It was the afternoon of Mar. 10 at Lotte Mart in Da Nang, Vietnam. The place is always crowded with Korean tourists and local people.
The fourth-floor featuring food was also packed on this day. It took me a while to find the entrance due to the wave of shoppers who had finished their shopping. When I finally made it in, Nongshim Shin Ramyun Cup Noodle Soup in the most prominent spot caught the eye. They were stacked twice as high as an adult man’s height.
The Ramyeon cup priced at 35,000 VND (about 1,800 won) seemed to be nine times more expensive for Vietnamese in terms of their perception, even though the price was similar to that in South Korea. Vietnam’s per capita gross domestic product (GDP) is around $4,100.
On this day, during the period of the “Korean Food Fair,” the instant noodle was sold at 37% off its usual price, at 21,900 VND (about 1,100 won). The pile of cup noodles was being shortened in proportion to the number of people rushing to buy the product at a cheaper price. A staff member in a red shirt beside me hurriedly unpacked a new box and restacked the cup noodles.
Most of the shoppers were local Vietnamese. Some consumers glanced at the corner where “Samyang Buldak Ramen” cup noodles were placed. A young woman picked up and dropped off “Samyang Rose Buldak,” one of the special flavors of the Buldak series several times. It cost over 40,000 VND (about 2,000 won), an equivalent amount to eat a hearty bowl of beef pho in most restaurants in Da Nang.
Instant noodles from Japan, a self-proclaimed birthplace of ramen, were hardly seen. Even the products from China which has the largest market scale were hard to find in the market.
According to the World Instant Noodles Association (WINA), Vietnam consumes the most instant noodles per capita annually in the world. As of 2021, the annual per capita consumption of instant noodles was 87 packets, surpassing South Korea (73 packets), which had been the unquestionable world leader until 2021.
The consumption volume of instant noodles in Vietnam is rapidly growing at a rate of around 10% annually.
Euromonitor, a global market research company estimated Vietnam’s instant noodle market size to be $4.291 billion (about 5.60 trillion won) in 2028. The five-year average annual growth rate of the market is 9.6%. Vietnam is like a treasure trove for the South Korean food industry, which is worried about shrinking domestic demand.
The “Big 4″ South Korean instant noodles brands (Nongshim, Ottogi, Samyang, Paldo) have been eyeing the Vietnamese market early on. Among the imported instant noodles in Vietnam last year, South Korean brands accounted for 52.3% of the market share. One out of every two packets was South Korean-made.
In 2022, the country’s instant noodle exports to Vietnam surged by 36% to $198.2 million (about 260 billion won), compared to 2020 ($145.8 million, 191 billion won).
Paldo was the first to start local production in Vietnam. It established a Vietnamese corporation in 2006 and set up a noodle factory in Phu Tho province in 2012. Last year, it began construction of a second factory near Ho Chi Minh City, the southern economic heart of Vietnam.
Ottogi established a noodle factory in Hanoi in 2018. It produces representative products like Jin Ramen locally. Ottogi Vietnam’s sales in 2022 were about $48.29 million (64.6 billion won), a 133% increase from 2019 ($20.70 million, 27.7 billion won).
Samyang Foods is pursuing a premiumization strategy that emphasizes “made in South Korea” rather than local production. Nongshim, the leading company in the domestic instant noodle market, still has sales in the Vietnamese market of around $1.49 million (2 billion won) as of the first quarter of last year. On an annual basis, it’s around 10 billion won.
Despite the surge in exports, however, there remains a challenge of overcoming low market share. According to Euromonitor, as of 2022, Paldo’s share of the entire instant noodle market in Vietnam is 1.2%, ranking around 10th among all brands. Nongshim is ranked 13th with 0.7%.
