Many multinational corporations have increased their investment in Vietnam.

Vietnam is currently South Korea’s third-largest export market, after China and the US, and is expected to surpass the US by 2020. Retailers of Korean food and other products are also growing in Vietnam, as there are more than 200,000 Koreans living and working here.

Many multinational corporations have increased their investment in Vietnam. Illustration photo: KT

South Korea increases investment in Vietnam

According to Nikkei, Samsung Electronics and many large Korean corporations such as SK Group... are increasing their investment in Vietnam, in the context of slowing exports due to trade tensions between the US and China.

Specifically, Samsung has just announced spending 220 million USD to build a Research and Development (R&D) Center in Hanoi, expected to open in 2022. Meanwhile, SK Group has decided to invest in VinGroup, cooperating in the field of automobile manufacturing and some other business sectors.

South Korean companies’ direct investment in Vietnam increased 10% in 2019 compared to the same period last year to $7.9 billion. Investment from South Korea accounted for 20% of total foreign direct investment in Vietnam in 2019.

Samsung will conduct research and development on smartphones and other IT products at the planned R&D center. The new center will employ 3,000 local engineers and become one of Samsung's main R&D facilities.

In May 2019, SK Group announced it would buy a 6.1% stake in Vingroup for $1 billion. SK Group sees a wide opportunity for cooperation with the Vietnamese conglomerate. Vingroup is shifting its focus to the auto industry, smartphones and other manufacturing activities, analysts said.

Among Korean companies not operating in the manufacturing sector, KEB Hana Bank (one of Korea's leading commercial banks) signed an agreement in July 2019 to acquire a 15% stake in the Bank for Investment and Development of Vietnam (BIDV), aiming to expand its customer base through BIDV's branch network.

More multinational corporations invest in Vietnam

Amid the trade war between the two largest economies in the world, along with the complicated developments of the Covid-19 pandemic, not only Korea, but many multinational corporations are also more interested in increasing investment in Vietnam.

Mr. Erich Gerber, Senior Vice President of International Sales at Tibco Software.

Recently, the multinational software corporation Tibco Software opened an office in Hanoi, officially marking its presence in Vietnam. Mr. Erich Gerber, Senior Vice President of International Business of Tibco Software shared that although it has been present in Vietnam since 2013, Vietnam has increasingly proven to be an attractive and potential market, with a continuously increasing global innovation index.

Mr. Erich Gerber said that Tibco Software has opened two research and development (R&D) centers in the Asia-Pacific region, one in China and one in Vietnam. The R&D center in Vietnam is the result of the acquisition of Ochestra Networks, a French company providing MDM (Master Data Management) solutions.

Senior Vice President of Tibco Software said that it is not surprising that Vietnam can surpass Singapore in Southeast Asia and become a highly developed digital technology country before 2030.

“The Vietnamese government has set a clear mission for national digital transformation, with the goal that by 2025, 50% of small and medium-sized enterprises will switch to digital platforms and develop at least 100,000 digital technology enterprises. GDP growth is at 6.5%/year, along with the increase of the middle class, which is expected to reach 44 million people in 2020. This is the fastest growth rate in Southeast Asia,” Mr. Erich explained.

Ochestra Networks is one of 20 businesses that Tibco Software has acquired in the past 10 years. Mr. Erich said that Tibco is still looking for opportunities to buy and merge (M&A) other businesses to expand the market, especially in Vietnam./.