Vietnam, officially known as the Socialist Republic of Vietnam, is one of the strongest economies in Southeast Asia region. Vietnam occupies an area of 331,212 square kilometers and is populated around 94.6 million population, based on a census conducted in 2016. The prominence of Vietnam’s economy lies on its success to deliver constant yet significant growth in the 21st century.
Vietnam economy is considered by many to be the fastest growing in the world. Before the 1980s, Vietnam was a considerably poor and under-developed country. Economic reforms in 1986, however, have propelled rapid economic growth and changed the nation’s economic landscape for good. Since then, the country has been in constant transformations and is predicted to be the 20th biggest economy in the world by 2050.
In 2019, Vietnam is anticipated to be growing its GDP by 6.8 percent, only tracing behind Cambodia when compared to the other economies in Southeast Asia. The immense global tensions of trade wars between the United States and China may affect global economic growth, but Vietnam still manages to be growing at a strong measure. Vietnam was the only economy in the region to experience an increase of exports within the second quarter of 2019, while others faced slowdown in its export activities.
Rapid economic development is predicted to remain in the coming years. Vietnamese government has successfully managed to promote domestic business environment and boost private investment to the country. This has led to the strengthening of export-oriented manufacturing, massive amount of incoming foreign direct investment, and well-maintained domestic demand that help Vietnam to sustain its growth’s momentum in the near future. Export-oriented and foreign direct investments remain as the main drivers for Vietnam’s economic growth. High productivity in the service sector and massive agricultural yield also contributes to the increasing GDP in recent years. Foreign direct investment, worth more than USD 3 billion, has been rolled out in the first quarter of 2019. While all the investments gave a significant boost to the economic growth this year, export-oriented manufacturing still has the most exposure from both global and regional investors.
Manufacturing sector plays a crucial role in Vietnam’s economy. Robust domestic demand and increasing global demand have helped to establish Vietnam as a major manufacturing export-oriented economy. Vietnam’s position in the global manufacturing sector also strengthened, as many global companies seek alternative economies to do business amidst the trade war tensions. Compared to any other countries in the region, Vietnam’s economy is the most export-oriented.
Other than manufacturing, agricultural and tourism sectors have strong influence in supporting Vietnam’s economy. The country is widely known as the largest producer and exporter of cashew nuts and black peppers, with around one-third global share for both commodities. It also has high rice production output, trailing behind Thailand as the largest producer of rice in Southeast Asia. Vietnam also grew in an astounding level in tourism sector as the number of tourists increased by almost 30 percent in 2017, making Vietnam as a world renowned tourist destination.
Vietnam’s success in delivering rapid economic growth is linked with Vietnamese government’s past initiatives to build diplomatic relations and establish trade agreements with numerous nations. Various free trade agreements have been signed by Vietnamese delegation to cut and reduce tariffs on exports and imports, with most prominent trade pact being ASEAN Free Trade Agreement (AFTA). Multilateral relationships with EU and Pacific countries are also to be signed in the coming years. In the future, integrations with many other economy will help to strengthen Vietnam’s status as the most export-oriented economy in the region.
Vietnam is an emerging and significant economy in the region. It presents opportunities that can be seized by global as well as regional businesses willing to do their business in the country. Through their free trade pacts with various countries across the globe, business will have a notable competitive advantage to set their business in Vietnam.
Market Research Vietnam seeks to help clients around Vietnam and Southeast Asia. We deliver innovation market consultancy and serves as growth strategy advisory firm. Through comprehensive strategy recommendation and B2B market research, we are willing to support global business and local enterprises to set as well as grow their business in the growing and competitive Vietnamese market.
Market Research Vietnam is fully dedicated to deliver our clients with insightful roadmaps that could be useful to support clients in capturing growth, market share, and profit in Vietnam and wider Southeast Asia region. Our team consists of professionals that always seek to do thorough analysis around industry perspective and market trends, primary research combined with market intelligence, and also collaborations with experienced partners.
Market Research Vietnam services consist of supporting our client in understanding and sizing the desired market landscape, assessing industries, profiling and identifying competitors, understanding supply chains, segmenting distribution channels, conducting investment feasibility study, and finding local suppliers. Through our services, we support our clients to be competitive and effective while doing business in Vietnam.