Why Vietnam?

First and foremost, before we look at the business opportunities available in Vietnam, it is important to establish the basis of locating in Vietnam. The business opportunities available in a country will only be attractive if the conditions in that country can justify the investment.

Over the 10-day trip to Vietnam, a number of companies visited have stated the key reasons as to why they have chosen to set-up in Vietnam.

TOTO Vietnam

1. Vietnam's economy is growing at a very fast pace.

2. The costs of operating/setting up in Vietnam is very reasonable (as compared to other countries).

3. The potential of the market is huge, especially over the next 5 to 10 years. Vietnam has a population of approximately 84 million people.

KinderWorld

1. Sizeable opportunity in the education arena

2. Cheaper rental and construction cost in Vietnam as compared to Singapore (KinderWorld started off in Singapore)

3. Stable political situation in Vietnam

Honda

1. Chance to get licence to operate and manufacture in Vietnam

2. Motorbike business viable as majority of the Vietnamese ride motorbikes instead of cars

3. Policy: If there is demand, Honda will produce. (Good to have factory close to customer)

Casarredo

1. Rising costs in Singapore and moving towards high-technology industries, which Casarredo is not.

CT&D Group

1. Central location of HCMC in the region. All major ports and airports are within similar reach from HCMC. Vietnam is the gateway between China and the ASEAN countries.

2. Human resources and fast-growing market. Skilled, motivated and cost-effective workforce. 84 million population with about 50% below the age of 25. High literacy rate of 92%. Each year there are more than 30,000 graduates from HCMC universities. English proficiency on sharp increase.

3. Abundance of natural resources. Agriculture remains important. Mining, oil and gas sectors are on the rise as other large export earning sectors. Gas power supply for the country's growing demand and industrial development. Vietnam is world's #2 rice producer, coffee exporter and #2 seafood exporter to the US.

4. Positive foreign investment environment. Most politically stable country in the region. Government supports investments with pressure for reforms. GDP growth nearing 7% and is set to increase. Main events for growth include, Doi Moi 1986, Normalisation of relations with the USA (1994), BTA with USA (2001), WTO entry (2007).

CONCLUSION

The most prominent factor is the huge market potential of Vietnam. In a country with a huge population, it is easier for a business to secure a substantial market share so as to reap profits. For instance, one product may not appeal to all consumers, but as long as that product is able to attract a segment of the consumer market (84 million people), the profits are significant.