This information was shared at the conference "The wave of trade and investment from Japan and opportunities for small and medium-sized enterprises" organized by the Hanoi Small and Medium Enterprise Association in collaboration with ONE-VALUE Company on the afternoon of October 4, in Hanoi.

Creating opportunities for connection and international market expansion

Delivering the opening speech at the conference, Prof., Dr. Mac Quoc Anh, Vice Chairman cum Secretary General of the Hanoi Small and Medium Enterprise Association, stated that Vietnam has currently participated in 17 Free Trade Agreements (FTAs), opening up numerous opportunities for international cooperation. Among them, the Japanese market is one of the important markets, with many Vietnamese products present and well-received by Japanese consumers. Conversely, Japanese goods and products are increasingly trusted and favored by Vietnamese consumers.

"In the past, when referring to motorcycles, Vietnamese people often generically called them 'Honda'. This is not only a common term but also a source of pride for many families. Japan is also one of the largest providers of Official Development Assistance (ODA) funds to Vietnam, supporting socio-economic development. This relationship has contributed to enhancing the reputation and position of Vietnamese enterprises in the international market," emphasized Prof., Dr. Mac Quoc Anh.

Currently, Vietnam has approximately 940,000 enterprises, of which Hanoi accounts for about 420,000, and 98.5% are Small and Medium-sized Enterprises (SMEs). This is a large force but of modest scale, making it essential to learn management experience and approaches from major partners like Japan to maximize cooperation opportunities and improve operational quality.

According to Mac Quoc Anh, cooperation with Japanese businesses not only opens up opportunities in the Japanese market but also helps Vietnamese businesses access other demanding markets such as the US and the Republic of Korea. Experience shows that when a Vietnamese product meets the standards to enter the AEON Japan supermarket system, it acts as a "passport" to reach international markets. For instance, the AEON system has introduced many Vietnamese products into its distribution channels, creating significant opportunities for businesses to boost exports and develop trade services.

Mac Quoc Anh also expressed his appreciation to ONE-VALUE and the agencies and associations that have coordinated to organize many effective trade promotion programs. Prior to this, the Japanese side organized a working delegation in Ho Chi Minh City, demonstrating proactive connectivity between businesses of both sides. When Vietnamese businesses supply goods to the Japanese market, having product introduction websites fully translated into Japanese, helping Japanese consumers and partners easily access information, is proof of the practical support from Japan.

Regarding the expectations for the conference, Prof., Dr. Mac Quoc Anh highlighted three main focus areas. First, clarifying the real value of participating in the Japanese market, which is not just about "selling and finishing," but linking the product with the entire value chain, from production and distribution to after-sales services, to create new value and sustainable profit.

Second, identifying and exploiting substantive, long-term cooperation opportunities, especially in the fields of manufacturing, technology, services, and co-creation, based on Resolutions 56, Resolution 57, and Resolution 66 regarding innovation, technology, and international integration.

Third, connecting Hanoi businesses with Japanese partners, organizing meetings, linkages, and technology transfers to help businesses reach out to the international market and leverage Japanese experience in commercial cooperation.

Update on Japan-Vietnam M&A trends

Updating the trends in investment and Mergers & Acquisitions (M&A) between Japan and Vietnam, Phi Hoa, CEO of ONE-VALUE Company, stated that Vietnamese businesses have the opportunity to access capital, technology, and international management experience through M&A deals. This is also an opportunity for the direct connection of the Vietnamese SME community with Japanese investors and partners.

According to Phi Hoa, M&A helps businesses shorten the time to market penetration, bypassing procedures for establishing a new company, applying for licenses, or building infrastructure from scratch. Through a deal, a business can inherit existing customer files, sales channels, and partner relationships. In the context where many sectors in Vietnam do not permit 100% foreign-owned capital, capital contribution or a joint venture remains a legal method for Japanese businesses to engage in commerce.

Japan consistently ranks among the Top 5 largest investing countries in Vietnam. Many Japanese investors execute "mega-deals" with profound influence. The vibrancy in M&A activities between the two countries is not only due to demand from Japan but also based on Vietnam's internal economic potential. However, this activity still faces challenges such as differences in business culture, decision-making styles, mismatched valuation expectations, and a lack of transparent information from Vietnamese enterprises.

Sharing about some key sectors of interest to Japanese investors, Phi Hoa noted that the logistics services industry is a priority sector sought by Japanese investors. Vietnam also stands out with one of the fastest e-commerce growth rates in Southeast Asia, estimated at about 20% annually.

Healthcare is highly valued due to the rapid growth in income and the aging population, which strongly drives the demand for health care services.

Renewable energy has become a top priority for Japanese investors. The main reasons are the rapidly increasing electricity consumption demand and the desire to develop sustainable power sources, which aligns with their long-term investment strategy.

"These are sectors with high growth potential, suitable for the long-term investment strategy of Japanese investors", stated Phi Hoa.

To attract foreign capital, with over 10 years of experience connecting Japanese investors, ONE-VALUE pointed out 5 characteristics that need attention: Financial transparency, standardizing tax and internal reports to build trust with investors; preparing complete legal documentation to reduce legal risks; researching Japanese market tastes, including business culture, communication styles, and product quality; building a risk management system, especially regarding compliance with environmental and labor regulations; and finding a reputable M&A unit to increase the effectiveness of negotiations and exchange. Currently, ONE-VALUE manages over 300 acquisition requests from Japanese businesses, creating many opportunities for direct connection and cooperation for Vietnamese enterprises.

According to the Vietnam M&A report, 2024 recorded 447 M&A transactions with a total announced value of approximately $6.93 billion, focusing on strategic sectors such as technology, healthcare, logistics, renewable energy and financial services. Foreign investors, including Japan, accounted for up to 70% of the transaction value, demonstrating significant demand for the Vietnamese market. This recovery creates numerous opportunities for Vietnamese businesses to access capital, technology, and international management experience.