The decision to liberalize the movie industry in 1995 opened up a new phase for cinemas in Vietnam. After decades of being controlled by state-owned enterprises, foreign cinema firms entered the market, especially those from South Korea, changing the face of the market.
The 2016 report of CJ CGV, which owns the CGV cinema chain, showed satisfactory business results in the last few years, since it took over Megastar and has developed into the biggest cinema chain in the country.
Holding more than 40 percent of the market share, the subsidiary of CJ Group from South Korea obtained VND1.823 trillion in revenue in 2016, an increase of 3.3 percent over the same period last year, and post-tax profit of VND93 billion, three times higher than 2015.
The chain has 38 cinema complexes in Vietnam with 247 projection rooms, an increase of 20 percent over 2015.
Lotte Cinema is the biggest rival of CJ CGV in Vietnam which holds 30 percent of the market share. Owning 29 cinema complexes in the country, Lotte Cinema has a high average growth rate, even higher than CJ CGV’s.
|Five leading businesses hold 98 percent of Vietnam’s film distribution market, with three of them foreign invested.|
Korean Economic Daily reported that Lotte Cinema’s revenue and profit in the first six months of 2016 increased by 29.9 percent and 87.6 percent, respectively, compared with the same period last year.
Meanwhile, the report released by Lotte Shopping, the holding company of Lotte Cinama, showed growth rate of 16 percent in 2015 with revenue of 45.1 billion won (KRM), or VND900 billion.
According to KDB Daewoo Securities, the Vietnamese cinema market is controlled by five big players which hold 98 percent of the market share. They include CJ CGV (43 percent), Lotte (30 percent), Platinum (10 percent), Galaxy (9 percent) and BHD (6 percent).
However, the market will be remapped in the time to come as Platinum Cineplex has announced the closure of three of five complexes from the end of February.
First joining the Vietnamese market, in 2008, Lotte Cinema took over the stakes of Diamond Cinema (DMC), a joint venture between Fellas (South Korea) and Fafilm Vietnam.
In 2011, CJ CGV spent $73.6 million to buy 80 percent of Megastar’s stakes, the owner of the largest chain at that time, which then held 60 percent of the market share, and renamed the chain as CGV.
Analysts said the two firms from South Korea decided to ‘think big and play big’ right from the beginning, pouring more money to expand their chains in Vietnam.