The third wave of RoK investment in Vietnam

The investment projects registered by RoK investors in the past few years are a part of the third RoK foreign direct investment (FDI) wave in Vietnam, following the first in the 1990s and the second in 2000s.

The third wave is believed to be quite different from the previous ones. 

Instead of pouring money into manufacturing projects under which investors make garments, footwear and electronic products for export to other countries, Koreans have changed their mind, considering Vietnam the target market for their products and services.

The Vietnamese car market now witnessed the increasing popularity of RoK brands such as Kia and Hyundai. A report of the Vietnam Automobile Manufacturers’ Association (VAMA) showed that Kia has the second largest sales just after Japanese Toyota.

No longer underrated in power and durability, RoK car brands now catch Vietnamese attention as new models with integrated modern features and competitive prices have been launched recently.

However, analysts pointed out that RoK enterprises have been expanding their business in fields where Vietnamese businesses have a competitive edge.

The domestic cinema market, for example, has been dominated by two big Korean names – CGV and Lotte Cinema-, with their networks reaching out to every corner. 

CGV and Lotte Cinema networks accounted for 60% of the market by the end of 2015. The power of distributing blockbuster films is now within Korean hands, despite the great efforts by Vietnamese cinema networks such as BHD, Galaxy and Platinum.

Korean brands have also become popular in the food market. Lotteria, CJ Foodville, F&B, Caffe Bene and My Cay Han Quoc have put pressure on Vietnamese food chains such as Huy Vietnam and Golden Gate Group.

In 2015, Emart, one of RoK's largest retail chains, opened its first hypermarket in Vietnam in an ambitious plan to expand its network throughout Vietnam in upcoming years. 

Prior to that, Lotte Mart, another RoK supermarket chain, stated it would open 60 supermarkets in Vietnam by 2020, and if so, it would become the second largest supermarket chain in Vietnam, just next to Coop Mart. 

RoK was the biggest foreign investor in Vietnam in the first five months with US$3.42 billion.