Thai giants continue to bet on Vietnamese market

Thai commercial bank Kasikorn Bank (KBank) has marked its presence in Vietnam with the opening of its first branch in Ho Chi Minh City last week.

Siritida Panom Na Ayudhya, ​assistant governor of the Central Bank of Thailand said, “Amid the global pandemic and other tensions, Vietnam is the fastest-growing economy in Southeast Asia. The sound economic condition reflects a better quality of living for the people and the growing middle-class households. With an increase in trade and investment flows, we foresee that financial services will play an important role to support economic activities.”

The governor added, “We believe that the establishment of KasikornBank’s branch in Vietnam will contribute knowledge and expertise to further develop the financial infrastructure and products to better meet the needs of local customers in both public and private sectors.”

In addition, this event marked the debut of a range of brand-new digital solutions known as K Plus for KBank's clientele in Vietnam. KBank has now established its 11^th foreign branch, which also happens to be its most recent branch outside of Thailand.

Kattiya Indaravijaya, CEO of KBank, emphasised that Vietnam emerges as the rising star in the ASEAN region thanks to the country’s impressive economic growth, stable macroeconomy, and strategic approach towards a cashless society.

“As the most innovative digital bank in Thailand, we have developed a digital lifestyle environment tailored to the needs of Vietnamese consumers by using our in-house, patented K PLUS prototype technology,” said Indaravijaya.

“Beginning with the KBank Biz Loan solution, which is a credit service for smaller-scale retail stores, KBank will continue to concentrate on developing digital payment services and digital loan products, thus contributing to a cashless society. By using our strategic relationships, local investment platforms, and the KASIKORN VISION Investment Fund, we are confident to say that small and medium-sized businesses could access various financial services which fulfil their needs,” she added.

Meanwhile, Central Retail – another Thai prominent investor– last month unveiled its ambition to invest $870 million in Vietnam over the next five years to establish itself as the country's preeminent food and real estate omnichannel retailer.

The funding is being used for four major purposes, including making Central Retail the premier omnichannel platform in food and property in Vietnam, increasing revenues to $2.9 billion, increasing omnichannel sales penetration to 15 per cent, and increasing the company's presence in 55 provinces across Vietnam.

CEO of Central Retail Vietnam Olivier Langlet said, "With Vietnam as one of Central Retail’s key strategic markets, the company has achieved excellent growth with sales reaching $1.1 billion in under 10 years, accounting for 22 per cent of Central Retail’s total sales today.”

Vietnamese Ambassador to Thailand Phan Chi Thanh emphasised at last month’s Investors Promotion Meeting that now is the moment for Thai enterprises to expedite investment and commercial operations in Vietnam, particularly in renewable energy, high-tech agriculture and industrial infrastructure.

Kongkiat Opaswongkarn, general director of Asia Plus Group Holdings PCL, expressed his confidence in Vietnam’s vast potential as a high-quality investment magnet.

Kongkiat also proposed the intention to arrange a group of significant Thai businesses to go to Ho Chi Minh City this month to explore the potential.

In terms of trade relations, Thailand is Vietnam’s largest trading partner in ASEAN, and is ranked as one of Vietnam’s top 10 major trading partners.

Bilateral trade turnover between Vietnam and Thailand has grown significantly in spite of the pandemic.

In 2021, bilateral trade turnover between the two countries reached approximately $19 billion, an increase of 17.9 per cent in comparison with the year 2020.

Outstandingly, bilateral trade turnover reached nearly $8,57 billion in the first five months of 2022. Both countries aim to achieve $25 billion in 2025.

In terms of investor relations, up to May, Thailand was ranked ninth out of the 139 countries and territories investing in Vietnam, with 654 investment projects with the total registered capital of over $13 billion.

Meanwhile, Vietnam had 15 investment projects in Thailand with the total registered capital of over $32 million.

Ayudhya from the Central Bank of Thailand said, “Vietnam and Thailand have a longstanding relationship and close links. We have connected in many aspects including trade, investment, and tourism. Vietnam is ranked as one of Thailand's top five major trading partners, while Thailand is one of Vietnam's top 10 major trading partners. Thailand already has over 600 investment projects in Vietnam and the number is likely to increase.”

The collaboration is not limited to bilateral engagement, but also expands to multilateral cooperation such as the Greater Mekong Sub-Region Economic Cooperation Program and Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy, according to Ayudhya.

Thai enterprises expanding into Vietnamese renewables There has been a rise in interest among Thai businesses and financiers for outbound renewable energy investment in Vietnam over the past few years. Vit Vatanayothin, partner at Baker McKenzie’s Bangkok office, talked with VIR’s Thanh Van about the Thai perspective on this type of investment in the S-shaped country.

Thai investors eye more investment opportunities in Vietnam Vietnam is still a destination for foreign investment, including Thailand because it is a large and growing market, Tanee Sangrat, Director General of the Department of Information and Spokesman of the Foreign Ministry of Thailand, has said.

Thai investors scaling up presence with raft of activities Thai investors are banking on the promising future of the Vietnamese market, with several large conglomerates further increasing their foothold in the country.