VietNamNet Bridge - Analysts have noted new characteristics of the current Japanese investment wave in Vietnam: more capital flow to retail, food supply and finance services.

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The Japanese investment wave, led by financial institutions, has begun partly because Japanese cannot find opportunities in their home market and they are trying to avoid risks in China. In addition, they have huge cash on hand accumulated, thanks to Abenomics. 

More Japanese retailers, food suppliers

Research institutes have found that a new wave of Japanese investment has kicked off, heading for business fields like food supply, retail, real estate, transport and finance instead of manufacturing as in previous years.

A representative of the Japanese General Consulate in HCM City believes that many Japanese style restaurants will open as Japanese cuisine has become familiar to many Vietnamese.

JETRO also noted that the number of Japanese restaurants in Vietnam has been increasing. Marukame Udon, PIZZA 4P’S, Tokyo Town and Japanese-style fried chicken restaurants all have appeared in the market.

According to JETRO, as the Japanese market diminishes, Japanese food supply chains have to make investments overseas. They see great opportunities in Vietnam, where the community of Japanese expats has become larger because of increased Japanese investment.

The distribution sector has also seen an increased presence of Japanese retailers, including Family Mart, Ministop, Daiso, Akuruhi and Tokutokuya.

Aeon, one of Japan’s largest retail chains, has a major investment plan in Vietnam. 

It announced it will pour $2 billion into 20 shopping malls in Vietnam, while it has already invested $500 million into two centers in HCM City and Binh Duong Province, and another to open soon in Hanoi. It has also bought 49 percent of Citimart and 30 percent of Fivimart shares.

Yasuo Nishitohge from Aeon Vietnam confirmed that Aeon is expanding its business in Vietnam as it sees the country as a promising market with 90 million consumers and a high percentage of young consumers.

Pouring big money into real estate, finance sectors

A JETRO report shows that the number of Japanese-invested real estate projects in Vietnam has been increasing rapidly, from 3 percent in 2013 to 6 percent in 2014. The investment capital in the sector increased from 2 percent to 13 percent.

Tokyu, which has teamed up with Vietnamese Becamex IDC to develop the $1.2 billion Tokyu Binh Duong City, has expressed its interest in a project on developing infrastructure for Suoi Tien station of subway line No 1 in HCM City. 

Japanese financial institutions are now strategic partners of Vietnam’s largest banks, like Vietcombank and Vietinbank. Nineteen Japanese banks have signed cooperation agreements with Vietnamese BIDV on serving Japanese clients who have business activities in Vietnam.

TBKTSG