Jewelry has held a significant and revered position in Vietnamese culture for thousands of years, signifying power, prestige, luck, and prosperity. This enduring fascination with jewelry has given rise to a thriving industry in Vietnam, driven by the growing middle class and an increasing desire for high-quality, fashionable jewelry products. International brands, including Pandora, have recognized the market potential and established a strong presence in the country.
Pandora’s Expansion in Vietnam:
Pandora Group has undertaken a substantial investment of approximately US$100 million to establish a modern jewelry manufacturing facility in the Vietnam-Singapore Industrial Park (VSIP) III in Binh Duong. This facility will be Pandora’s first venture outside of Thailand and will supply products to markets worldwide.
Why Vietnam?
Several factors contributed to Pandora’s choice of Vietnam for its expansion:
1. Skilled Labor: Vietnam boasts a pool of highly skilled craftsmen, making it a suitable location for jewelry production. With Pandora’s expanding revenue, a skilled and substantial labor force is crucial.
2. Geographical Location: Vietnam’s proximity to Thailand, where Pandora already operates, provides strategic advantages in terms of proximity and connectivity, helping to diversify Pandora’s production locations and minimize supply risks.
3. Binh Duong’s Strategic Location: Binh Duong, in close proximity to Ho Chi Minh City, offers access to a vast consumer market and a network of suppliers and infrastructure.
4. Infrastructure: Binh Duong has well-planned infrastructure, including transportation networks, utilities, and industrial estates, making it an attractive location for industrial development.
Pandora’s Market Entry Challenges:
Pandora initially planned to begin construction in the first quarter of 2024 and have the factory operational by 2025. However, the company faced challenges related to construction licensing procedures, resulting in a delay in the project’s timeline. The factory’s operation is now projected to begin in 2026 due to issues with obtaining the necessary construction permits.
Lessons Learned:
Pandora’s experience offers valuable insights for other investors seeking to enter the Vietnamese market:
1. Engaging with Local Authorities: Establish strong connections and efficient communication with local authorities. Actively involve government departments during the application procedure to navigate potential obstacles and ensure compliance with local regulations.
2. Understanding Regulatory Requirements: Thoroughly understand and comply with regulatory requirements and procedures. Conduct due diligence before undertaking a major investment project to ensure timely permits and approvals.
3. Collaboration with Local Partners: Work closely with local partners, consultants, or legal experts who have in-depth knowledge of local regulations and processes. Local partners can provide valuable insights and guidance to navigate the regulatory landscape effectively.
Pandora’s venture in Vietnam’s jewelry market is a testament to the country’s growth potential and the significance of careful planning and collaboration when expanding into new markets.
