How Vietnam has become one of Asia’s fastest growing markets

Lunar New Year is a key box office period in several Asian territories, but nowhere was it more hotly contested this year than in Vietnam, where several local, Japanese and Hollywood movies were slugging it over the week-long holidays (February 9-15).

Tran Thanh‘s Mai, a romantic drama that delves into the psychology of its female protagonist, was the clear winner — at the time of writing it was topping the box office with a haul of VND400BN ($16.4M). Produced by Tran Thanh Town and CJ HK Entertainment, a joint venture between Korea’s CJ ENM and local outfit HKFilm, the film has the potential to break the record set by Tran Thanh’s own The House of No Man, released this time last year, which is Vietnam’s highest ever grossing film with VND476BN ($19.4m).

Also released over the holidays, known as Tet in Vietnam, was Nhat Trung’s comedy Meet My Pregnant Sister Again, which came in second with $3M. Two other local films also opened on February 10 — Hoang Tuan Cuong’s music-themed Bright Lights (Sang Den) and Le Hoang’s drama Tea — but withdrew from cinemas after a few days as the battle was so intense. Also opening in this period were Japanese animation Spy X Family Code: White, which came in third, followed by US studio films Madame Web and Argylle.

The busy release schedule reflects a vibrant market that has seen stellar post-pandemic recovery — by some counts the second fastest recovery in Asia following India — along with a young but dynamic local industry. Before the Tet holiday, 89s Group’s horror Quy Cau, from first-time director Luu Thanh Luan, topped the box office for six consecutive weeks, grossing more than VND108BN ($4.5M). The films set records for a local horror movie in Vietnam despite the fact that January is usually a quiet month ahead of Tet.

But these days there are many unusual occurrences in Vietnam’s movie market. Although the previously state-run industry only opened its doors 10-15 years ago, box office was growing at a steady clip of 10% annually before the pandemic, overtaking Thailand, which has a much more developed and longer established film industry. Last year, Vietnam’s box office reached $150M, or around 90% of pre-pandemic levels, from a total of 1,100 screens. Not bad for a market that in 2010 only had 90 screens and annual revenue of less than $15M.

Growth factors

The growth is due to a few factors, but one of the biggest is the multiplex building programmes undertaken by Korean exhibitors CJ CGV and Lotte Cinema, along with local studios Galaxy Cinema and BHD Star Cineplex. Recently, Vietnam has also seen the emergence of hip new cinema chains, such as Beta Cinemas and Cinestar, which offer lower ticket prices aimed at students and middle income cinema-goers.

Also driving the market is a lively local production sector that is experimenting with new genres and making a wider range of films — again an achievement considering that private companies were only allowed to start producing in the mid-2000s. Korea’s CJ ENM and Lotte are also active in financing and producing Vietnamese-language movies — CJ with films such as Mai and The House Of No Man and Lotte with titles including Le Van Kiet’s 2019 action film Furie and Victor Vu’s recent period drama The Last Wife.

“It’s a very young audience — we estimate that up to 80% are under the age of 29,” says CJ HK Distribution Supervisor Nguyen Tuan Linh. “So that age group is basically dictating the tastes of the market: Local romance, comedy and horror as well as movies from Korea, Thailand and Indonesia.” Justin Kim, CJ ENM’s Head of International Film Production, adds that it’s also a demanding and unforgiving audience: “They’re very active on social media, especially TikTok and Instagram, and will react quickly if they think the quality of a movie is not so good.”

Currently, it’s also an audience that seems to prefer local films to Hollywood fare. Only two US studios titles — Fast X and Elemental — made it into the top ten in 2023, while six local productions made the chart, headed by The House Of No Man, Ly Hai’s Face Off 6: The Ticket of Destiny and period drama Song of the South. Two Japanese animated films — the latest instalments in the Detective Conan and Doreamon franchises — also ranked in the top ten. 

These results reflect trends across much of post-pandemic Asia, in which the supply of fresh US studio films has slowed down, thanks to the double whammy of Covid and Hollywood strikes, at the same time that Gen Z audiences are clamouring for content that is more culturally relevant to them and featuring Asian pop culture trends and stars. 

“Among the Hollywood films, we still find that the franchise movies work best,” says Nguyen Hoang Hai, Chief Content Officer of CJ CGV Vietnam, which handles titles for Warner Bros, Paramount and Universal (local studio Galaxy handles Disney and Sony). “It’s a similar case with Japanese anime. During the pandemic, audiences became familiar with the characters in big Japanese franchises because they started watching them on OTT platforms. Then they were happy to come to the cinema when the film versions were released.”

When it comes to films imported from other countries, Korean, Thai and Indonesian movies are currently among the most popular. Due to the youth of the audience, European arthouse is more of a struggle, although French animation has been performing well. “Production values, marketing strategy and story are all elements that help a film in Vietnam,” says Phong Duong, Manager of International Business for distributor Mockingbird Pictures, which recently scored a hit with Thai horror Tee Yod. “Korean films are popular, especially romance and comedies, but not all Korean movies do well.”

For now, however, it’s local films that are driving the market. ProductionQ CEO Nguyen Hoang Quan, who along with director Tran Huu Tan is behind a wave of successful local horrors, explains the company has had most success with stories rooted in local folklore and traditions, as well as adaptations of novels from young writers with a large Gen Z readership.

ProductionQ’s most recent hit, The Soul Reaper, is the perfect example of this — billed as Vietnam’s first period horror movie, the film is based on Thao Trang’s best-selling novel Lunar New Year In Hell Village. ProductionQ also adapted the book as a series, Hellbound Village, for local streamer K+ with Netflix acquiring Southeast Asian rights.

“We’ve had audiences telling us that they loved the Korean series Kingdom and were longing for a Vietnamese series that also had a period setting and high production values,” says Nguyen. “The story may be rooted in historical village life, but it also touches on themes like bullying so has modern relevance.”

Industry in its infancy

But while there’s obviously no shortage of ambition in the Vietnamese film industry, producers and filmmakers all bring up the same issues — the industry is still in its early stages, investors are still cautious following the pandemic and the talent pool isn’t big enough to satisfy audience demand.

“When we start a new project, we don’t have many options among cast and crew to make the film feel fresh and different,” says Hang Trinh, founder of sister production and distribution companies Silver Moonlight and Skyline Media. “Right now, training is the key issue so we can have more talent to choose from and the market can really grow.”

CGV’s Nguyen, who also heads production subsidiary V Pictures, agrees: “Before the pandemic, Vietnam was producing around 40-45 movies a year, but now it’s less than 30 because many investors come from outside the film industry and their other businesses are now facing financial difficulties.”

However, Nguyen is optimistic in the long term and thinks the market could reach $200M within a few years. In the meantime, V Pictures is raising finance for a slate of local movies and CGV is supporting new talent by financing short films. Pham Thien An, the director of Cannes Camera d’Or winner Inside The Yellow Cocoon Shell, is among the filmmakers who started their careers by making a CGV-backed short.

Unlike other Southeast Asian markets, Vietnam has not been a major focus of the global streamers, even before the current scaling back of local-language production. Netflix filmed a U.S.-led English-language original, A Tourists Guide To Love, in Vietnam, and acquires a fair amount of Vietnamese films and series (in addition to Hellbound Village, Netflix recently acquired BHD’s reality series Let’s Feast Vietnam). But none of the streamers have yet ventured into Vietnamese-language originals.

There are a few issues holding back foreign investment in Vietnam, including censorship (which got Barbie banned last year for its alleged portrayal of the nine-dash line, representing China’s territorial claims in the South China Sea); regulations that prevent foreign companies from setting up without a local majority partner; and a lack of tax credits or other production incentives.

However, local producers also say that recently the government appears more willing to listen to the industry about what is needed to develop the market. Under a new Cinema Law, which came into effect in January 2023, the country’s film ratings system was updated, which has made classification more transparent and easier to work with, and private companies are now allowed to launch film festivals for the first time. A brand new event, Ho Chi Minh City International Film Festival (HIFF) is scheduled to take place April 6-13, joining existing festivals in Hanoi and Danang.

“Our industry has been through challenging times during the pandemic, but we have stories to tell and there’s definitely an opportunity,” says BHD founder and Senior Vice President Ngo Bich Hanh. “We’ve reached a kind of tipping point where we can really become something if we all work together and have the right government support.”

Reaching the North America Market & beyond

Last year was a proud moment for Vietnamese filmmakers on the festival circuit, with Pham Thien An’s Inside The Yellow Cocoon Shell and Tran Anh Hung’s French film The Taste of Things winning awards in Cannes and selling widely. However, Vietnamese movies are also starting to expand in mainstream distribution channels, particularly in the U.S..

Thien A. Pham, founder of U.S. distributor 3388 Films, explains that, until three years ago, there would be only one Vietnamese film released every few years in a couple of U.S. sites. But following the success of Tran Thanh’s Dad, I’m Sorry in 2021, the number and size of releases has dramatically increased. “In 2023, we had at least six Vietnamese films in North American theaters, many of which played in 40-70 sites,” Pham says, adding that these films are reaching “an entirely new segment of audience that had never stepped foot into a movie theater before”.

While 3388 Films targets traditional Vietnamese diaspora markets, it has also started expanding into states such as Kansas, Ohio and North Carolina, “Places that had never screened a Vietnamese film before, but we felt had lots of market potential based on our research and on-the-ground experience,” Pham says.

Meanwhile, producers in Vietnam are starting to experiment with remakes and co-productions as a means of reaching international markets. CJ’s Justin Kim is looking at remake opportunities for Vietnamese content, citing the example of Indonesian horror Satan’s Slaves, which is heading for an English-language adaptation: “Vietnamese films could also go this route in future and CJ, with its international network, can help with that.”

In addition, Skyline’s Hang Trinh is working on a slate of co-productions with countries including the U.S., Korea and Mongolia. “Our main concern is that other countries have not fully recovered from the pandemic, but we believe that if we control costs and have the right commercial and international elements, we can reach more international markets,” Hang says.

Skyline is one of two Vietnamese sales agents, along with BHD’s Vietnam Media Corp, that regularly attends international markets. But unlike other Southeast Asian countries including Singapore, Thailand, Malaysia, Philippines and Indonesia, Vietnam doesn’t currently receive government support for overseas promotion. Local producers are hoping that now the government is listening to ideas for developing the cultural industries, this is one of the first issues they will address.

By Liz Shackleton – Deadline.com – February 23, 2024