Many Vietnamese religiously follow the latest Korean TV drama episode, the newest cosmetic brand release, and the latest K-pop star on Instagram. Many of my Korean friends on my most recent trip to Seoul couldn’t stop praising the food in Vietnam, the rooftop bars that dot the skyline of Ho Chi Minh City, and Da Nang’s famous beaches.
It seems that there is a mutual love relationship between our cultures.
Recognizing these shared interests, the number of new opportunity-seeking Korean businesses, visitors, and expats are larger in Vietnam than ever before.
An entire district, Phu My Hung, in Ho Chi Minh City is known for its Korean-owned residential and commercial developments. And we’re not talking about just the bibimbap corner store and the underground soju bars. There has been a surge in business interests between South Korea and Vietnam in recent years, as highlighted by the 28+ flights a day between South Korea and Vietnam compared to the 11+ flights a day from Japan, the closest rival for regional investment volume in Vietnam.
It can’t be all because of the arranged marriages that’s driving traffic between Seoul and Ho Chi Minh City. Can it?
With an appetite for new investment opportunities, valued at $2.68 billion in 2015, Koreans also bring to Vietnam a proven emerging market investment thesis. Simultaneously, the opportunity to export Vietnamese culture, food, and business to South Korea is just starting.
There’s an estimated 100,000 South Koreans living in Vietnam and that number continues to grow. The number of South Koreans living in Vietnam is only beat by America, United Kingdom, and Australia. There’s an subculture of South Koreans in Vietnam. There’s not much that people outside of the community know about it.
So why are there so many Koreans in Vietnam?
We think there’s one simple reason.
“Vietnam today is a reminder to the common Korean citizen and investor of their own country 20 years ago. Sent to the bottom after a war and a long period of colonization. But it’s ready and eager to bounce back. And they want in on the bounce, before it’s too late.”
As the Economist noted in its recent article entitled ‘The other Asian tiger’: “Which Asian country has roared ahead over the past quarter-century, with millions of its people escaping poverty? And which Asian economy, still mainly rural, will be the continent’s next dynamo? “
The answer is Vietnam. But it could easily also be Japan in the 50s or South Korea in the 60s.
South Korea’s economy was small and mostly agricultural through the mid-20th century. However, the policies of President Park Chung Hee, who gained power through a military coup and stayed in power for 16 years, steered South Korea toward rapid industrialization by promoting large business units called “chaebols.” Chaebols would be responsible for developing new industries, markets, and prioritizing export production.
Samsung, LG, and Hyundai are the largest chaebols in Korea. You might notice the Lotte chaebol-owned hotels and duty free shops that are common throughout Asia. And all of these chaebols have a presence in Vietnam, may it be manufacturing, retail, or technology research and development.
The success of the Korean chaebol strategy helped to define the Doi Moi, or Open Door policy, adopted by Vietnam in 1986. The government has gone on to prioritize an export-oriented economy with large state-owned conglomerates that would be able to drive the nation’s economy in a tight-knit, focused direction. Vietnam’s economic landscape today is dominated by local conglomerates like Vincom and Vingroup.
Can Ho Chi Minh City become the next Seoul? South Korea is an incredible story of growth that has led its country to become one of the most advanced and prosperous nations in the world. South Koreans are hungry for the next golden age, but will be it be found in South Korea? Or does it involve the spread of South Korean business, investment, and culture in countries like Vietnam?