In recent years, Vietnam has been earning its title as one of the best markets for growth in Southeast Asia – the buzzing business hub of the world. In 2019, the country was ranked 8th among the 29 best economies to invest in by World Bank, and here are the reasons why:
1. Young and fast-growing market with heightening purchasing power:
In recent years, Vietnam is transforming at a rapid pace. From 2005 to 2016, Vietnam’s GDP per capita tripled from more than $600 per person to almost $2,185, empowering its consumers with significantly more purchasing power. Vietnam has one of the fastest-growing middle-class in the region; the upper-middle income class is predicted to grow from less than 1% in 2011 to almost 10% in 2030. Demand for consulting services into IT, HR and business development has gone up by 40% in the last few years. Vietnam is still in its growing phase and the market is open for business for both start-ups and established entities.
2. Economic and political stability
Although many people still associate the word “Vietnam” was with images of war, destruction and poverty, it is time to change that perception. Vietnam now emerges as a haven for investment. The political situation in many countries has become complicated and uncertain. Foreign investors thus consider moving their capitals and resources to Vietnam, to utilize its social stability, steady economic growth, and increasingly advantageous conditions for doing business. The country’s success in controlling COVID-19 also adds in some attractiveness to the market.
3. Openness for trade
The Vietnamese government has put continuous efforts to open and integrate its local economy into the global economy. Besides being a member of the World Trade Organization (WTO), Vietnam has also participated in many international cooperative agreements, including various free trade agreements (FTA) with a number of regional and global partners. Most recently, Vietnam ratified Regional Comprehensive Economic Partnership (RCEP) in 2020, opening up new opportunities for free trade within the members.
4. Top notch talent and modern infrastructure
Vietnam currently has an ideal age structure, with more than 50% of the population currently in the working age. More than one-third of the total population occupies the urban areas. The average labor productivity for Vietnamese workers continues to increase over the years, narrowing the gap between the country’s labor productivity and the top performers’ in the region. The work force offers a winning combination of the abundance of low-cost general labor and the wide availability of highly competent talented individuals, who master the knowledge of Western/Asian business culture and are eager to join the global force.
In 2020, global citizens are shocked by the news that the high-end Samsung Note20 products are made in Vietnam. Despite the outbreak, Samsung said that its workhorse factories in Vietnam are fully operational.
5. Rich natural resources
Vietnam is also famous for having abundant natural resources, including raw oil, gas, coal, and various mineral resources. It enjoys increased attention from international exploration companies, particularly in the oil and gas sector. The country is also bestowed with other natural wonders and favorable weather patterns to exploit significant hydro-power, wind power and solar power potentials, marine resources, tropical forest, and agricultural potential. These beneficial natural resources act as stepping stones for economic development.
6. Ideal position to do international business
Lying in the heart of Indochina, Vietnam is in a favorable location to reach China, Malaysia, Thailand, Philippines, Hong Kong, Taiwan, Japan, South Korea, and India within a few-hour flight. Furthermore, the long coastal line harbors many world-class deep-water ports. The convenience in transport has made Vietnam a busy transit hub for cargo and passengers.
Overall, the Vietnamese market is still growing strong and has yet to reach maturity. With great potential in both natural resources and human power displayed through these six reasons, Vietnam is gradually positioning itself as the promise land for investors in the Southeast Asia region. Foreign enterprises that enter the market now can benefit from tax incentives and other non-financial support from the Vietnamese government as part of their effort to attract FDI. Well aware of the nation’s immense potential, EloQ Communications wishes to be the middleman of choice for partners to approach their new markets, both foreign and local.
This is an analysis from EloQ Communications. Read the full article with more details and examples on EloQ’s blog.
Dr. Clāra Ly-Le, Managing Director of EloQ Communications. She is a professional PR consultant with many years of experience in executing many successful PR and IMC campaigns in Vietnam and international levels. Her research interests include crisis management in the social media landscape and new media communication.
Hanh Le, Assistant to Managing Director at EloQ Communications. Hanh is supporting EloQ in connecting and maintaining relationships with more than 10 partner agencies in Asia and other global PR networks to execute global projects, as well as to leverage service quality in the communications industry.