"Vietnam's Samsung Vingroup: Will It Succeed in Advancing High-Tech Industries? [Hidden Industry Story]"

Vietnam Stock Exchange Accounts for About 14% of Market Cap
Chairman Pham Nhat Vuong Started from a Noodle Company Established in Ukraine
Expanding into Real Estate, Supermarkets, Resorts... Growing into Vietnam's Largest Corporation
Entering Advanced Manufacturing Sectors Such as Automotive, Pharmaceuticals, and Electronics

Logo of Vietnam's largest conglomerate 'Vingroup' / Photo by Vingroup website capture

[Asia Economy Reporter Lim Juhyung] The economic growth of Vietnam, a leading emerging country in Southeast Asia, has been driven by giant corporations. Among them, the most famous company is Vingroup, nicknamed the "Samsung of Vietnam." How did Vingroup, a mega conglomerate encompassing domestic industries such as real estate, distribution, tourism, and aviation, as well as advanced manufacturing sectors like smartphones and automobiles, come into existence?

◆ Vingroup: A Conglomerate Bridging Private and Public Sectors in Vietnam

The nickname "Samsung of Vietnam" for Vingroup was not earned lightly. According to the list of "Top 100 Vietnamese Companies" selected by the U.S. economic media Forbes on the 31st of last month (local time), Vingroup's market capitalization reached $16.5 billion (approximately 19 trillion KRW).

The combined market capitalization of about 740 top Vietnamese companies listed on the Ho Chi Minh and Hanoi Stock Exchanges amounts to approximately $120 billion (about 130 trillion KRW). Vingroup alone accounts for nearly 14% of the total market capitalization of all Vietnamese companies.

'VinMart' operated by VinGroup / Photo by Yonhap News

In reality, Vingroup's subsidiaries are deeply embedded throughout the Vietnamese economy. These include 'Vinhomes,' a real estate development company; 'VinCommerce,' which covers convenience stores, supermarkets, and electronics stores; 'Vincom Retail,' managing shopping malls; 'Vinpearl Land,' developing amusement parks and skating rinks; 'Vinpearl,' a clothing store; and even companies managing medical facilities like 'Vinmec' and educational institutions like 'Vinschool,' spanning both private and public sectors.

◆ "Vietnamese People Will Start Investing" ? Chairman Pham Nhat Vuong’s Insight

At the heart of Vingroup's success story lies the decisiveness and vision of Chairman Pham Nhat Vuong. Born in August 1968 in Haiphong during the height of the Vietnam War, Vuong grew up in Hanoi and went to study in the Soviet Union, the core of the Eastern Bloc during the Cold War. He was selected as a Soviet government scholarship student and studied at the Moscow Geological Exploration Institute.

However, Vuong's life took a turning point when the Soviet Union collapsed in 1991. He left the chaotic Russia and moved to Ukraine in 1993, where he founded 'Technocom,' an instant noodle manufacturing company. Vuong leveraged his unique business acumen to grow Technocom into a company with annual sales of $100 million (about 110 billion KRW).

In 2000, Vuong returned to his homeland Vietnam and began expanding his business based on Technocom. By 2007, Vingroup had 48 subsidiaries and was listed on the Ho Chi Minh Stock Exchange that same year.

In 2010, Vuong made the decision to sell Technocom, the origin of Vingroup, to the global food company Nestl?. Regarding this decision, Vuong told the British daily newspaper The Independent, "Vietnamese people will not just hide their money under the bed. They will soon start investing in real estate."

This was interpreted as a sign that, thanks to Vietnam's economic liberalization and the rapid growth of the middle class, Vingroup would focus on domestic service industries such as real estate, leisure, and tourism in the future.

Landmark 81, Vietnam's tallest skyscraper owned by Vingroup / Photo by Wikipedia

Vuong’s insight proved to be exactly right. Since then, Vingroup has achieved great success in construction and domestic service sectors, including real estate, commercial offices, and luxury resorts. In particular, in 2018, it reached a pinnacle by successfully opening 'Landmark 81,' the tallest skyscraper in Vietnam with 81 floors.

◆ From Supermarkets and Real Estate to Advanced Manufacturing

In 2017, Vuong’s Vingroup faced another major turning point. It established the automobile manufacturer 'VinFast,' launched the pharmaceutical company 'VinFa' in October of the same year, and followed with the smartphone manufacturer 'Vinsmart' the next year.

These moves by Vingroup are seen as an ambitious leap beyond simple domestic service providers toward advanced manufacturing industries such as automobiles, pharmaceuticals, and electronics.

In fact, in December 2019, the Japanese business media Nikkei Asian Review reported, "Vingroup is shifting its focus from supermarkets to advanced industries."

VinGroup's automobile manufacturer 'VinFast' unveiled Vietnam's first complete car model. / Photo by Yonhap News

At that time, Vingroup CEO Nguyen Binh Quang told the media, "We have decided to change our development strategy to focus on advanced manufacturing," and expressed confidence by saying, "Vingroup already has all the resources to establish and optimize international business."

Vingroup aims to become a global core company in advanced electronic equipment, automobiles, and pharmaceuticals within the next ten years. To this end, it is accelerating global research and development (R&D).

In March 2019, Vingroup established its R&D subsidiary 'VinTech' and opened its first overseas research center in Daegu, Gyeongbuk Province. In the second half of the same year, it also started operating a smart TV factory in the Hoa Lac high-tech industrial park near Hanoi. Additionally, it has attracted investments from SK Group, Hanwha Group, and others, planning to expand R&D facilities in advanced industrial countries such as Japan, Israel, and the United States.

Having grown thanks to Vietnam’s rapidly expanding domestic economy in real estate and supermarkets, Vingroup has now thrown its hat into the global advanced industry value chain. Attention is focused on whether Chairman Vuong’s decisiveness and drive will shine once again.

This content was produced with the assistance of AI translation services.