Vietnam tops Southeast Asia in rate of Japanese firms eyeing expansion

By Vien Thong December 12, 2024 | 11:09 pm PT

Customers attend the launch of Uniqlo's 26th store in Vietnam in HCMC's District 8, Nov. 8, 2024. Photo courtesy of the company

Over 56% of Japanese firms operating in Vietnam plan to expand in the next year or two, the highest rate for any Southeast Asian country, a survey has found.

This figure represents a 0.6-percentage-point decrease from last year but is still enough for Vietnam to surpass Laos, the previous top market, according to a survey on Japanese firms operating overseas in the fiscal year 2024 by the Japan Trade Promotion Organization.

All retail and food services businesses in Vietnam said they plan to expand. The rates are 48% for manufacturing firms and 63% for non-manfacturing companies.

Japanese businesses said they want to invest more in Vietnam in the next few years to capitalize on its growing domestic demand and exports.

Some 49% of them expect their performance this year to exceed that of 2023, up 16.8 percentage points from last year's survey, the highest increase among ASEAN countries.

The rate expecting to be profitable in 2024 rose by 9.8 percentage points to 64.1%, the first time in five years it has exceeded 60%.

Japanese firms are projected to hike salaries by 5.4% in Vietnam this year.

"Vietnam’s salaries are in the average range for the region, but its salary growth rate is among the highest," the survey noted.

According to the Ministry of Planning and Investment, Japan was the fifth largest investor from among 110 countries and territories in the first 11 months of 2024 at US$3.61 billion, or 11.5% of total foreign direct investment.