More Thai retail companies have entered Vietnam over the past two years and are proving popular with consumers, while asking questions of less competitive local rivals.
Speaking at a recent business forum in Hanoi, Somhatai Panichewa, Director of Thai-invested Amata Dong Nai Company said more Thai have had to expand their operations abroad because of the domestic instability the country had experienced in recent years.
Thai footwear companies came to HCM City recently
Production costs in Vietnam are lower than in Thailand and Vietnam’s annual retail sector growth of 15%, combined with government investment incentives is proving attractive.
“Thai goods may be 10% to 20% more expensive than Vietnamese products, but they have still sold well. The establishment of the ASEAN Economic Community and good opportunities presented by Vietnam signing up to several new free trade agreements has encouraged Thai investors,” Panichewa said.
A delegation of 40 Thai footwear and garment companies has recently come to HCM City to seek investment opportunities. Thai firms have also eyed investment opportunities in the city for support industries, food, plastics and cosmetics.
Pham Hong Hai, Director of HSBC Vietnam said Thai companies have also expanded their investment into petrochemistry; building materials and fashion in Vietnam.
Trade deficit pressure
HCM City resident Nguyen Minh Phuong said that she liked Thai products although their prices were higher.
Vu Vinh Phu, Deputy Director of the Hanoi Trade Department, said that many large Thai groups such as CP, BJC and the Central Group were present in Vietnam and had joined firms from South Korea, Japan and the US in increasing the competitiveness of Vietnam’s retail market.
Bilateral trade between Vietnam and Thailand has also grown, but Vietnam has incurred a large trade deficit. Last year, Vietnam exported only USD3.5 billion worth of goods, while it imported up to USD7.1 billion of goods from Thailand in return.
