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Viet Nam
Industrial Park Situation
Text by Saito Hiroshi
The 5th: "Trends in investment by Japanese companies"
Trends in investment by Japanese companies: I would like to summarize the presentation by Mr. Nakajima, the director of JETRO Hanoi office, at the “Investment Seminar for Japanese Companies” hosted by the Provincial Government of Hung Yen Province in northern Vietnam on September 27th.
- GDP growth rate of ASEAN countries:
According to the 2023 forecast, Vietnam is tied for the top spot with the Philippines, both projected to grow at 6.0%, among the 10 ASEAN countries. - Business expansion plans of Japanese companies:
According to the Japanese headquarters, Vietnam ranks second at 26.5% as a potential future business expansion destination, following the United States at 29.6%. Among ASEAN countries, Thailand stands at 18.0% and Indonesia at 13.3%. - Future 1-2 year business development direction of Japanese companies in each country:
In terms of the proportion of Japanese companies planning to expand their business in the future, India tops the list at 72.5%, followed by Bangladesh at 71.6%, and Vietnam ranks third at 60.0%. - Expectations for market growth in Vietnam
- B2B: Expansion of business-to-business transactions. Geographical diversification. Expansion of sales functions.
- B2G: The North-South Expressway targets to be completed by 2025. The largest non-tariff zone in Vietnam is under construction in Haiphong. Promoting decarbonization through new technologies such as LNG, renewable energy, ammonia, and hydrogen. Digitalization of government administration and public facilities.
- B2C: After the COVID-19 pandemic, companies like MUJI, Matsukiyo, and ABC-Mart have established new operations. AEON Mall (6 stores) and UNIQLO (17 stores) have further expansion plans. The e-commerce market size is 1/10 of the physical retail market. Japanese restaurants are estimated to have increased to around 2,500 nationwide. With rising incomes, consumption of livestock products and alcohol is increasing, while rice and vegetable consumption is decreasing. Health and safety consciousness is also on the rise.
5. Summary / Key points for observing the future economy and investment .
- Domestic economy:
The economy shows signs of moderate improvement. Low growth will continue, but there will not be a major downturn, and gradual growth will be maintained. Production activities, face-to-face services, tourism, and IT/digital sectors are stable. - Trade and overseas markets:
Vietnam is taking on a role as one of the “world’s factories”. The trend of partial transfer and contract manufacturing from China remains robust. In line with the recovery of the global economy, the turnaround may come sooner? (Especially for consumer goods) - Direct investment:
Investment is expected to increase in new sectors such as semiconductors, medical devices, EVs, logistics, and data centers. The development of highways and industrial parks in the provinces is progressing, and this “closer image of the provinces” is expected to lead to more companies expanding into areas with lower land prices. Factory and internal DX (digital transformation) is also expected to advance.
齊藤公(Saito Hiroshi)
Business Advisor
G.A. Consultants Vietnam Co., Ltd
After graduating from university, he joined a PHP research institute and served as the head of the New York office. He then worked on the “Nagoya Port Redevelopment Project” at a subsidiary of the Chubu Nippon Broadcasting (CBC) company. He later shifted his base to Asia, where he was involved in the launch of “FM96.3” in Singapore, and the creation of “Hello Vietnam” and “Invest Asia” magazines in Vietnam. He then joined BW Industrial Development JSC, Vietnam’s largest rental factory development company, where he was responsible for attracting Japanese manufacturing companies. Currently, he is active as a consultant for the entry of Japanese companies at “G.A. Consultants”, one of the longest-standing Japanese HR consulting firms in Vietnam.
