More S. Korean firms eye Vietnamese market
Most of the South Korean firms surveyed want to invest in the local market, said Hong Sun, vice chairman of the Korea Chamber of Business in Vietnam (KorCham). Firms in the manufacturing industry as well as those in the fields of retail, food and foodstuff plan to expand their businesses in Vietnam.
A group of South Korean startups on a recent visit to Vietnam seeking business cooperation opportunities expressed their desire to tap the potential of the thriving local market where items made in South Korea are popular, reported Nguoi Lao Dong newspaper.
Sales of South Korean cosmetics and fashion products in the local market and other Southeast Asian countries are on the rise and are expected to surge impressively in the coming years, helped by modern sales tools, according to the startups.
Data released last year by the Business Studies and Assistance Center show that the percentage of Vietnamese people purchasing South Korean products had risen from below 3% in 2017 to 10% in 2018, with the number of local consumers selecting South Korean confectionary and drinks increasing 12% year-on-year.
Products made in South Korea have won the confidence of Vietnamese consumers because of the impact of South Korean culture on Vietnam, especially HCMC, which is home to a large community of South Korean expatriates.
South Korean products have increasingly been shipped to the local market with the support of advanced technology over the past two years. In addition, many stores set up to serve South Koreans residing in Vietnam have attracted local customers too.
Besides this, several supermarkets and convenience stores chiefly selling South Korean items such as LOTTE Mart, Emart and GS25 have been flourishing as well. K Mart, a supermarket chain mainly selling products made in South Korea, has built a logistics center in Hanoi and aims to expand its business scale to HCMC and Danang.
Since the two countries signed the Vietnam-Korea Free Trade Agreement, thousands of imported South Korean items have seen reduced taxes or tax exemptions. Apart from that, on average, three South Korean firms set up businesses in Vietnam per day, said the vice chairman of KorCham.
Some retail experts said that South Korean firms had applied methodical business strategies in tapping the local market, first by introducing South Korean movies and culture and then through the game of football to promote their country to the Vietnamese people.
Further, data from the General Statistics Office revealed that Vietnam had imported US$19.1 billion worth of South Korean products during the year up to May, up 0.7% versus the year-ago period.