Thais taking firm steps towards Vietnamese market
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VietNamNet Bridge – The business fields that Thais have poured money to in Vietnam – infrastructure, building materials, retail, consumer goods, food and automobiles – are all fields with great potential.
MAF’s research team, in its latest report, pointed out that the merger and acquisition (M&A) in 2015-2016 will still focus on consumer goods, finance & banking, real estate and retail. However, the investors from Thailand will be the major buyers.
Thai investors have many reasons to come to Vietnam. It is not only a large market with increasingly high demands, but also serves as a ‘jumping board’ for them to access neighboring markets.
In the retail sector, Central Group in early 2015 spent $100 million for a 49 percent stake of Nguyen Kim, a home appliance distribution network, and announced a plan to turn the network into the leading distribution chain of its kind in South East Asia.
Commenting about Thai investment strategy, a branding expert said Thais have been following a professional investment strategy based on their knowledge about local culture and habits.Meanwhile, Berli Jucker stirred up the public with the announcement about taking over Metro Cash & Carry Vietnam at $879 million. Prior to that, BJC bought Family Mart and 65 percent of Vietnamese Phu Thai Group.Central Group plans to open 50 Nguyen Kim shops by 2019, twice as many as the existing number of shops. Prior to that, Central Group established Robins, a high end retail chain in Vietnam.
“SCG, after buying Prime Group, now controls Vietnam’s building material industry with 20 percent market share.”
The investors have drawn up clear roadmaps for penetrating the Vietnamese market: they know well when and what they should do to acquire Vietnamese businesses – an important move in their plan to conquer the Vietnamese market.
The branding expert also noted that the Thai capital flow to Vietnam comprises capital from billionaires with Chinese origin. Charoen Sirivadhanabhakdi, the owner of ThaiBev, BJC and TCC Holdings, and Dhanin Chearavanont, chair of CP Group, are of Guang Dong origin. Meanwhile, the Chirathivat family which owns Central Group, is of Hainan origin.
Thai investors are mostly targeting most important and potential business fields in Vietnam.
The retail sector, for example, is predicted to have annual growth rate of 15 percent with total revenue of $97 billion by 2016, according to Economist Intelligence Unit. Meanwhile, CP Vietnam has been succeeding in the animal feed market worth $6 billion a year, and the animal meat market worth $18 billion.
Thai investors, who have powerful financial capability, tend to take shortcuts to Vietnam by acquiring Vietnamese leading enterprises. SCG, after buying Prime Group, now controls Vietnam’s building material industry with 20 percent market share. The investments in two Vietnamese leading plastics manufacturers – Binh Minh and Tien Phong Plastics – promises to help SCG cement its position in the industry.
Questions & Answers
Q.Which business sectors are Thai investors primarily focusing on for mergers and acquisitions in Vietnam?
Which business sectors are Thai investors primarily focusing on for mergers and acquisitions in Vietnam?
MAF's report indicates that M&A activity in 2015-2016 will concentrate on consumer goods, finance and banking, real estate, and retail sectors. Thai investors are expected to be the main buyers in these areas.
Q.What significant retail acquisitions have Thai companies made in Vietnam recently?
What significant retail acquisitions have Thai companies made in Vietnam recently?
Central Group acquired a 49% stake in Nguyen Kim for $100 million in early 2015, planning to expand its distribution network. Berli Jucker also took over Metro Cash & Carry Vietnam for $879 million, after previously buying Family Mart.
Q.What is the projected growth and revenue for Vietnam's retail sector?
What is the projected growth and revenue for Vietnam's retail sector?
According to the Economist Intelligence Unit, Vietnam's retail sector is predicted to achieve an annual growth rate of 15%. This growth is expected to result in a total revenue of $97 billion by 2016.
Q.How are Thai investors generally approaching market entry into Vietnam?
How are Thai investors generally approaching market entry into Vietnam?
Thai investors tend to enter the Vietnamese market by acquiring leading local enterprises, often described as 'taking shortcuts'. This strategy allows them to quickly establish a strong market presence and cement their position in various industries.