Experts warn that three major hurdles -- illegal strikes, skyrocketing labor costs and lack of manpower -- are putting Korean companies there under fire.

In the case of textile, sewing and shoe factories, which depend on an abundant workforce, Korean owners have often failed to exert their position amid labor's perplexing demands but given in out of fear of walkouts that can inflict a heavy cost on their business.

Starting October last year Korean firms were ripped apart by a wave of strikes. Workers took to the streets, at times violently, demanding higher pay to keep pace with inflation and in the end secured wage hikes of as much as 50 percent.

The Vietnam Trade Union says the country has faced high inflation in recent years and strikes have become more common with around 300 strikes taking place at foreign-owned firms.

With a growing number of foreign companies flocking to Vietnam for its cheap labor, Korean firms are fighting it out to attract and recruit skilled and experienced workers from other companies. This ends up fueling even higher labor costs.

Vietnam has opened up an alternative for Korean firms to setting up shop in China where they've met with some operational difficulties. But it's clear that Koreans need to do their homework to succeed in Southeast Asia's fastest-growing economy.

Arirang News