO) office in Ho Chi Minh City , said a study by JETRO revealed that Vietnam is chosen by a majority of Japanese businesses operating in Thailand and China as a place to locate their manufacturing facilities within the Thailand-Plus-One and China-Plus-One strategies.

The Japanese enterprise trend of shifting to a third country from China is increasing, mostly targeting ASEAN countries, especially Vietnam , he said.

The JETRO survey also reported that most enterprises have been restructuring their facilities abroad for two-three years while 595 out of the 3,471 firms involved in the survey plan to restructure in the next two-three years. About 780 projects are scheduled to change locations.

Abundant labour resources and low costs are among Vietnam’s attractive characteristics, said Hirotaka, noting that payments for a well-trained worker with good foreign language skills in Ho Chi Minh City is about 440 USD per person per month, half the cost in Guangzhou, China.

The price for power is about 0.09 USD/kilowatt hour and water is about 0.43 USD/cubic metre, two or three times cheaper than those in Manila (the Philippines ) and Guangzhou .

According to JETRO, 62.3 percent of Japanese enterprises in Vietnam were profitable last year, rising from 59.2 percent in 2013.

Statistics from the Foreign Investment Agency under the Ministry of Planning and Investment showed that in the first seven months of this year, Japan was the fifth largest FDI investor in Vietnam with 176 new and 82 expanded projects with combined capital of 716 million USD.

Thus far, Japan has had 788 valid projects in Ho Chi Minh City worth 2.72 billion USD, mostly in property, processing, manufacturing, whole sale & retail, motors, automobile repair and science-technology.

Le Thanh Liem, Vice Chairman of the Ho Chi Minh City People’s Committee, said the city is in need of Japanese investment in a number of key projects in urban railway, wastewater treatment and trade.

He called on firms to engage in specific projects, including monorail lines 1 and 6, a 49.54-million-USD West Saigon wastewater treatment plant and a 312-million-USD underground trade centre in Ben Thanh central station.

He also revealed that Ho Chi Minh City will focus on setting up cooperation with various Japanese localities, including Osaka, Hyogo, Shiga and Yokohama, while signing a framework deal on economic cooperation with the Kansai Bureau of Economy, Trade and Industry as part of efforts to connect Vietnamese and Japanese enterprises.


Vietnam eyes new Japanese investment inflow - News VietNamNet

 

[vtnsx]

The issue with Japan right now is shortage of labor. I was watching a short documentary on Japan Internship Program that ripped people off and it caused a lot problem. I hope this has been resolved.

 

[Aepsilons]

Lots of areas of improvement, buddy, but given the necessity of inter-change, we can rest assured that we can solve it with our partners.

 

[NiceGuy]

The foreign investments will continue to flow to VN as long as we still control SCS(east sea).

 

[opruh]

Traitor, we Filipinos shall look for new partners.

 

[vtnsx]

The foreign investments will continue to flow to VN as long as we still control SCS(east sea).

Niceguy, are you really eating popcorn? because I want some. Damn it!

 

[NiceGuy]

Niceguy, are you really eating popcorn? because I want some. Damn it!

In fact Im eating ice-cream (coz its hot now) and snack

 

[JaiMin]

Vietnam is likely to see a new wave of investment from Japan as its investors have shown continued interest in the Southeast Asian market, predicted experts.

Recently, a delegation of 30 businesses from the Japan Business Federation (Keidanren) attended the 2015 Vietnam-Japan trade and investment promotion forum in Ho Chi Minh City to explore the investment and business environment.

According to Keidanren Senior Managing Director Mukuta Satochi, Vietnam is considered a gateway for Japan to enter the ASEAN market.

As the ASEAN Economic Community forms at the end of this year, Vietnam ’s role as a business venue in the global supply chain strategy will increase, he said.

Meanwhile, Hirotaka Yasuzumi, Managing Director of the Japan External Trade Organisation (JETRO) office in Ho Chi Minh City , said a study by JETRO revealed that Vietnam is chosen by a majority of Japanese businesses operating in Thailand and China as a place to locate their manufacturing facilities within the Thailand-Plus-One and China-Plus-One strategies.

The Japanese enterprise trend of shifting to a third country from China is increasing, mostly targeting ASEAN countries, especially Vietnam , he said.

The JETRO survey also reported that most enterprises have been restructuring their facilities abroad for two-three years while 595 out of the 3,471 firms involved in the survey plan to restructure in the next two-three years. About 780 projects are scheduled to change locations.

Abundant labour resources and low costs are among Vietnam’s attractive characteristics, said Hirotaka, noting that payments for a well-trained worker with good foreign language skills in Ho Chi Minh City is about 440 USD per person per month, half the cost in Guangzhou, China.

The price for power is about 0.09 USD/kilowatt hour and water is about 0.43 USD/cubic metre, two or three times cheaper than those in Manila (the Philippines ) and Guangzhou .

According to JETRO, 62.3 percent of Japanese enterprises in Vietnam were profitable last year, rising from 59.2 percent in 2013.

Statistics from the Foreign Investment Agency under the Ministry of Planning and Investment showed that in the first seven months of this year, Japan was the fifth largest FDI investor in Vietnam with 176 new and 82 expanded projects with combined capital of 716 million USD.

Thus far, Japan has had 788 valid projects in Ho Chi Minh City worth 2.72 billion USD, mostly in property, processing, manufacturing, whole sale & retail, motors, automobile repair and science-technology.

Le Thanh Liem, Vice Chairman of the Ho Chi Minh City People’s Committee, said the city is in need of Japanese investment in a number of key projects in urban railway, wastewater treatment and trade.

He called on firms to engage in specific projects, including monorail lines 1 and 6, a 49.54-million-USD West Saigon wastewater treatment plant and a 312-million-USD underground trade centre in Ben Thanh central station.

He also revealed that Ho Chi Minh City will focus on setting up cooperation with various Japanese localities, including Osaka, Hyogo, Shiga and Yokohama, while signing a framework deal on economic cooperation with the Kansai Bureau of Economy, Trade and Industry as part of efforts to connect Vietnamese and Japanese enterprises.


Vietnam eyes new Japanese investment inflow - News VietNamNet

Vietnamese consumers are making their way from traditional markets into air-conditioned, brightly-lit convenience stores.
With the growing spending power of middle class consumers, the Vietnamese retail market is in need of new and modern outlets. And for many investors, the race has begun.
Vietnamese conglomerate Vingroup is expected to hire 10,000 employees to serve its expansion of supermarkets and convenience stores this year.
The company says it will launch about 50 supermarkets and 360 convenience stores.
But it is foreign investors that are driving the growth of the local convenience store market.
In February, US chain Circle K opened its 100th outlet in Ho Chi Minh City. It has planned to launch 150 convenience stores in Vietnam this year, securing its position in the country.
Singaporean Shop&Go has opened 126 stores since its arrival in 2005, becoming the leading convenience store chain in Vietnam.
More competition is expected as 7-Eleven, a major Japanese company, has also announced plans to enter the market in 2017.
Another Japanese retailer, FamilyMart, has already established a foothold in Ho Chi Minh City.
Dinh Thi My Loan, chairwoman of the Association of Vietnam Retailers, said convenience stores expand in the context that local people, with higher income, have a stronger demand for higher quality of goods and services, compared to a few years ago.
They often opt for convenience stores instead of small grocery shops and traditional markets for their shopping, Loan said.
According to a recent report of Nielsen, consumers have shifted away from wet markets and traditional trade stores in recent years.
The share of wet markets and traditional grocery stores respectively declined 5 percent and 17 percent in 2014 compared to 2012. Customers’ visit frequency also decreased, said the report.
Meanwhile, the need for convenience stores continues to grow, especially in urban areas in Vietnam.
Convenience stores rose from 147 stores in 2012 to 348 in 2014, while mini-supermarkets increased from 863 outlets in 2012 to 1,452 in 2014.
On Pham Ngu Lao Street in Ho Chi Minh City's District 1, Shop&Go, Circle K, B’s Mart stores are only a few steps away from one another.
Nielsen attributed the growth in a large part to the increase of "time-poor and predominantly young shoppers" in the country.
“Consumers are increasingly demanding products and solutions that help them in their increasingly busy life," Vaughan Ryan, Managing Director of Nielsen Vietnam, said.
"As a result we will see the emergence of both the convenience channel and e-commerce in Vietnam, to meet this consumer demand.”
Nguyen Bao Loc, vice general director of retailer Intimex Vietnam, said retailers are focused more on opening convenience stores, which require less space and less investment than supermarkets.
Investors could gain profits easily because rents are cheap, around $9 per square meter. The rate for a good site to open a supermarket may cost ten times more, he said.
With a relatively small outlay of just around $10,000 to $20,000, it also takes less time for investors to break even with a convenient store that can carry up to 2,000 items of goods, he said.
According to experts, Vietnam has great potential for the development of convenience stores, considering the number of existing convenience stores now are still small compared to the population.
Vietnam has a 90 million population and the size of its middle class is expected to double by 2020, owing to annual economic growth of over 5 percent since 2000.
Nguyen Huong Quynh, head of Nielsen Vietnam, said there is one convenience store or mini-mart for every 21,000 residents in China, and one for 1,800 in South Korea.
Meanwhile, the ratio in Vietnam is one per 69,000 residents. The number of convenience stores and mini-marts needs to triple to meet the demand, she said.
Obstacles
Despite bright prospects for convenience stores in Vietnam, their development is not always smooth.
This could be seen from the case of a joint venture between Ministop, an affiliate of Japan's second largest retailer AEON, and G7, an arm of local coffee producer Trung Nguyen.
They aimed to develop 500 convenience stores called G7 Mart-Ministop across the country within five years from 2011.
However, their partnership ended early this year, after only 17 stores had been opened.
The venture has reportedly failed to reach the target because of difficulties in finding premises in Hanoi and Ho Chi Minh City.
Commenting on the reasons for the end of the partnership, industry insiders said the two sides have committed that the stores would sell only locally produced goods. As a result, their stores have failed to ensure an abundant supply of products and offer competitive prices, according to local media.
Industry insiders have also confirmed that foreign retailers are dominating the market. Ho Chi Minh City alone has some 500 convenience stores, most of which are foreign-owned.
An industry insider said most retailers in Vietnam are suffering losses, but their goal is to stretch influence by any means.
“It’s not time yet to make profits; it's time to grab more market share,” the insider said.
Retailers often suffer losses in the first four to seven years.
Losses may prove a problem for local firms, who often are short on capital and cannot compete against foreign chains with deep pockets.

 

[vtnsx]

Vietnamese consumers are making their way from traditional markets into air-conditioned, brightly-lit convenience stores.
With the growing spending power of middle class consumers, the Vietnamese retail market is in need of new and modern outlets. And for many investors, the race has begun.
Vietnamese conglomerate Vingroup is expected to hire 10,000 employees to serve its expansion of supermarkets and convenience stores this year.
The company says it will launch about 50 supermarkets and 360 convenience stores.
But it is foreign investors that are driving the growth of the local convenience store market.
In February, US chain Circle K opened its 100th outlet in Ho Chi Minh City. It has planned to launch 150 convenience stores in Vietnam this year, securing its position in the country.
Singaporean Shop&Go has opened 126 stores since its arrival in 2005, becoming the leading convenience store chain in Vietnam.
More competition is expected as 7-Eleven, a major Japanese company, has also announced plans to enter the market in 2017.
Another Japanese retailer, FamilyMart, has already established a foothold in Ho Chi Minh City.
Dinh Thi My Loan, chairwoman of the Association of Vietnam Retailers, said convenience stores expand in the context that local people, with higher income, have a stronger demand for higher quality of goods and services, compared to a few years ago.
They often opt for convenience stores instead of small grocery shops and traditional markets for their shopping, Loan said.
According to a recent report of Nielsen, consumers have shifted away from wet markets and traditional trade stores in recent years.
The share of wet markets and traditional grocery stores respectively declined 5 percent and 17 percent in 2014 compared to 2012. Customers’ visit frequency also decreased, said the report.
Meanwhile, the need for convenience stores continues to grow, especially in urban areas in Vietnam.
Convenience stores rose from 147 stores in 2012 to 348 in 2014, while mini-supermarkets increased from 863 outlets in 2012 to 1,452 in 2014.
On Pham Ngu Lao Street in Ho Chi Minh City's District 1, Shop&Go, Circle K, B’s Mart stores are only a few steps away from one another.
Nielsen attributed the growth in a large part to the increase of "time-poor and predominantly young shoppers" in the country.
“Consumers are increasingly demanding products and solutions that help them in their increasingly busy life," Vaughan Ryan, Managing Director of Nielsen Vietnam, said.
"As a result we will see the emergence of both the convenience channel and e-commerce in Vietnam, to meet this consumer demand.”
Nguyen Bao Loc, vice general director of retailer Intimex Vietnam, said retailers are focused more on opening convenience stores, which require less space and less investment than supermarkets.
Investors could gain profits easily because rents are cheap, around $9 per square meter. The rate for a good site to open a supermarket may cost ten times more, he said.
With a relatively small outlay of just around $10,000 to $20,000, it also takes less time for investors to break even with a convenient store that can carry up to 2,000 items of goods, he said.
According to experts, Vietnam has great potential for the development of convenience stores, considering the number of existing convenience stores now are still small compared to the population.
Vietnam has a 90 million population and the size of its middle class is expected to double by 2020, owing to annual economic growth of over 5 percent since 2000.
Nguyen Huong Quynh, head of Nielsen Vietnam, said there is one convenience store or mini-mart for every 21,000 residents in China, and one for 1,800 in South Korea.
Meanwhile, the ratio in Vietnam is one per 69,000 residents. The number of convenience stores and mini-marts needs to triple to meet the demand, she said.
Obstacles
Despite bright prospects for convenience stores in Vietnam, their development is not always smooth.
This could be seen from the case of a joint venture between Ministop, an affiliate of Japan's second largest retailer AEON, and G7, an arm of local coffee producer Trung Nguyen.
They aimed to develop 500 convenience stores called G7 Mart-Ministop across the country within five years from 2011.
However, their partnership ended early this year, after only 17 stores had been opened.
The venture has reportedly failed to reach the target because of difficulties in finding premises in Hanoi and Ho Chi Minh City.
Commenting on the reasons for the end of the partnership, industry insiders said the two sides have committed that the stores would sell only locally produced goods. As a result, their stores have failed to ensure an abundant supply of products and offer competitive prices, according to local media.
Industry insiders have also confirmed that foreign retailers are dominating the market. Ho Chi Minh City alone has some 500 convenience stores, most of which are foreign-owned.
An industry insider said most retailers in Vietnam are suffering losses, but their goal is to stretch influence by any means.
“It’s not time yet to make profits; it's time to grab more market share,” the insider said.
Retailers often suffer losses in the first four to seven years.
Losses may prove a problem for local firms, who often are short on capital and cannot compete against foreign chains with deep pockets.

Wow! I'm lost!

“It’s not time yet to make profits; it's time to grab more market share,” the insider said.
Retailers often suffer losses in the first four to seven years.
Losses may prove a problem for local firms, who often are short on capital and cannot compete against foreign chains with deep pocket"

sub division of stores are better than convient store. Convient stores would take all the profits from little shops. Which making the investors rich. Sub division of stores allow for more business store owners to thrive.

 

[Aepsilons]

Vietnamese consumers are making their way from traditional markets into air-conditioned, brightly-lit convenience stores.
With the growing spending power of middle class consumers, the Vietnamese retail market is in need of new and modern outlets. And for many investors, the race has begun.
Vietnamese conglomerate Vingroup is expected to hire 10,000 employees to serve its expansion of supermarkets and convenience stores this year.
The company says it will launch about 50 supermarkets and 360 convenience stores.
But it is foreign investors that are driving the growth of the local convenience store market.
In February, US chain Circle K opened its 100th outlet in Ho Chi Minh City. It has planned to launch 150 convenience stores in Vietnam this year, securing its position in the country.
Singaporean Shop&Go has opened 126 stores since its arrival in 2005, becoming the leading convenience store chain in Vietnam.
More competition is expected as 7-Eleven, a major Japanese company, has also announced plans to enter the market in 2017.
Another Japanese retailer, FamilyMart, has already established a foothold in Ho Chi Minh City.
Dinh Thi My Loan, chairwoman of the Association of Vietnam Retailers, said convenience stores expand in the context that local people, with higher income, have a stronger demand for higher quality of goods and services, compared to a few years ago.
They often opt for convenience stores instead of small grocery shops and traditional markets for their shopping, Loan said.
According to a recent report of Nielsen, consumers have shifted away from wet markets and traditional trade stores in recent years.
The share of wet markets and traditional grocery stores respectively declined 5 percent and 17 percent in 2014 compared to 2012. Customers’ visit frequency also decreased, said the report.
Meanwhile, the need for convenience stores continues to grow, especially in urban areas in Vietnam.
Convenience stores rose from 147 stores in 2012 to 348 in 2014, while mini-supermarkets increased from 863 outlets in 2012 to 1,452 in 2014.
On Pham Ngu Lao Street in Ho Chi Minh City's District 1, Shop&Go, Circle K, B’s Mart stores are only a few steps away from one another.
Nielsen attributed the growth in a large part to the increase of "time-poor and predominantly young shoppers" in the country.
“Consumers are increasingly demanding products and solutions that help them in their increasingly busy life," Vaughan Ryan, Managing Director of Nielsen Vietnam, said.
"As a result we will see the emergence of both the convenience channel and e-commerce in Vietnam, to meet this consumer demand.”
Nguyen Bao Loc, vice general director of retailer Intimex Vietnam, said retailers are focused more on opening convenience stores, which require less space and less investment than supermarkets.
Investors could gain profits easily because rents are cheap, around $9 per square meter. The rate for a good site to open a supermarket may cost ten times more, he said.
With a relatively small outlay of just around $10,000 to $20,000, it also takes less time for investors to break even with a convenient store that can carry up to 2,000 items of goods, he said.
According to experts, Vietnam has great potential for the development of convenience stores, considering the number of existing convenience stores now are still small compared to the population.
Vietnam has a 90 million population and the size of its middle class is expected to double by 2020, owing to annual economic growth of over 5 percent since 2000.
Nguyen Huong Quynh, head of Nielsen Vietnam, said there is one convenience store or mini-mart for every 21,000 residents in China, and one for 1,800 in South Korea.
Meanwhile, the ratio in Vietnam is one per 69,000 residents. The number of convenience stores and mini-marts needs to triple to meet the demand, she said.
Obstacles
Despite bright prospects for convenience stores in Vietnam, their development is not always smooth.
This could be seen from the case of a joint venture between Ministop, an affiliate of Japan's second largest retailer AEON, and G7, an arm of local coffee producer Trung Nguyen.
They aimed to develop 500 convenience stores called G7 Mart-Ministop across the country within five years from 2011.
However, their partnership ended early this year, after only 17 stores had been opened.
The venture has reportedly failed to reach the target because of difficulties in finding premises in Hanoi and Ho Chi Minh City.
Commenting on the reasons for the end of the partnership, industry insiders said the two sides have committed that the stores would sell only locally produced goods. As a result, their stores have failed to ensure an abundant supply of products and offer competitive prices, according to local media.
Industry insiders have also confirmed that foreign retailers are dominating the market. Ho Chi Minh City alone has some 500 convenience stores, most of which are foreign-owned.
An industry insider said most retailers in Vietnam are suffering losses, but their goal is to stretch influence by any means.
“It’s not time yet to make profits; it's time to grab more market share,” the insider said.
Retailers often suffer losses in the first four to seven years.
Losses may prove a problem for local firms, who often are short on capital and cannot compete against foreign chains with deep pockets.

That was a very great read, @JaiMin , Thanks! And I agree with the ending comments aspect of the paper; there are indeed obstacles but there are various opportunities and one can see that in the 500 convenience stores known as the G7 minishops, among others. Let's focus on this positivist aspect!



Regards,