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Korea's consumer goods firms are shifting their overseas focus to Vietnam as their business in China reaches its limits, increasing investment and aggressively opening new branches, according to industry watchers on Monday.
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 Korean government is pursuing expansion of consumer goods exports to Vietnam to make up for the country's slowing trade, describing Vietnam as a good opportunity for local firms.
CJ Group, whose affiliates range from entertainment to food and beverages, made an early start, opening 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 South Korea and China. It is currently engaged in seven different sectors and maintaining its top position in three of them -- bakery, home shopping and movie theaters.
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.
The group produces some 700,000 tons of animal feed a year and, according to company officials, it has started to look into the local livestock industry. Last year, it partnered with Sumitomo of Japan to step into the milling market.
"We will be proceeding with our active investment in Vietnam across different industries," a CJ official said. "We will expand the scale of investment, such as increasing milling factories, to raise our market status in Vietnam."
Korea'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. The 19,273-square-meter facility will add a seven-screen multiplex cinema in July. After venturing into the Asian country in 2008, Lotte chalked up 217 billion won ($190 million) in sales last year.
The conglomerate continues to enlarge its market presence there, opening the Lotte Center Hanoi in September 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, 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 the 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. (Yonhap)
