Korean companies expand distribution channels in Vietnam
The Republic of Korea (RoK)-made products have been flooding the Vietnamese market thanks to expanded distribution networks.
Go Vap district in Ho Chi Minh City, for example, has seen more shopping malls and supermarkets opened by the RoK's retailers Lotte and Emart.
An analyst noted that Vietnam was not only the ‘aiming point’ of the RoK's manufacturing groups, but it had been eyed by big RoK retailers.
The RoK's foreign direct investment in Vietnam has increased sharply in recent years. The country became the largest foreign direct investor in 2014 with gross registered investment capital of US$36.7 billion.
Martin Tricaud, CEO of HSBC RoK, quoted a RoK's newspaper as saying that Vietnam can be a strategic road which leads the RoK to ASEAN, China, India and free trade agreements.
Meanwhile, a survey of the RoK International Trade Association found that 49% businesses chose Vietnam as their most ideal investment destination.
According to the RoK Ministry of Finance, in the first six months of 2015, the country invested US$17.45 billion overseas, an increase of 12.1% over the last year, while investment in Vietnam increased by 82.2%. The sharpest investment increase, 83%, occurred in distribution (wholesale & retail).
A branding expert said it was understandable why the RoK wanted to expand distribution networks in Vietnam. The RoK has a developed retail industry, while Vietnam is a market with great potential.
Meanwhile, Vietnamese and RoK cultures have similarities, according to HSBC Vietnam CEO Pham Hong Hai.
Existing RoK retailers have been expanding their operation in Vietnam. In 2014, Lotte opened its first supermarket in Hanoi. In mid-2015, it announced the deal of buying 70% of stake of Diamond Plaza in Ho Chi Minh City.
Most recently, Lotte agreed to pay a deposit and the land rent for Thu Thiem Eco Smart City.
Meanwhile, Emart, the RoK largest retail brand, belonging to Shinsegae Group, has officially set foot in Vietnam, four years after it began eyeing the market in 2011.
The retailer is moving ahead with its project to develop a hypermarket in Go Vap district in Ho Chi Minh City with estimated investment capital of US$60 million.
The branding expert noted that RoK investors believe now is the right time for them to “dig a distribution channel” in Vietnam, after the Vietnam-RoK Free Trade Agreement (VSKFTA) was signed in May 2015.
A report of the Foreign Investment Agency (FIA) showed US$5.49 billion worth of FDI capital was registered in the first half of 2015. The RoK was the biggest FDI investor with US$1.52 billion worth of registered capital, accounting for 27.7%.
An analyst noted that Vietnam was not only the ‘aiming point’ of the RoK's manufacturing groups, but it had been eyed by big RoK retailers.
The RoK's foreign direct investment in Vietnam has increased sharply in recent years. The country became the largest foreign direct investor in 2014 with gross registered investment capital of US$36.7 billion.
Martin Tricaud, CEO of HSBC RoK, quoted a RoK's newspaper as saying that Vietnam can be a strategic road which leads the RoK to ASEAN, China, India and free trade agreements.
Meanwhile, a survey of the RoK International Trade Association found that 49% businesses chose Vietnam as their most ideal investment destination.
According to the RoK Ministry of Finance, in the first six months of 2015, the country invested US$17.45 billion overseas, an increase of 12.1% over the last year, while investment in Vietnam increased by 82.2%. The sharpest investment increase, 83%, occurred in distribution (wholesale & retail).
A branding expert said it was understandable why the RoK wanted to expand distribution networks in Vietnam. The RoK has a developed retail industry, while Vietnam is a market with great potential.
Meanwhile, Vietnamese and RoK cultures have similarities, according to HSBC Vietnam CEO Pham Hong Hai.
Existing RoK retailers have been expanding their operation in Vietnam. In 2014, Lotte opened its first supermarket in Hanoi. In mid-2015, it announced the deal of buying 70% of stake of Diamond Plaza in Ho Chi Minh City.
Most recently, Lotte agreed to pay a deposit and the land rent for Thu Thiem Eco Smart City.
Meanwhile, Emart, the RoK largest retail brand, belonging to Shinsegae Group, has officially set foot in Vietnam, four years after it began eyeing the market in 2011.
The retailer is moving ahead with its project to develop a hypermarket in Go Vap district in Ho Chi Minh City with estimated investment capital of US$60 million.
The branding expert noted that RoK investors believe now is the right time for them to “dig a distribution channel” in Vietnam, after the Vietnam-RoK Free Trade Agreement (VSKFTA) was signed in May 2015.
A report of the Foreign Investment Agency (FIA) showed US$5.49 billion worth of FDI capital was registered in the first half of 2015. The RoK was the biggest FDI investor with US$1.52 billion worth of registered capital, accounting for 27.7%.