Appetite for local food sector

The rent of space to food services traders in Ho Chi Minh City sharply hiked in recent years, particularly in prime business districts like in the areas surrounding Ben Thanh market and Le Thanh Ton road in District 1, or Truong Dinh and Cao Thang roads in District 3.

In fact, scores of investors willingly paid broker fees equal to one to two months rent still found it hard to become owners of places which were bustling business districts to lease out to foreign investors, according to director Nguyen Quoc Dung at Ho Chi Minh City-based property firm Proland Company.  

Pursuant to Vietnam’s commitments to World Trade Organization (WTO), eight years after Vietnam’s admission into WTO, foreign investors will be liable to lease space in the country to trade in food and drink services.  

Though three years remain until the undertaking comes into force, many investors from Japan, South Korea, China or Singapore, through a variety of means, have made preparations to jump onboard Vietnam’s lucrative food industry.

Director of a restaurant chain in Japan Takayuki Hisano said he was about to jump into food services trading in Vietnam.

“I will pump $1.5 million into opening Japanese-style restaurants in Ho Chi Minh City downtown areas like Districts 1, 3, 4, Phu Nhuan and Binh Thanh,” said Hisano.

He assumed foreign investors leaped into Vietnam’s food industry would be likely after trade limitations were removed conforming to WTO undertakings.

Sim Hong Boon, a Singaporean investor, assumed food services traders held choosing business space suited firms’ development strategies of special importance.

“We willingly pay large amounts for procuring or leasing a good space waiting for the advent of opportunities,” he said.

In respect to ‘preparation steps’ of foreign investors, industry insiders assumed competition was part of international integration and local firms must prove their capacity right in the home ground.  
“Sooner or later foreign players will join the race. How will local players react - willing to compete head-on or trying to keep toes in a passive manner - is important,” said general director Vo Ngoc Quang at Thao Moc Corporation, the owner of Thao Moc restaurant chain.

“To develop, local players need to take an approach modern, yet suitable to local food traditions. That is what makes them stay competitive to foreign players,” Quang added.