Viet Nam has become an emerging market for South Korean formula milk companies in recent years, making up for shortfalls in demand in China and the domestic market, according to statistics published by the Korea Customs Service.

The Southeast Asian country imported US$15.85 million worth of formula milk from South Korea during the first 11 months of 2022, accounting for 17 per cent of the industry's total export. Formula milk import from South Korea to Viet Nam reached $19.54 million in 2021, an increase of 260 per cent from the same figure in 2016.

Meanwhile, the industry has seen a sharp decline in demand from China, traditionally its largest export market, with export declining from $104.92 million in 2016 to $62.27 million by the end of November 2022.

The industry recorded its all-time high of $121.5 million in 2016 thanks to exploding demand from China. However, trade tension and decreased demand just a year later sent export diving to $77.72 million in 2017. It has since then recovered to $100 million in 2021 and was projected to maintain the same level in 2022.

Industry experts said South Korean companies are looking at Viet Nam as a new emerging market with the Southeast Asian country experiencing a high birth rate with approximately 1 million newborns a year, 2.5 times higher than that of South Korea.

Viet Nam's formula milk market was estimated to be three times that of South Korea market at $1.12 billion with South Korean brands enjoying wide-spread popularity among Vietnamese parents. It has resulted in formula milk companies pushing for larger investments in the country with the aim of making it one of its key markets.

Leading the pack was Lotte Confectionery, a member of Lotte Food since July 2022, which has been in charge of bringing major South Korean brands including Nubone, Lotte Kid A+ and Grand Noble to Viet Nam.

The company said it has doubled its sales volume in Viet Nam last year compared to 2021, thanks to major marketing campaigns and trade promotional activities.

The industry's projection for the Viet Nam market was over $20 million by the end of 2023. — VNS