Japanese shift investments to service sector

Analysts said that Japanese FDI (foreign direct investment) had decreased in industrial sector but was showing growth in the service sector.

A recent report of the Japan External Trade Organization (JETRO) showed that the Japanese FDI in manufacturing projects decreased by 15%, while capital poured into the distribution and retail sector increased from 14% in 2014 to 17%.

The number of projects registered in the hotel and food sector has increased thanks to  regulations on foreign investors’ operation in the field which took effect in 2015. Eleven projects were registered in the year, which accounted for 4% of total number of projects.

Aeon, the Japanese largest retail chain, after opening three supermarkets in Hanoi, HCM City and Binh Duong, has begun building a new shopping mall in HCM City. 

japanese shift investments to service sector hinh 0
Sources said Aeon’s representative had working sessions with Hanoi’s authorities on the establishment of its second shopping mall in the capital city which has estimated investment capital of US$200 million.

Meanwhile, 7-Eleven has announced it will open its first shop in Vietnam in 2017 and develop 100 convenience stores in Vietnam within three years before it has 1,000 stores after 10 years.

Nojima Corporation, another retail chain, has also jumped into the Vietnamese retail market after buying 10% of stake of Tran Anh, a home appliance distribution chain.

The figures show the changes in Japanese FDI tendency in Vietnam, which coincides with reports about increasingly high consumption level of the domestic market.

JETRO’s Chief Representative in Hanoi Kawada Atsusuke believes that the tendency would continue in the time to come as Vietnam has become Japanese investors’ great interest. 

Japanese investors have been flourishing in Vietnam, which is a reason for many Japanese businesses to scale up their production. 

Fifty% of businesses can see great development potential if they expand business.

The figure shows Japan’s high satisfaction level about Vietnam as an investment environment: higher than Thailand (49%), Malaysia (44.6%) and China (38%).

Japanese capital keeps flowing into other business fields as well, including textile and garments as investors can see the great potential for them to exploit the Trans Pacific Partnership Agreement (TPP) and the Vietnam-EU Free Trade Agreement.

Japanese have poured capital into projects on making synthetic fiber, support materials and weaving and dying in the areas near HCM City. 

Nikkei news service reported that besides the advantages in preferential tariffs, Japanese also highly appreciate Vietnamese workers’ experience and skills.

In the latest news, JX Nippon Oil & Energy announced it would buy 10% of stake of Petrolimex, a petroleum distributor which now holds 60% of the market share.

Vietnamnet

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