Over 56% of Japanese enterprises plan to expand business in Vietnam

Vietnam continues to be one of the most attractive destinations in ASEAN for Japanese businesses, despite post-pandemic economic challenges.

Capital flows from Japan into Vietnam continue to increase steadily through direct investment channels and mergers and acquisitions. In the photo: production at Saigon Food Company, a company acquired by Maruha Nichiro Group - Photo: KD

According to the latest survey results conducted by the Japan External Trade Organization (JETRO), 56.1% of Japanese enterprises in Vietnam expressed their intention to expand their business within the next 1-2 years.

This figure helps Vietnam maintain its position in the top group of ASEAN markets where Japanese enterprises prioritize expanding their operations, thanks to growing export demand and a gradually strong recovery of the domestic market.

The survey also showed that 64.1% of Japanese enterprises in Vietnam expect to achieve profits in 2024. Although this rate decreased by 9.8 percentage points compared to the previous year, this is still the highest level in the past 5 years, since before the COVID-19 pandemic in 2019.

In addition, the 2025 forecast shows optimism as 50.4% of businesses believe the business situation will "improve", while only 9.2% are concerned that it will "deteriorate". In 2024 alone, the proportion of businesses expecting improved profits will reach 48.8%, an increase of 16.8 percentage points compared to 2023.

Manufacturing firms attributed the improvement in profits to "increased export market demand", while non-manufacturing firms noted a recovery from "domestic market demand".

Japanese companies are focusing on expanding their sales functions in Vietnam, with a 62.2% share driven by growth in export demand and domestic purchasing power. Vietnam is not only a manufacturing hub but also an important consumer market for Japanese products and services.

Although the average salary in Vietnam is ranked at the average level in the region, the salary increase rate is among the highest, reaching 5.4% in 2024. This change reflects the competition in attracting high-quality human resources in Vietnam, especially in the non-manufacturing sector - where the salary gap between countries in the region is insignificant.

JETRO also said that this preliminary report is only focusing on three main contents: business profit prospects, future business development plans, and wages. Other important contents such as production relocation, competitive environment, and import and export will be announced in detail in January 2025.

Source: https://tuoitre.vn/tren-56-doanh-nghiep-nhat-tinh-mo-rong-kinh-doanh-tai-viet-nam-20241215143512423.htm