Foreign Companies Seek Ways to Enter Vietnamese Market
|Vietnam is receiving the attention of a large number of foreign investors.
Savills expert said that after three years of interruption by the Covid-19 pandemic, the global supply chain made positive changes, gradually returning to a stable state.
However, this does not mean that logistics, manufacturing, and other industries have fully recovered. The pandemic and geopolitical upheavals exposed the fragility of supply chains and put a greater focus on resilience. Meanwhile, cost is still the key factor of businesses in the current difficult economic situation.
In the Asia-Pacific region, China is still the "world's factory," accounting for about 30% of global production.
However, according to Jack Harkness, director of Regional Industrial and Logistics Services at Savills Asia Pacific, rising labor costs in China means that the market is no longer as cost-effective as it once was, especially when policies encouraging repatriation of businesses and global security concerns are present.
Many companies with facilities in China are looking to expand, rather than replace existing factories, Harkness said. For example, Apple announced plans to diversify away from China. Siemens also said that it is looking at other locations in Southeast Asia.
Given that situation, countries like Vietnam and Indonesia could benefit, if companies start looking for other low-cost manufacturing hubs in Asia.
Commenting on the trend, John Campbell, associate director of Savills Vietnam Industrial Services said that a large number of foreign investors are interested in the Vietnam market.
“In the northern region, as every year, there is a high demand in the electronics industry. In the South, Savills recorded diverse demand, from logistics, fast-moving consumer goods (FMCG), pharmaceuticals, food, and beverage.
We see an increase in the number of European businesses in Vietnam compared to pre-Covid-19 including Germany and France. This is the result of EU-Vietnam free trade agreements. Other Asian investors are also interested in the southern market."
John Campbell forecasted that the second half of this year will record growth prospects. Despite forecasts of a global economic recession, signals are still expected to be quite positive.
Despite many delays in signing new leases, many foreign companies have been considering Vietnam this year, and they are still seeking to enter the market.
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