More and more Japanese companies have begun
to expand their businesses into countries with small economies in Southeast
Asia such as Cambodia, Myanmar and Vietnam. Japanese companies have been
shifting their presence in Asia from China through Thailand to nations
considered to be less economically advanced.
Retail
giant Aeon Co. on Monday opened a shopping mall in Phnom Penh, the capital of
Cambodia, that is one of the nation’s largest commercial complexes. The
facility houses about 190 stores, including an Aeon supermarket, a movie
theater, a bowling alley and brand-name clothing shops. Aeon Co. invested about
20 billion yen (US$197 million).
“Unless
we advance into new regions, we cannot ride the wave of the shift to Asia” by many
companies, Aeon President Motoya Okada said at a press conference in the city,
adding they are considering making forays into other nations such as Myanmar.
The
major retailer also opened its first shopping mall in Ho Chi Minh City,
Vietnam, in January. Two more Aeon shopping centres are set to open in Binh
Duong Province near the city this autumn and then in the capital, Hanoi.
Aeon
Co. plans to have more than 10 shopping centres in the three nations of
Cambodia, Vietnam and Indonesia within the next three years.
Mazda
Motor Corp. plans to open its first store in Yangon, the largest city in
Myanmar, in August or later. The company set up dealerships in Laos in 2012 and
in Cambodia in 2013.
“Though
sales are really small, we are prepared for future demand,” said an employee of
the car maker.
Toyota
Motor Corp. has been increasing the number of its dealerships in Laos as well.
Companies
from other countries are also active in entering into such nations. Britain's
luxury car maker Rolls-Royce announced in early June that it would open a
dealership in the centre of Phnom Penh, where a Chinese company has been
developing a project to open a large shopping mall.
In Laos
as well, foreign firms have been carrying out development projects such as
opening a Chinese-financed shopping centre in Vientiane.
Thus
far, when foreign corporations, including Japanese firms, saw labor costs
rising in China—into which many companies had entered—they began operations in
Thailand such as building factories there.
However,
personnel expenses have also risen in Thailand, and the nation’s wage level is
more than three times as high as that of Cambodia, Myanmar or Laos.
As a
result, there is a growing trend to set up production bases in Southeast Asian
nations considered less advanced than China and Thailand. The trend has been
that the increase in employment leads to the expansion of the middle-income
group in the regions.
As
Japanese companies face the issue of a shrinking domestic market due to the low
birth rate and the aging population, such nations in Southeast Asia are
positioned as an important market to improve their business performances.
Takahiro
Tsujimoto
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated
in Singapore since 1994.
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