Kwak Yeon-soo is a digital editor at The Korea Times creating, editing and curating digital content for the newspaper’s website, mobile app and social media. She previously covered a diverse array of cultural, political and business topics.
Nongshim, Ottogi eye Vietnamese market
A customer picks up Korean instant noodles at a supermarket in Seoul. Korea Times file
By Kwak Yeon-soo
By Kwak Yeon-soo
Korean instant noodle companies are increasing their investment in Vietnam in a bid to accelerate entry into Southeast Asia, according to industry officials Sunday.
Compared with the past, when products were simply exported, companies are now building subsidiaries or factories to expand sales.
Total consumption of instant noodles worldwide reached 103.6 billion in 2018, of which about 80 billion, or 80 percent, came from Asia, according to a World Instant Noodles Association (WINA) report.
Among Southeast Asian countries, Vietnam is the world's fifth-largest market with an estimated 5.2 billion packages of instant noodles consumed, and the popularity of Korean brands has been growing.
Vietnam was ranked second in instant noodles consumption per capita, with 53.5 packages eaten annually on average. Korea was in first place with 73.7 per person.
A recent report from the state-run Korea Agro-Fisheries & Food Trade Corporation cited increasing exports of Korean instant noodles.
“South Korean companies' exports of ramen to Vietnam quadrupled to $13.7 million in 2017 from $3.3 million in 2013,” the report said.
Nongshim, a leading Korean instant noodle maker, established its first subsidiary in Vietnam last October, with the aim of improving local distribution and expanding sales to large-scale supermarkets and convenience stores.
“Vietnam will be positioned as a base for advancement to Southeast Asia,” a Nongshim official said. “We believe the country has huge potential for growth backed by a population of about 100 million.
“Although instant noodle sales in Vietnam are relatively weak compared with other subsidiaries like China, the U.S., Japan and Australia, they are growing fast.”
Nongshim Vietnam reported 3 billion won ($2.5 million) in sales and 160 million won net income in the first half of this year.
Ottogi said it would boost sales and increase brand awareness in the Vietnamese market in cooperation with well-established Korean retailers like E-mart and Lotte Mart.
“Vietnam has all the requisite elements . . . a large consumer base, rapidly rising incomes and a love for spicy food,” an Ottogi official said.
“Last year, food companies faced tough business conditions due to strained bilateral ties with China. That made us shift our focus to Vietnam to make inroads into Southeast Asia.”
Ottogi has one production facility in Hanoi, which specializes in manufacturing condiments like ketchup and mayonnaise. Last year, the company broke the ground for a second plant near Hanoi.
“Whether we will build a new plant for instant noodles depends on how well our products, like Jin Ramen or Yeol Ramen, sell in Vietnam,” the official said. “Right now, instant noodle sales in Vietnam only account for about 10 percent of our entire sales.”