Ok-Market Chairman Ko Sang-goo speaks throughout an interview with The Korea Instances in Seoul, July 23. Korea Instances picture by Choi Gained-suk
Korean meals merchandise have drawn international consideration, with sure product labels like Buldak sparking a uncommon shopper frenzy and on-line fandom motion transcending nations and borders. From instantaneous noodles to snacks, baked items, fruit and manufactured seafood, Korean meals merchandise have grow to be strategic gadgets for retailers outdoors Korea.
Ok-Market in Vietnam, a community of 150 instantly managed medium-sized supermarkets, focuses on Ok-foods and different Korean merchandise. The biggest Korean-run retailer within the nation additionally operates a logistics middle in Ho Chi Minh Metropolis and Hanoi, facilitating product distribution to shops within the nation’s largest financial hubs within the northern and southern areas.
Having run Ok-Marketplace for 20 years, Chairman Ko Sang-goo, nevertheless, worries concerning the firm’s future. On the battlefront within the nation’s retail business, the enterprise guru compares himself to a Korean soldier combating international retailers in Vietnam. He now sees Japanese and Chinese language manufacturers scaling up within the nation’s retail sectors and rising their market shares. To him, Korean merchandise are now not a market driver. Seeing international retailers from different East Asian financial powerhouses stirring the native market in Vietnam, he now fears Ok-food shall be overshadowed.
“Hallyu is now not protected in Vietnam. It’s going to by no means final ceaselessly,” Ko mentioned in an interview with The Korea Instances in Seoul. “Japan, China and Thailand have expanded companies there. And the way a lot they’ve scaled up is simply uncanny. It’s opposite to how Korean corporations are loosening their grip in Vietnam. Have a look at Emart, which has bought whole shares of its Vietnamese subsidiary to Vietnam’s Thaco Group, giving up its enterprise within the nation.”
Aeon Mall is a transparent instance threatening Korean merchandise in Vietnam. Japan’s Aeon Group has launched 9 massive Aeon Malls in Vietnam, and three every round Hanoi, Ho Chi Minh Metropolis and Da Nang. Every mall has supermarkets and a meals court docket crammed with Japanese meals. The group mentioned it’ll develop the shops to 100 by 2030. Sumitomo Corp.’s FujiMart is one other main Japanese retail model within the nation, a grocery store chain collectively invested by Vietnam’s BRG Group. Now concentrated round Hanoi, FujiMart, in response to the Japanese operator, will enhance to greater than 50 places by 2028. FamilyMart and Aeon Group’s Ministop are main comfort retailer manufacturers working regionally with Japanese labels.
Aeon Mall in Vietnam on this undated picture / Screenshot from Aeon Group’s homepage
Chinese language corporations have additionally launched main retail manufacturers in Vietnam. Miniso, an on a regular basis merchandise retailer with inexpensive costs, is seen inside main native buying malls, the place it has launched merchandise in collaboration with Sanrio and Disney. Mixue has now established greater than 1,000 ice cream and milk tea chain shops, whereas Alibaba Group’s Lazada and TikTok Store are main e-commerce platforms there.
“Aeon Mall is big, nearly twice the scale of Lotte Mall in Hanoi. Vietnam’s Thaco Group, in the meantime, nonetheless makes use of the Emart model however when their contract ends in 9 years, Thaco will almost definitely cease utilizing the Korean model and I doubt Emart will reenter the nation. Giving up Vietnam means giving up the huge Southeast Asian market,” Ko mentioned.
Ok-Market has grow to be a barometer retail platform in Vietnam, in response to Ko, verifying Korean merchandise’ native recognition sooner than rival retailers and drawing corporations wishing to promote by way of Ok-Market. He mentioned that along with Lotte Mart, Ok-Market is at present the final main retail platform in Vietnam distributing Korean merchandise.
“We now have seen Aeon Group’s MaxValu grocery store chain and FujiMart opening proper subsequent to our shops as a result of our shops’ areas have excessive marketability. Their shops all the time bustle with younger customers,” Ko mentioned.
Authorities’s position
Ko mentioned he has been shouldering monetary burdens from operating the corporate on his personal with out the mandatory assist from the Korean authorities. To him, this can be a drawback on a nationwide scale which have to be mounted on behalf of different Korean-run personal corporations working abroad. He in contrast the issue to Japan the place the federal government applied a scientific enterprise mannequin during which corporations energetic abroad obtain enough monetary assist from the federal government in order that they’ll proceed increasing.
Clients store inside a Ok-Market retailer in Vietnam on this undated picture. Courtesy of Ok-Market
Ko’s ire focused the Korea Agro-Fisheries & Meals Commerce Corp. (aT), an company underneath the Ministry of Agriculture, Meals and Rural Affairs that’s devoted to accelerating international commerce of Korean agricultural and seafood merchandise. He mentioned the company has been neglecting its position of supporting exports by not offering enough advantages to Korean corporations working abroad similar to Ok-Market.
“For Korean corporations abroad, state-run commerce facilitators like aT should present monetary assist similar to low-interest loans or commerce companion matchmaking to allow them to hold increasing. However the company has to date been reluctant to commit loans to us, demanding numerous eligibility circumstances. As a result of lack of presidency assist, I needed to spend 50 billion gained ($35 million) of my very own cash to construct the logistics facilities in Hanoi and Ho Chi Minh Metropolis. These services will assist different Korean corporations export to the ASEAN area,” Ko mentioned.
Ko in contrast the Korean authorities’s negligence to the Japanese authorities and its trade-boosting businesses together with the Japan Exterior Commerce Group, J-Bridge and the Japan Worldwide Cooperation Company. He mentioned these Japanese businesses collectively present Japanese corporations energetic abroad with incentives and monetary security nets in order that their international enterprise enlargement will be sustained.
“Mortgage curiosity in Vietnam was over 8 p.c which was a really excessive price. Though Korean authorities businesses offered low-interest loans to non-public corporations in Korea, Korean corporations energetic abroad like us haven’t skilled these advantages. In addition they required Korean corporations abroad to fulfill so many circumstances for loans or reducing of rates of interest. In the meantime, mortgage curiosity in Vietnam spiked from a bit over 4 p.c to over 8 p.c because of the United States’ struggle with Iran. I’m now busy paying again curiosity to banks with out incomes a lot and investing in my enterprise,” Ko mentioned.
Merchandise fill the cabinets of Ok-Market’s logistics middle in Ho Chi Minh Metropolis on this undated picture. Courtesy of Ok-Market
“Japanese businesses, alternatively, are going all out supporting Japanese corporations abroad, offering loans with no curiosity, offering a assure for loans and involving Japanese manufacturers each time signing partnerships with Vietnamese corporations to advertise their very own nationwide manufacturers to native customers. That’s why Aeon Malls are crammed with Japanese manufacturers. When aT signed a partnership in 2024 with Vietnam’s Mega Market to place extra Korean merchandise on their cabinets, it depressingly jogged my memory of the truth that the Korean company didn’t make related effort for Korean corporations in Vietnam like us. Give it some thought. When Korean retailers abroad like us are destined to promote Ok-foods, Vietnamese retailers can cease promoting Korean merchandise and change to different nations’ merchandise each time they need. I do not perceive why aT signed that partnership with Mega Market as a substitute of us.”
Ko met Korean Minister of Agriculture, Meals and Rural Affairs Tune Mi-ryung in Vietnam in July and agreed to share Ok-Market’s logistics facilities and native commerce networks for rising exports of Korean merchandise to Vietnam and different ASEAN nations. The deal demonstrated Ok-Market grew to become a important software for the Korean authorities in increasing Korean exports to the ASEAN areas.
“Logistics is an expressway for retail distribution, particularly in Vietnam. The longitudinally elongated nation is true subsequent to Cambodia and Laos and their commerce is generally completed by land. We constructed the logistics facilities in Hanoi and Ho Chi Minh Metropolis minding the significance of land-based transportation in Vietnam and connections to Phnom Penh and Vientiane,” Ko mentioned.
“Cambodia’s latest struggle with Thailand has made Cambodia a possible marketplace for Korean corporations as a result of Thai corporations have shut down their operations in Cambodia together with 7-Eleven and Cafe Amazon. If the Korean authorities dedicated precise assist to Korean retailers in Vietnam like us, it might be a very good alternative for us to develop our Ok-food companies to Cambodia.”
