92% of Korean firms in Vietnam wish to stay despite rising labor costs: survey
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Lotte Mall West Lake Hanoi, a large-scale shopping and entertainment complex in Hanoi’s Tay Ho District, Vietnam / Courtesy of Lotte Shopping
More than 9 out of 10 Korean companies operating in Vietnam said they plan to maintain their businesses there despite rising labor costs and regulatory burdens, a survey released Sunday showed.
According to the survey conducted by Korea International Trade Association (KITA), 92 percent of Korean companies operating in Vietnam said they had no intention of withdrawing from the Southeast Asian country.
Among them, 87.5 percent cited “cost advantage relative to other countries” as the main reason for their stay.
The results come despite a sharp rise in wages in Vietnam in recent years, KITA said.
The monthly minimum wage of Vietnamese workers increased by more than 4.5 times from $45.4 in 2010 to $205.3 in 2024, according to the association. Monthly wages have risen by an annual average of 11.4 percent during the 14-year period, marking the fastest pace of increase among major economies in Asia.
Despite increasing labor costs, companies maintained a positive view on the future outlook of the Vietnamese market.
Nearly 60 percent of companies expected their operations in Vietnam to improve over the next three to five years, far outpacing those who expressed a pessimistic outlook, at 12.4 percent.
Seventy-two percent of respondents said they assess Vietnam as continuing to play the role of a global business hub in the future.
KITA advised companies operating in Vietnam to review their cost structure while improving their operations in line with changing business environments in the Southeast Asian country.
