This year marks the 50th anniversary of diplomatic relations between Italy and Vietnam, relations that began in 1973 and have been steadily intensifying over the years thanks to trade and partnership agreements, such as the one signed in 2013, on the occasion of the celebrations for the 40th year of bilateral relations, and the one in 2019 linked to free trade.
Vietnam today is Italy’s leading partner in the ASEAN area, not only in a bilateral perspective but also in the trade perspective of the broader South East Asian regional system. In 2022, trade between the two countries reached an all-time high of $6.2 billion, growing by 11% compared to 2021.
Every year, the country grows at a similar pace to China, and in 2022 it recorded a record GDP growth of 8.02%, making it the highest in the whole of Asia, while growth in 2023 is expected to be 6.3%.
A sign that the Vietnamese economy is getting stronger is the growth of the domestic consumer market thanks to the historic process of strengthening the middle class. A phenomenon that is in full swing and that in the plans of the Vietnamese Communist Party should allow it to enter the top 20 of the world’s largest economies by 2035.
Vietnam: a hotbed of investment opportunity
Thanks to its fast-growing economy, a stable social and political environment, a young population and competitive production costs, combined with free trade policies and a strategic geographical location, Vietnam is a country rich in opportunities for foreign investment.
The growth of the middle class in the population generates demand for higher quality and diversified products from foreign countries. Italy is one of the leaders in Vietnam in the production and distribution of F&B, Fashion and Furniture products (a trend that is expected to grow in the coming years), but at the same time the country is open to more innovative insect investments.
In this context, the key sectors in which Italian companies could consider investing are:
- Manufacturing: Vietnam is benefiting from the side effects of the trade war between the US and China (+13.5% FDI). More and more large international companies are moving part of their production to Vietnam, starting with the electronics giants. Sectors such as clothing, electronics, automotive and precision engineering offer interesting opportunities for Italian companies interested in setting up production or establishing partnerships with local enterprises.
- Agribusiness: Vietnam is one of the main exporters of agricultural and fish products. Italian companies operating in the agri-food sector can benefit from the growing demand for quality products, such as wines, cheeses, olive oil and food processing machinery. The demand for pesticides and fertilisers is also growing in connection with the increase in agricultural production.
- Renewable energy: Vietnam is looking to increase the share of renewable energy in its power generation. There are opportunities for Italian companies specialising in solar, wind and hydro technologies, as well as energy efficiency and resource management.
- Tourism and hospitality: Vietnam is an increasingly popular tourist destination. Italian companies in the hospitality sector, such as hotels, restaurants and tourist services, can take advantage of the increased tourist flows in the country.
- Information and Communication Technologies (ICT): The ICT industry, thanks to government policies, is growing in Vietnam with a focus on the development of software, digital services, e-commerce and Internet of Things (IoT) technologies. Above all, the Vietnamese start-up sector exploded during the pandemic to become one of the most active in South-East Asia. Italian companies with experience in the ICT sector can find investment opportunities.
- Construction engineering: with the growth of industrial construction and increased investment in infrastructure, such as the construction of a high-speed railway running through the country, there will be an increasing demand for machinery and companies specialising in the construction of roads, bridges, commercial and residential buildings, as well as the design and management of large infrastructure projects.
With the aim of facilitating and supporting relations in the cultural, scientific and economic fields between the two countries, in May 2023 the Italy Vietnam Foundation was established, based in Bologna, of which Roncucci&Partners is a founding partner. Roncucci&Partners, thanks to its many years of experience, is at the service of Italian enterprises to facilitate collaboration and the development of projects and initiatives in Vietnam.
At Roncucci&Partners we help companies develop themselves and their business, embrace change and evolve to thrive in a world that is increasingly complicated, insidious and requires great expertise. We do this by applying punctual methods and rigorous strategies, the result of many years of experience and the richness of the numerous success stories we have conducted all over the world. Passion and method are indeed our guides to enhance the present and build the future.