Japanese Prime Minister Yoshihide Suga’s selection of Vietnam as his first abroad vacation spot after taking workplace exhibits that “Vietnam is without doubt one of the most necessary nations for Japan on the earth,” mentioned Takahisa Onose, a Japan enterprise companies companion with auditing agency Ernst & Younger Vietnam. Onose has been working in Vietnam for 9 years.
Amongst 30 Japanese firms that have been chosen to be sponsored to extend manufacturing in Southeast Asia, 15 have chosen Vietnam to ascertain or develop their enterprise, and that is proof that Japanese firms are paying rising curiosity in doing companies in Vietnam, he advised VnExpress.
A number of Japanese retail firms like Uniqlo and Muji are in search of to develop their operations in Vietnam. Final week, Japan’s largest beauty and pharmaceutical retailer chain Matsumoto Kiyoshi established its first outlet in Ho Chi Minh City.
Japan’s largest retail chain AEON additionally considers Vietnam a key market and plans to have 25 malls within the nation by 2025 with an funding of as much as $2 billion.
Nishitohge Yasuo, CEO of AEON Vietnam, mentioned that Vietnam’s benefits are a excessive GDP development and a big inhabitants (as much as 100 million by 2025) with rising earnings.
The nation’s ratio of contemporary retail gross sales space per capita is decrease than different nations, he added.
Different trade insiders say Vietnam’s younger labor inhabitants is one other perk as this yr marks the eleventh consecutive yr that Japanese inhabitants has decreased.
Moreover, knowledge from Goldman Sachs exhibits that Vietnam has aggressive labor prices with the minimal wage in Hanoi and HCMC at $190 per 30 days in comparison with $360 in China’s Shanghai.
The a number of free commerce agreements that Vietnam has signed may assist it keep away from the impacts of rising protectionism around the globe, thereby making it a protected haven for multinational producers. Its shared border with China can be a bonus.
These components are why Japanese firms have been rising their presence in Vietnam. The East Asian big had 4,600 lively direct funding initiatives in Vietnam as of September with a complete registered capital of almost $60 billion, rating second behind South Korea.
A report final yr by the Japan Exterior Commerce Group (JETRO) confirmed that 66 % of Japanese corporations have been making revenue in Vietnam and 64 % deliberate to develop their presence within the nation.
Vietnam’s success in containing the novel coronavirus is one other plus for Japanese corporations trying to make investments or develop operations htere.
Shimizu Akira, chief consultant of the Japan Worldwide Cooperation Company Vietnam Workplace (JICA), mentioned Vietnam has to this point been capable of obtain its two objectives of maintaining the Covid-19 scenario below management and sustaining financial development on the similar time, whereas Japan nonetheless information round 500 new instances every day.
For Vietnamese companies, too, Japan presents a market stuffed with potential.
Vu Ba Phu, director of the commerce promotion company below the Ministry of Trade and Commerce, mentioned the 2 nations have a supportive commerce relationship as Japan has excessive demand for agriculture, seafood, garment and footwear merchandise, that are Vietnam’s key export gadgets, whereas Vietnam wants high-tech items from Japan.
Japan’s imports from Vietnam solely account for 3.1 % of its whole, and this implies there’s loads of room for development, he mentioned.
“Many Japanese firms have been establishing their crops in Vietnam to export merchandise again to their nation lately,” he added.
For instance, exports of AEON from Vietnam to Japan elevated from $250 million in 2017 to $370 million final yr. This consists of clothes and agriculture produce like espresso and fruits.
Nevertheless, Japanese companies count on additional enhancements within the enterprise setting in Vietnam, specialists say.
Akira of JICA mentioned that Vietnam wants to offer extra intensive coaching to its labor power to allow them to take part in high-skilled manufacturing operations.
“Coaching a brand new technology of employees with excessive abilities and experience is a key process for now,” he mentioned.
Different challenges for Japanese corporations embody the shortage of clear administrative procedures and free implementation of legal guidelines and laws in Vietnam.
Phu of the commerce ministry mentioned Vietnamese exporters ought to increase their product requirements to fulfill Japanese customers’ calls for, like larger hygiene in meals exports.
Punctuality, professionalism and a radical understanding of Japanese tradition are different components that Vietnamese exporters want to achieve the belief of Japanese companions, he added.
Throughout his official go to to Vietnam ending Tuesday, Japanese PM Suga signaled intent to strengthen financial relations with Vietnam by signing 12 agreements to spice up ties in economic system, setting, public infrastructure, healthcare, agriculture, and vitality.
The 2 nations have agreed to restart two-way flights as they cope with Covid-19 impacts.