Japanese Companies in Vietnam Turn to Non-Manufacturing Industries | Business

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Japanese companies in Vietnam are turning to non-manufacturing industries. (Photo: VNA)

Hanoi (VNA) – There has been a significant increase in Japanese investment in Vietnam non-manufacturing industriessuch as retail, education, healthcare, energy, finance and insurance, transportation and real estate, according to a 2021 Japan External Trade Organization (JETRO) survey of 700 Japanese FDI companies in Vietnam.

Some 51.7 percent of Japanese FDI firms in the manufacturing sector plan to expand operations in Vietnam over the next two years, up 4.6 percent year-on-year, according to the survey. About 58.7% of non-manufacturing companies want to do the same, up from 12.1%.

Japanese companies are increasingly diversifying their business areas in Vietnam, said Hirai Shinji, chief representative of JETRO in Ho Chi Minh City. Before, most Japanese companies in Vietnam operated in the manufacturing sector, he said, but now FDI flows into food production, fast-moving consumer goods, retail and real estate are increasing.

There is a shift from manufacturing to non-manufacturing sectors, Shinji told Investment Review. This is a huge shift by Japanese investors to consumer goods and retail from industrial production, he added.

Although input and labor costs have increased in Vietnam in recent years, they are relatively lower than in Japan. Vietnamese workers are also considered dynamic and highly productive.

Numerous Japanese companies in IT and retail Sectors, for example, which have relatively higher labor costs, are growing and expect to expand their business in Vietnam, he said.

AEON Vietnam General Manager Furusawa Yasuyuki said there are major changes in the way Vietnamese consumers shop as a result of COVID-19, which has a significant impact on e-commerce and demand. basic necessities.

Japanese companies see these changes as an opportunity, so retail investment will definitely increase, he noted on the sidelines of the Investment Promotion Conference held by the Investment Promotion Center ( IPC) from South Vietnam to Ho Chi Minh City earlier this month.

“Vietnam has achieved encouraging economic growth, so I think many Japanese companies are planning to invest in Vietnam,” he said.

He added that the service, equipment and consumer goods industries have enormous growth potential in Vietnam, given the country’s rapid population growth, good economic prospects and improved living standards of the population. population./.

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