Vietnam remains key market of interest for Singaporeans
Vietnam remains key market of interest for Singaporeans
Given Vietnam’s economic potential and large domestic market with a growing middle class, the country is a very attractive investment destination for Singapore companies as they seek to go overseas to diversify their businesses, expand, and capture new opportunities.
This can be seen from our strong investment and business interests in Vietnam. Singapore was the leading foreign investor in Vietnam for 2021 and the first six months of 2022, with the total direct investment contributions of more than $10.7 billion and $4.1 billion, respectively.
Vietnam was the top country for Singaporean companies to explore overseas expansion in both 2021 and 2022, according to the Singapore Business Federation’s National Business Survey, where more than 30 per cent of companies surveyed indicated that Vietnam is a country that they would be keen to venture into for business expansion in the future.
The top sectors for Singapore’s investments in Vietnam are manufacturing, real estate, and wholesale and retail trade. The financial and insurance services sectors are also emerging as a strong draw for Singapore groups in Vietnam.
With the easing of the pandemic and resumption of cross-border business activities, Enterprise Singapore (EnterpriseSG) continues to see the potential for investments and collaborations between Singapore and Vietnamese companies in several areas.
The growing manufacturing sector in Vietnam, boosted by its connectivity to consumption hubs in the region and the push to advance its manufacturing capabilities, presents new opportunities for Singapore companies to offer expertise and participate in Vietnam’s manufacturing transformation journey.
On this front, EnterpriseSG is supporting Vietnam-Singapore Industrial Park and also Becamex IDC to set up a Vietnam-Singapore i4.0 Innovation Centre within Eastern International University in the southern province of Binh Duong.
The centre is also supported by Vietnam’s Ministry of Planning and Investment (MPI), Singapore Polytechnic, and Singapore-based Smart i4.0 Transformation Alliance. It will offer training, consultancy, and products and services from Singapore solution providers to help manufacturers adopt manufacturing automation solutions for operational efficiency and to build a future-ready workforce to support future growth.
In view of Vietnam’s growing middle class and rising purchasing power, there are strong opportunities in consumer goods and services. EnterpriseSG is supporting Singaporean food and retail companies to accelerate their market entry through both online and offline channels.
For example, we have appointed food and beverage distribution company L’Earth as a partner which has enabled 25 Singaporean food companies to expand into Vietnam, providing them support in areas including logistics consolidation, regulatory clearances, product listings, and in-market promotions.
Due to Vietnam’s rapid urbanisation, the infrastructure sector is expected to grow at a compound annual growth rate of approximately 4 per cent between 2020 and 2025.
There is potential for Singapore-based companies to work with Vietnamese corporates to provide financing, technology, and operating expertise for projects in the areas of green energy, smart cities, waste management, and wastewater treatment infrastructure.
For example, Sembcorp Industries and Vietnam’s Bamboo Capital Group are collaborating together to develop a pipeline of up to 1.5GW of wind and solar projects in Vietnam.
As Vietnam seeks to boost digitalisation and innovation across the country, the government has launched several platforms to support the adoption of digital solutions by Vietnamese businesses.
For instance, the MPI and its Agency for Enterprise Development are taking part in an ongoing initiative which aims to help at least 100 relevant enterprises adopt digital transformation by 2025, while the Ministry of Information and Communications also announced a support programme for around 30,000 businesses in digital transformation.
EnterpriseSG is exploring collaborations with these platforms so that Singapore’s digital solution providers can offer their solutions to Vietnamese businesses as they embark on their digital transformation journeys.
Meanwhile, Vietnam today boasts the third-largest startup ecosystem in Southeast Asia, behind Singapore and Indonesia, with four unicorns and more than 3,800 startups in the country. Total funding invested into Vietnamese startups also reached a new high in 2021 of $1.3 billion.
Through our Global Innovation Alliance network, we aim to introduce Singaporean startups and tech companies to engage with Vietnam’s innovation ecosystem to foster more cross-border innovation collaborations between the two.
Similarly, EnterpriseSG and the National Agency for Technology Entrepreneurship and Commercialisation Development, under Vietnam’s Ministry of Science and Technology, have an ongoing partnership to promote and encourage the collaboration of both countries’ private sector and tertiary institutions to take startup and innovation collaboration and exchange to a higher level.
Through our two overseas centres in Hanoi and Ho Chi Minh City, EnterpriseSG will continue to connect Vietnamese and Singaporean companies so they can explore collaboration opportunities across both countries.
