|Pulmuone's kimchi is sold at a supermarket in the United States in this 2019 file photo. / Courtesy of Pulmuone|
By Kim Jae-heun
Since its entry into the Vietnamese market in December 2019, local food firm Pulmuone has established a foreign branch office in Hanoi and been expanding its business through local retailers.
In the third quarter of 2020, its sales had reached 51.61 million won ($46,850), quadruple the figure for the previous quarter, but still fairly low.
Pulmuone Vietnam spent 200 million won to open its business, however, considering how fast revenue is growing there, the food firm has high expectations for the new market.
Its sales from the Vietnamese market do not contribute much to its overall overseas figures, but the food firm believes it can better connect to neighboring Southeast Asian markets once it establishes itself there.
"Our Vietnamese branch is busy securing local distribution networks and forming a marketing team. We will build production lines there and Vietnam will become a bridgehead for us to enter other Southeast Asian countries," a Pulmuone official said.
Its Korean rivals Daesang and Orion have achieved solid results in Vietnam already. They are making consistent investments to expand product categories and set up more production facilities there. These are all possible as the Vietnamese economy is continuing its high growth at the moment and people's improved living standards are creating high demand for Korean food thanks to hallyu, or the Korean wave.
As a latecomer, Pulmuone is investing in the Vietnamese market with a long-term plan. It wants to bring its knowhow that helped its business success in China and adapt it to the Vietnamese market.
Pulmuone established foreign branches in Beijing and Shanghai in 2010 and set up production lines as part of its long-term investment in China. It started with a rice cake business there and expanded its product range to kimchi and frozen dumplings. Now, it is selling tofu, pasta, hot dogs and home meal replacements.
Sales in China soared recently due to the COVID-19 pandemic that encouraged people to shop for food online. The food firm business in Beijing made a turnaround in the third quarter of last year, recording an operating profit of 6 billion won.
The food firm is willing to do the same in Vietnam and slowly increase its presence in the local market. Its main products in Vietnam are home meal replacements, although frozen dumplings and tteokbokki, or stir-fried rice cakes, are also two popular items.
For the long term, Pulmuone will study Vietnamese consumers' favorite Korean food and introduce new items developed for local tastes.
Currently, all the products exported to Vietnam are produced in Korea, but considering the labor and logistics expenses, it is better to build a production line in Vietnam for the Southeast Asian market.