Matsumoto Kiyoshi Holdings Monday signed a deal with Ho Chi Minh City-based Lotus Food Group to establish the Matsumoto Kiyoshi Vietnam joint venture next February with a registered capital of VND31.5 billion ($1.35 million).

The joint venture will be owned 51 percent and 48.87 percent respectively by the two sides. Le Van May, Lotus Food Group’s president, will hold the remaining 0.13 percent and will also be the president of the joint venture.

The two sides had signed a basic agreement to this effect in July.

The joint venture will open its first flagship store in District 1, HCMC at the end of March 2020 and expects to open an additional 10 to 15 stores in the next three to five years. It has plans to expand its network in the Vietnamese market to hundreds of outlets in the future. 

The Japanese firm said it has analyzed data of Vietnamese customers who shop at pharmaceutical and cosmetic stores during their trips to Japan since 2017 before embarking on its Vietnam venture.

"Cosmetics and dietary supplements are the most purchased products by Vietnamese customers with an annual growth rate of over 56 percent," Matsumoto officials said at a press conference Monday.

Founded in 1932, Matsumoto Kiyoshi Holdings operates many wholesale and retail pharmaceutical and cosmetic companies in Japan. Vietnam is its third overseas market in Asia after Taiwan and Thailand.

Vietnam is among 17 countries in the so-called "pharmerging" markets, a group of countries that are expected to be the pillars of the global pharma industry, according to U.S. information technology firm IMS Health. Its drug market is expected sustain growth of 10 percent annually for the next five years.

It grew 16 percent a year in 2015-2018, with sales currently topping $10 billion, global research firm Business Monitor International reported.