Vietnam is emerging as a major market for Korean goods on the strength of strong sales of Korean cars and mobile handsets, the Ministry of Strategy and Finance said Monday.
In a report on the 20th anniversary in which Korea forged formal ties with Vietnam, the ministry said the middle-class consumers in Vietnam were showing greater appetite for Korean products and that the Vietnamese government was encouraging Korean firms to enter the local market.
The Vietnamese economy has been growing between 5 per cent and 8 per cent a year, a heady expansion that helps give the country’s middle class greater purchasing power.
“The Vietnamese market is becoming more important than ever for Korea as it’s a crucial gateway country in the Asia-Pacific market,” the ministry said. “To promote cooperation with Vietnam further, Korea should draw up a set of plans customized for the Vietnamese market.”
Vietnam is an economic hub that offers a key logistical channel to Asean countries, China and India.
The Finance Ministry said that Vietnam’s demographics were rapidly changing in a way that offered more business opportunities for Korean makers of consumer goods. It expects the proportion of low income earners in the population will fall to 27.7 per cent by 2020, down from about 80 per cent recorded in 2009.
The ministry projected that sales of mobile handsets will surge to 31 million units by 2015.
On the back of the growing consumer market, Vietnam has become the eighth-biggest export destination for Korea. Over the past decade, Korea’s exports to Vietnam jumped eightfold, with the volume reaching $13.6 billion last year.
Vietnam accounts for 19 per cent of Korea’s exports to ASEAN, the second-biggest volume after Singapore.
Vietnam’s demand for Korean textiles, steel plates and resins has also steadily increased in recent years.
Business conditions in Vietnam continue to improve, the ministry said, as the Vietnamese government is spearheading policies designed to attract more foreign investment.
Korea ranked second in direct foreign investment into Vietnam by injecting a total of $24 billion as of December.
The sweeping popularity of Korean pop culture in Vietnam is also helping Korean companies to do business under largely positive consumer views on Korean products. About 10 per cent of Vietnamese TV programmes are devoted to broadcasting Korean drama series amid heightened interest about the Korean language and culture.
