Growth in Vietnam's Entertainment Sector Attracting Foreign Investors - Vietnam Briefing News
An investor who visits the Megastar Cinema in Vincom City Tower in Hanoi will likely be met by large crowds. A visit to the West Lake, passing through the Ho Tay water park, will generate a similar experience.
By Jonathan Choppin
Jul. 12 – The entertainment industry in Vietnam is showing increasing potential and positive indicators like growing cinema audiences and an increasing number of karaoke venues, western-style bars and nightclubs. Much of this industry’s growth, which tripled in value between 2004 and 2009, can be attributed to the country’s stable economy. On the whole, the entertainment industry will play an important role in Vietnam’s economy through jump starting investment in infrastructure and providing sources of employment.
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It is unlikely that domestic demand for entertainment-related goods and services will slow in the near future. A key demographic in this market is the country’s youth, who demonstrate increasing purchasing power and are a large market in Vietnam where 62.4 percent of the country’s population is below 35 years old. Looking at existing facilities, it is clear that supply has yet to meet demand and that specific niche markets in the entertainment sector have very low penetration.
Globally, PricewaterhouseCoopers expects an annual growth rate of 7.1 percent between 2011 and 2013. Nationally, Vietnam’s industry tycoons expect the local economy to blossom in the next decade, with prospects for recreational parks (with a cultural and educational theme), adventure sports parks and casino businesses.
It is worth noting the success of the southern province of Ba Ria-Vung Tau, which has received US$922 million in FDI to develop entertainment areas, tourism resorts and the Strip Project in Ho Tram (a 400-acre beachfront complex). As well, plans are in the works for Vietnam’s first casino to be built in Lang Son in 2013 at a cost of US$2 billion (financed by Taiwanese-owned Khai Tiep Investment International Joint-stock Company). The casino town will cover an area of 186 hectares and will include 12 casinos, 300 resort villas and an 18-hole golf course.
Indeed, investment in this industry is on the rise in Vietnam. As of April, 126 FDI projects have been undertaken with a combined registered capital of US$3.5 billion. The southern provinces generally seem to be more attractive to foreign investors, currently with 67 on-going projects.
PwC labelled Vietnam “The world’s fastest-growing entertainment and media market from 2009 to 2013” forecasting media market value of US$2.3 billion by 2013, with a projected growth rate of 16.7 percent annually.
Dezan Shira & Associates is boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in Vietnam. To contact the firm, please email [email protected], visit www.dezshira.com, or download the firm’s brochure here.