Vietnam: A Thriving Hub for Foreign Investment Opportunities
After just two weeks in Vietnam, Andrew Anderson-Sprecher, a senior agricultural attaché at the U.S. Consulate General in Ho Chi Minh City, has observed the increasing importance of the Vietnamese market for high-quality American agricultural products. Vietnam has emerged as a promising market not only for the United States but also for other countries. A June 2023 report from the Institute of Policy and Strategy for Agricultural and Rural Development highlights the strong consumer demand among Vietnamese people for fruits and nuts, including chestnuts, almonds, walnuts, seaweed, and potatoes sourced from abroad. In May 2023, Vietnam spent $5.8 million on fruit and vegetable imports from the European Union, surpassing the monthly average expenditure in 2022 by $1.7 million. Notably, potato imports led the way with a value of $1.7 million, representing a 77.9% increase, while cherry imports surged 44.5 times compared to May 2022, reaching $340,000. These figures demonstrate that Vietnam’s population of 100 million is willing to pay a premium for mid- and high-end products.
As a result, foreign retailers are continuing to invest in Vietnam, seizing the opportunity to introduce innovative business models. In late July, Thai retailer Central Retail launched its new furniture brand, Come Home, entering the interior decoration market in Ho Chi Minh City and committing to invest an additional $1.45 billion in Vietnam by 2027. Central Retail Vietnam already operates over 340 retail centers and stores across 40 provinces and cities, covering a retail space exceeding 1.2 million square meters. The company’s expansion strategy aims to double the number of sales points to 600 by 2027. Similarly, a prominent Japanese retail corporation opened its first compact supermarket in Binh Duong Province in southern Vietnam, demonstrating its strategic move to diversify its retail approach in the country. MM Mega Market, another Thai retailer, has been welcoming monthly visits from foreign business delegations interested in exploring the Vietnamese market, along with on-site promotional initiatives organized by foreign business associations.
Walt Power, CEO of The Grand Ho Tram Strip, a large tourist complex in Ba Ria-Vung Tau Province near Ho Chi Minh City, emphasizes that Vietnam consistently ranks as a primary consideration for investors seeking to expand their businesses. While high-end entertainment complexes in Vietnam used to primarily cater to foreigners and international tourists, the domestic market has shown the fastest recovery following the recent COVID-19 pandemic. Power considers his company fortunate to have a target audience of over 15 million domestic tourists. Not only in tourism but also in industrial manufacturing, Power notes that there have been cases where companies initially relocated their factories from Vietnam to Indonesia but returned to Vietnam within six months, realizing that it offers the most favorable conditions for production and service development. Foreign investors consistently express a high level of optimism about Vietnam’s future development prospects, according to Power.
Amanda Murphy, HSBC’s head of commercial banking business for South and Southeast Asia, predicts that as businesses seek geographic diversity beyond China, Southeast Asia, including Vietnam, will continue to gain more market share in global direct investment. A recent survey by HSBC indicates that within the next 12-24 months, businesses in the Asia-Pacific region plan to relocate 24.4% of their supply chains to Southeast Asia, up from 21.4% in 2020.