Bilateral trade between Thailand and Vietnam has surged, surpassing $20 billion annually, making Thailand Vietnam's leading trading partner within ASEAN. Outside of ASEAN, Thailand is Vietnam's 9th largest foreign investor having invested $1.4 billion in 2023, according to data from the Ministry of Planning and Investment of Vietnam. As the Western nations continue to decouple from China, and rely less and less on Asian manufacturing, Asian nations will benefit from advancing regional trade, cooperation, and investments.
According to Thai Ambassador, Nikorndej Balankura, Thailand has become Vietnam's largest trading partner in ASEAN with total trade topping $20 billion per annum. Further, the FDI investments tripled in 2023 to over $1.4 billion across 735 projects, making it the ninth-largest foreign investor in Vietnam.
These claims are verified by the Ministry of Planning and Investment of Vietnam which ranks these nations as the top ten foreign investors into Vietnam in 2023 (estimated FDI in $ billions):
Singapore ($6.9 billion)
Japan ($6.57 billion)
Hong Kong ($4.68 billion)
South Korea ($4.17 billion)
China ($4.33 billion)
Taiwan ($3.2 billion)
United States ($1.8 billion)
Denmark ($1.6 billion)
Thailand ($1.4 billion)
Germany ($1.3 billion)
A noteworthy recent Thai investment in Vietnam is the $860 million acquisition of Home Credit Vietnam's business.
Home Credit Vietnam's $860 Million Acquisition
Last week, Thailand's fourth-largest bank by assets, SCB X, announced its intention to acquire Home Credit Vietnam in a deal valued at $860 million (i.e., VND 20.97 trillion). Home Credit Vietnam is part of the Home Credit Group which is a Czech Republic company established in 1997 and operates in multiple countries in Asia and Europe.
Home Credit Vietnam holds approximately 14% of the Vietnamese consumer finance market, making it the second-largest player in the sector.
On the acquisition, Arthid Nanthawithaya, CEO of SCB X, had this to say:
“The acquisition of Home Credit Vietnam marks a significant milestone in SCBX’s journey to become a top regional financial technology group. This strategic acquisition strengthens our presence in the high-growth ASEAN market and also increases value and maximises return to our shareholders in the long term.”
And on the question of why invest in growing in Vietnam, the bank CEO had this to say:
“Vietnam, with its dynamic economy averaging 7.5 per cent GDP growth over the past decade and a tech-savvy population, is a key strategic market for SCBX... This acquisition marks the beginning of SCBX Group’s expansion into Vietnam, a country with a population of over 100 million. Home Credit Vietnam has a 15 million customer base, 14,000 point-of-sale locations, and an experienced management team of European and Vietnamese members.”
Home Credit, the holding company, is an interesting company with roots in the Czech Republic, it has always focused on offering consumer loans and other financial services to its clients initially in Russia, Kazakhstan, Ukraine, and Belarus. By 2007, it had become the second-largest consumer lender in Russia which indicates the rapid success the firm achieved.
In 2010, the firm shifted some of its focus eastward and became the first foreign company set up in China as a consumer finance lender. Subsequently, it established operations in India, Indonesia, the Phillippines, and Vietnam. In Vietnam, the company experienced rapid growth and won through being an early entrant, and thoughtfully adopting its product to the local market.
Beyond Home Credit: Broader Thai Investments
While the Home Credit acquisition is notable, Thai investments in Vietnam extend beyond this:
WHA Group, a leading Thai industrial estate developer, established WHA Industrial Zone 1 - Nghe An in Vietnam's Nghe An Province. This 2,100-hectare zone focuses on developing eco-industrial parks, promoting sustainable practices, and contributing to Vietnam's green growth initiatives. WHA Group has expressed ambitions for further expansion in Vietnam, potentially extending its eco-industrial park model to other regions in the country.
CP Group is a Thai conglomerate, known for its CP Foods (CPF) subsidiary, has invested heavily in Vietnam's agriculture and food processing sectors, employing over 25,000 people.
Siam Cement Group ("SCG") completed the $5.4 billion Long Son Petrochemical Complex in early 2024, Vietnam's first integrated petrochemical complex, aiming to meet the country's growing demand for polymer resins. SCG is Thailand's largest cement group and oldest in Southeast Asia.
Thailand's investments in Vietnam demonstrate strong regional collaboration in Southeast Asia. As Chinese decoupling continues, regional trade in Asia will become more important and nations such as Thailand, Japan, South Korea, Australia, and Indonesia will be investors to watch.
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