New trends for Japanese FDI in Vietnam

10.05.2017

VietNamNet Bridge – Japanese investors are now eyeing non-production sectors, such as the retail industry.

The presence of Aeon Mall and Takashimaya and their expansion of networks in Vietnam show the attractiveness of the retail sector.

Aeon Mall alone has four shopping malls in Vietnam, while it is moving ahead with the plan to build the fifth one in Ha Dong district in the suburbs of Hanoi.

Yukio Konishi, CEO of Aeon Mall Vietnam, said on national television channel VTV that one shopping mall should be opened for every one million people. Aeon plans to open 10 shopping malls in Hanoi and HCMC each.

Meanwhile, Nikkei on May 1 reported that the retailer from Japan is preparing to increase the number of grocery stores in Vietnam by nine times to 500 stores by 2025.

As such, Aeon, well known for large shopping malls, will also set up small shops in large quantity, which require lower investment rates, to increase its presence in Vietnam. 

Though they are called ‘grocery stores’, they have the scale of small supermarkets.

Prior to that, many convenience store chains such as Family Mart and Ministop opened up stores in the Vietnamese market. And according to Nikkei, 7-Eleven, one of the world’s largest convenience stores, will open its first shop in Vietnam in February 2018.

VTV cited a report of the Ministry of Planning and Investment (MPI) as reporting that 560 Japanese invested projects were registered in Vietnam in 2016, of which the number of projects in hotels and food services increased by twofold.

Meanwhile, the number of projects in the manufacturing sector has seen a sharp decrease. Some analysts said the Japanese economic growth has slowed down in recent years, which has caused Japanese large conglomerates to become more reluctant when making investment decisions.

Atsusuke Kawada, chief representative of JETRO (Japan External Trade Organization) in Hanoi, also commented that Japanese investment now tend to shift to non-manufacturing sectors, including agriculture, and the investment flow is mostly from small and medium enterprises.

Japanese FDI to Vietnam expected to bounce back

Japan is the second largest foreign investor in Vietnam with 3,355 projects capitalized at $42.4 billion registered so far. However, the FDI flow from the country has been slowing down in recent years. 

In the first three months of the year, only $450 million worth of Japanese FDI capital was registered, and Japan ranked fifth among the biggest foreign investors.

However, Dau Tu commented that this could change after the working visit to Japan by the Vietnamese Minister of Planning and Investment Nguyen Chi Dung in mid-April to promote investments.

Source: Vietnam.net

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