13:40 | 08/02/2016 Investment
(VEN) - The explosive growth of movies in Vietnam in recent years has attracted increasing attention of domestic and foreign investors. Thanks to careful investment in cinema complexes and the quality of movies, the Republic of Korea (RoK)’s CJ CGV currently holds a more than 50 percent share of the Vietnamese movie market.
Film premieres at CGV cinemas attract great attention of Vietnamese artists
According to the Vietnam Movie Distribution and Popularization Association, film distributors with foreign direct investment (FDI) currently hold an overwhelming share of the Vietnamese movie market.
FDI cinemas account for up to 80 percent of the 50-plus cinema complexes in the country’s major cities. The top position belongs to CGV with 30 cinema complexes covering 10 cities nationwide. The South Korean-owned Lotte Cinema ranks second with 16 cinema complexes. The third position belongs to Platinum Cineplex with five cinema complexes (Platinum Cineplex was established by Indonesia’s Multivision Group). On the Vietnamese side, only two companies, BHD Star Cineplex, and Thien Ngan Film Joint Stock Company which owns the Galaxy chain, have proved capable of competing with foreign rivals.
CGV joined the market later than all other players. In 2011, it signed an agreement to buy all Megastar cinemas in Vietnam at the cost of over US$70 million, and officially renamed them into CGV cinemas in 2014. Although it was a late market entrant, CGV has quickly become a leading entertainment brand in the Vietnamese movie market. CGV has achieved the fastest growth among film distributors in Vietnam, with quality cinemas at favorable locations.
CJ CGV Vietnam Co., Ltd Chief Executive Officer (CEO) Dong Won Kwak said, “Our plan is to open 10 cinema complexes each year and we expect to have about 60 cinema complexes in Vietnam by 2018. Besides Ho Chi Minh City and Hanoi, CGV will open cinema complexes in other cities where people have demand for enjoying movies at large, modern cinemas. CGV is a pioneer in building international standard cinema complexes with specialized facilities such as cinemas for children, IMAX cinemas, F&B areas, and waiting areas for parents.
The CJ CGV CEO added that in countries with developed cinema industries such as the US and the RoK, people go to the cinema four times a year, while the frequency of cinema attendance among Vietnamese people is just once every five years. So there is room for increasing cinema attendance in Vietnam.
CGV is currently authorized by the two largest Hollywood film distributors, United International Pictures, and Buena Vista International, to be their sole film distributor in Vietnam. This means 90 percent of Hollywood films are imported into Vietnam through CGV. The firm is also a sole provider of films distributed by CJ Entertainment - South Korea’s largest film distributor and producer.
From the viewpoint of consumers, Thu Ha, a resident in the Sky Garden, Phu My Hung New Urban Area, District 7, Ho Chi Minh City, said CGV cinemas provide the latest Hollywood blockbusters at the same time as their premiere in North America. She also said there were interesting bonuses like a greeting from the cast of Fast & Furious 7 to Vietnamese audiences. Ha added that CGV offers its VIP card holders special privileges on holidays by presenting them with 3D movie tickets, IMAX cinema tickets, and allowing them to accumulate bonus points each time going to the cinema.
Efforts by domestic film distributors
Although capable of competing with CGV, Vietnamese film distributors BHD and Galaxy have yet to find suitable ways to compete.
In 2015, BHD and Galaxy opened some new cinema complexes in Ho Chi Minh City with stronger investment in quality in an effort to attract larger audiences. While BHD focused its attention on the size and location of cinemas, Galaxy followed the policy of selling tickets at low prices, targeting at common customers.
Another domestic player in the Vietnamese cinema and film distribution market is Mega GS, a joint project between Saigon Media and Song Vang Group. Mega GS recently opened its first cinema complex which was built on the foundation of the former Thang Long Cinema and consists of six projection rooms, including two 3D rooms, with total capacity of nearly 1,000 seats. The quality of movies and reasonable ticket prices are the two factors making up Mega GS’ competitive advantages. Mega GS is building other cinema complexes in Districts 1 and 5 and Binh Thanh District, all are located at trade centers which are under construction in Ho Chi Minh City.
Domestic film distributors said they would be more active in learning about the audience tastes and expect that the gap between them and foreign rivals would be narrowed in the near future.