VietNamNet Bridge - Sixty percent of the cinema market in Vietnam is being held by foreign investors, with CGV and Lotte from South Korea the main players.

According to the Ministry of Culture, Sports and Tourism, there were less than 100 projection rooms in Vietnam in 2009, including 26 in Hanoi and 65 in HCMC. By the end of 2016, Vietnam had 138 theatres and cinema complexes with 510 projection rooms and 86,500 seats.

CGV of CJ Group was leading the market by December 2016 with 38 cinema complexes, followed by Lotte Cinema with 29 complexes. 

The two big foreign players alone make up 2/3 of the cinema market. Two Vietnamese players – Galaxy and BHD — have seven complexes.

Analysts said that once the revenue of the cinema market grows by 20-25 percent per annum and the entertainment demand from youth is on the rise, the development of cinemas in Vietnam is very promising. 

Hollywood Reporter magazine lists Vietnam among the cinema markets worth more than $100 million.

Sixty percent of the cinema market in Vietnam is being held by foreign investors, with CGV and Lotte from South Korea the main players.

However, according to Ngo Thi Bich Hanh, CEO of Binh Hanh Dan, which runs BHD cinema complex, said the business requires huge investment, while the revenue hardly covers expenses. 

One cinema complex needs initial investment capital of $3-8 million (VND60-180 billion) and it takes 3-5 years or longer to take back the capital.

She said that it is getting more and more difficult to find premises for cinemas because the premises have to satisfy many technical requirements. It is also difficult to negotiate with landlords to get reasonable rent. 

According to CBRE Vietnam, the rent in Vietnam is among the highest in SE Asia. The retail rent in large cities like HCMC increased by 15 percent in the last year.

In general, cinemas’ revenue comes from three major sources – ticket sales, popcorn sales and ads.

“Ticket sales prove to be the most important source of revenue. However, you won’t make profits if you rely on this. You need to get money from other sources. Successful cinemas are the ones which sell popcorn and drinks well,” Hanh said.

Selling food at cinemas brings considerable revenue to investors, together with ticket sales and ads.

All cinemas have popcorn and juice counters. On average, two people going to the cinema would spend VND100,000-150,000 on two glasses of soft drinks and one pack of popcorn, nearly equal to the expense on tickets. It is estimated that food sales at cinemas brings is 40-50 percent of the profit from cinema ticket sales.

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