Korean firms shift overseas business focus to Vietnam
The Republic of Korea’s (RoK) consumer goods firms are shifting their overseas focus to Vietnam, increasing investment and aggressively opening new branches, Yonhap news agency quoted industry watchers in an article on May 2.
The Lotte Centre in Hanoi
In its article, Yonhap says with a population of over 90 million and 60 percent in their 30s or younger, Vietnam stands out as a market promising robust growth.
A recent report by the Korea Trade-Investment Promotion Agency said the RoK government is pursuing the expansion of consumer goods exports to Vietnam to make up for the country's slowing trade. It describes Vietnam as a good opportunity for local firms.
CJ Group, whose affiliates range from entertainment to food and beverages, made an early start when it opened an office in Vietnam in 1998. The group's chairman, Lee Jay-hyun, declared in 2012 that the conglomerate will build a "third CJ" in Vietnam following the RoK and China.
In February, it took over Ong Kim's, a popular kimchi brand in Vietnam. A month later, it acquired a 4.08 percent stake in the country's meat manufacturer Vissan and is planning to obtain more.
According to company officials, it has started to look into the local livestock industry.
Yonhap quoted a CJ official as saying that they will be proceeding with active investment in Vietnam across different industries. They will expand the scale of investment, such as increasing milling factories, to raise their market status in Vietnam.
The RoK's retail giants, Lotte and Shinsegae, are also strengthening their foothold in Vietnam.
Lotte Mart opened its 12th Vietnamese branch in Go Vap, an urban district of Ho Chi Minh City, last week. After venturing into the Asian country in 2008, Lotte chalked up 217 billion won (190 million USD) in sales last year.
The conglomerate continues to enlarge its market presence there, opening the Lotte Center Hanoi that includes a Lotte Mart, Lotte Department Store and Lotte Hotel, in addition to acquiring a local department store, the Diamond Plaza.
In Ho Chi Minh City, the company is building an eco-smart city that combines a shopping mall with residential and office facilities.
Shinsegae is making most of its strides through its discount chain E-Mart, whose first Vietnamese branch opened late last year in Go Vap district. Vietnam is the chain's second overseas entry after China.
E-Mart officials say they hope to eventually export products directly to Vietnam, according to Yonhap.