Japanese In Vietnam: Little Tokyo in Vietnam

I recently hosted a Japanese guest on Airbnb. She told me she was visiting Vietnam for the thrill of the motorbike, the spring rolls, and most importantly: because there’s a lot of nonstop flights from Tokyo’s Narita Airport.

Perhaps most clear about the Japanese presence in Vietnam is in central Ho Chi Minh City. The Japanese and Vietnamese flags are displayed prominently next to each other at the construction site of the new main station of the new multi-billion dollar metro development led by Japanese investors.

Hotels, restaurants, and bars that cater to the Japanese salaryman dot the Le Thanh Ton area of Ho Chi Minh City. In the evening, the small alleyways that are attached to the main road are reminiscent of a typical night in Tokyo, but instead located in the heart of central Ho Chi Minh City. One of the most popular and respected restaurants in Vietnam, Pizza 4P’s, is owned by a Japanese family.

While Japan’s investment into Vietnam is only half that of South Korea now, we should remember that Japan was one of the first non-Eastern bloc countries to reestablish diplomatic ties after the Vietnam War. After agreeing to pay war reparations for World War II, the Japanese quickly opened an embassy in Hanoi in 1975. Japan’s amount of foreign aid sent to Vietnam in 2012 also peaked at $3 billion dollars, with many pointing out that Japan’s foreign aid volume to Vietnam is four times more than its next largest peer South Korea. The Japanese population in Vietnam is also significantly smaller than the Korean population, 10,000 compared to 100,000.

While for-profit investment has not grown as fast, Japan’s strong public alliance with the Vietnamese government has highlighted a geopolitical preference to counterbalance a common regional rival: China.

Vietnam’s government is also taking a page out of the keiretsu model for economic growth. Much like the chaebols of South Korea, Japanese household conglomerates like Mitsubishi and Mitsui control entire verticals in various industries, creating a tight knit direction for Japan’s forays into the global economy.

From a cultural level, Vietnamese also strongly prefer Japanese made products. Food and product quality are perceived to be the best, while there is a great appreciation for Japanese craftsmanship and design. Japanese also see Vietnam in a positive scope, with many associating Vietnam as the easiest and most attractive destination for the traditionally isolationist Japanese social values.

So what does all of this mean for the greater Japan-Vietnam relationship?

We think there will be steady investment into Vietnam from Japan, while the opportunity to continue exporting Vietnamese culture, brands, and ideas into Japan is just starting.

One of our most recent interviews with Marou Chocolate, a popular and well-crafted Vietnamese chocolate brand, has noted that Japan was one of their first and continues to be one of their most successful international launches.

While Vietnam itself is still rough around the edges, the steady modernization of Vietnamese brands should put the country’s best products in a strong position to leverage existing strengths to find a greater influential place in a country like Japan, which places high value on well-crafted products.