An influx of manufacturing – prompted by companies seeking to diversify supply chains away from China – has made Vietnam the fastest-growing economy in the region.
French investment bank Natixis has projected economic growth of 7.5 percent in 2022 for Vietnam, which it described as “the economic rockstar of Asia in 2022, if not the world,” with accelerating growth “thanks to robust retail sales, exports, and investment.”
“Its policy of investing in infrastructure, from transport to energy, to be more competitive for manufacturing, has paid off,” noted a recent Natixis research paper. “Along with relatively cheap wages, Vietnam’s improving hard infrastructure, along with its aggressive trade liberalization policy, from the Vietnam-E.U. free-trade agreement to regional trade pacts, have made it the go-to destination to diversify supply chains from China.”
At the same time, foreign investors have soured on China due to the country’s zero-COVID policy as well as Chinese government attempts to regulate private-sector elements of its economy, such as internet commerce. Investors are also worried about the impact of an ongoing real estate debt crisis on Chinese growth.
As a sign of Vietnam’s growing economic attractiveness, Singapore-based seafood operator Jumbo Seafood has opened its first franchised outlet in Hanoi. Featuring 6,373 square feet of space and three VIP rooms, the Hanoi outlet is Jumbo’s fourth in Vietnam.
Before the pandemic, Jumbo had bet big on growth in China, where it opened restaurants in major cities. In 2018, Jumbo announced an expansion into China’s smaller regional cities to tap into increased growth outside the country’s first-tier cities, but China’s restrictive COVID policies, which created hardships for its foodservice industry, led the company to pull back on its China plans and instead seek out opportunities in Southeast Asia, particularly in Vietnam.
“We believe in the potential of the regional markets, such as Vietnam, which are backed by a sizeable consumer base who appreciates quality Singapore seafood cuisine,” Jumbo Seafood CEO and Executive Director CEO Ang Kiam Meng said in 2021. “We are actively exploring further growth opportunities with existing and new franchise partners to expand our regional presence.”
Photo courtesy of Jumbo Seafood
