Unlocking Growth: Top 4 Sectors for Smart Investing in Vietnam 2024

As we step into the promising landscape of 2024, the allure of investment in Vietnam beckons. This Southeast Asian gem continues to captivate savvy investors with its dynamic markets and robust economic growth. From the bustling tech hubs to the thriving manufacturing sector, Vietnam presents a canvas of opportunities.

In this blog post, we’ll explore the sectors poised for growth, offering insights into why considering and investing in Vietnam might be a strategic move for those seeking a fruitful and diverse investment portfolio.

Why Investing in Vietnam? Top 7 Strengths Making Vietnam an Ideal Place for Investment

1. Strategic Trade Agreements

Investing in Vietnam is a smart move due to its active involvement in various Free Trade Agreements (FTAs). As a member of ASEAN, Vietnam has established key agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), and the EU-Vietnam Free Trade Agreement (EVFTA).

With ongoing negotiations for future FTAs, Vietnam is committed to expanding global economic partnerships, making it an attractive destination for businesses seeking international trade advantages.

2. Vibrant Workforce

Vietnam boasts a promising workforce of approximately 60 million individuals. The labor force, growing at over 1 million annually, is youthful and dynamic. With 35% of the workforce belonging to Generation Y with competitive minimum wages, investing in Vietnam becomes enticing for businesses looking to tap into a skilled and cost-effective labor pool.

3. Industrial and Economic Zones

Vietnam’s Economic Zones (IZs) and Industrial Parks (IPs) strategically positioned across the country offer a conducive environment for manufacturing and investment. These zones provide robust infrastructure, efficient logistics, and attractive tax incentives. As IZs expand, especially in regions like Hai Phong and Binh Duong, investment in Vietnam’s evolving industrial landscape becomes a dynamic opportunity for foreign investors.

4. Political Stability

Vietnam’s stable political system ensures a supportive environment for businesses. The government actively enhances business policies and infrastructure development, showcasing a commitment to fostering economic growth. Foreign direct investments continue to flow into the country, emphasizing Vietnam’s dedication to being a prominent destination for strategic investments in the ASEAN region.

5. Growing Consumer Demand

Investing in Vietnam is particularly attractive due to its fast-growing consumer demand. As the nation’s economy evolves, consumers exhibit changing preferences and higher standards across sectors like education, healthcare, and leisure. This surge in demand presents significant opportunities for businesses to cater to a discerning and affluent consumer base, making Vietnam a promising frontier for strategic investments.

6. Strategic Location for Global Trade

Vietnam’s strategic location at the crossroads of major international trade routes positions it as a gateway to Asia-Pacific markets. Proximity to big economies like China, Japan, Singapore, etc. , coupled with active participation in regional trade agreements, enhances Vietnam’s appeal. Investors benefit from reduced transportation costs and time, fostering seamless connectivity and logistical advantages.

7. Dynamic Market and Open-minded Consumers

Investing in Vietnam is appealing due to its dynamic market and open-minded consumer base. The nation’s economic landscape is characterized by rapid growth and adaptability, providing investors with a dynamic environment conducive to success. The open-mindedness of Vietnamese consumers fosters innovation and market penetration, making Vietnam a strategic choice for those seeking adaptable and lucrative investment opportunities.

>>> Dive deeper into Top 7 Reasons Making Investment in Vietnam a Wise Choice.

Investing in Vietnam – Promising Sectors to Consider

1. Semiconductor Manufacturing

Vietnam’s semiconductor sector is witnessing a notable increase in Foreign Direct Investment (FDI), with global companies recognizing its potential. The recent report from the Bank of Korea emphasizes Vietnam’s emergence as a pivotal market for South Korean semiconductor manufacturers. This trend gains significance, particularly amid a slowdown in chip demand in China.

Investing in Vietnam‘s chip industry has yielded substantial results, as reflected in a remarkable 74.9% increase in revenue from exporting semiconductor chips to the US over the past year. Vietnam now stands as the third-largest contributor, comprising 10% of semiconductor exports to the US, trailing behind Malaysia and Taiwan.

The nation’s appeal lies in its abundant low-wage workforce and strategic proximity to the Chinese market, prompting international businesses, especially those from South Korea, to establish manufacturing facilities in Vietnam. This is evident in major smartphone manufacturers setting up production bases in the country, utilizing Korean semiconductors as intermediary goods.

The attractiveness of investing in Vietnam is further underscored by its growing importance in the global semiconductor manufacturing market. The influx of FDI and the country’s robust chip industry growth position Vietnam as a key player, solidifying its role on the international stage.

Read more about Vietnam’s semiconductor manufacturing industry:

• Newly-Rising Semiconductor Manufacturing Industry In Vietnam: The General Landscape
• Driving Innovation: The Powerhouse of Semiconductor Manufacturing in Vietnam

2. IT Services and Digital Transformation

Vietnam’s tech landscape is swiftly progressing, drawing attention from investors keen on exploring opportunities amid the digital revolution.

The nation’s vibrant youth and expanding internet accessibility provide an ideal environment for emerging tech ventures, particularly in e-commerce, fintech, health tech, and edtech. Besides, the surge in government initiatives towards a digital economy amplifies the potential returns for those considering investing in Vietnam.

In short, Vietnam’s expanding pool of skilled professionals, coupled with governmental backing for tech innovation, positions the country as a rising tech hotspot in the region. For those contemplating investing in Vietnam, the prospects are promising, given the conducive atmosphere for growth and the ongoing support for technological advancements.

3. Investment in Vietnam with Healthcare and Pharmaceuticals

As Vietnam’s population ages and its middle class expands, the need for quality healthcare services and pharmaceutical goods is growing. The country is currently revamping its healthcare sector, creating investment opportunities. Investment in Vietnam’s healthcare offers potential in areas like hospitals, medical equipment manufacturing, pharmaceutical production, and telemedicine.

Foreign investors are drawn to Vietnam’s pharmaceutical and healthcare sectors due to the aging population and heightened health awareness. A notable instance is Thomson Medical Group’s acquisition of a controlling stake in Phap Viet Hospital for a record-breaking US$381.4 million. This transaction, reported by Dan Tri, reflects the increasing interest in Vietnam’s healthcare market.

Singapore businesses are taking the lead in investing in Vietnam‘s healthcare. Thomson Medical Group’s significant upfront payment of about 359.6 million USD for Phap Viet Hospital underscores the appeal of this sector.

To add-in, additional payments of 21.8 million USD are contingent on FV Hospital meeting specified criteria. Notably, Bloomberg has previously hinted at Thomson Medical’s discussions with Quadria Capital for the acquisition of FV Hospital.

Overall, the current landscape underscores the attractiveness of investing in Vietnam‘s evolving healthcare sector.

4. Consumer Goods and Retail

With the expanding middle-income group and evolving consumer habits, there’s been a notable surge in the consumer goods and retail domains. Those looking at investing in Vietnam can explore possibilities in retail chains, consumer electronics, fashion, and fast-moving consumer goods.

In particular, Vietnam’s growing middle class and shifting consumption behaviors are drawing foreign investments into the retail and consumer goods sectors. Investment in Vietnam presents opportunities in supermarkets, convenience stores, fashion brands, and fast-moving consumer goods.

Besides, the country’s changing economic landscape and increasing urbanization contribute to the appeal for investors eyeing the retail and consumer goods sectors. Investing in Vietnam allows participation in the flourishing retail chains that cater to rising consumer demand.

In short, the dynamic nature of the market, coupled with evolving consumer preferences, opens avenues for investments in consumer electronics and fashion brands. Additionally, the fast-moving consumer goods segment remains a lucrative option for those interested in investing in Vietnam, given the changing lifestyle patterns and growing purchasing power.

In conclusion, the landscape of Vietnam’s economic growth in 2024 holds exciting opportunities for savvy investors. With sectors like technology, healthcare, and consumer goods, and manufacturing gaining momentum, the potential for substantial returns is evident.

By strategically investing in Vietnam, one can tap into the country’s vibrant market and contribute to its thriving economy. As the nation continues to embrace innovation and sustainable practices, it becomes increasingly clear that investment in Vietnam is not just a financial decision but a commitment to being part of a dynamic and promising future.

New to Vietnam? Follow us at CORE5 Vietnam to stay updated with the latest news and insights about the industrial real estate market here.