Opening up Export Channels

The European Union (EU) - one of three largest export markets of Vietnam - is negotiating a free trade agreement with Vietnam. As soon as the agreement is concluded, the EU, with a population of 500 million people, will open up new opportunities for Vietnamese goods. Likewise, Japan and the United States (US) also have a high demand for labour-intensive products - an existing strength of Vietnam. Besides, Japan and the US have become important economic partners of Vietnam as signed comprehensive economic agreements have paved the way for Vietnamese goods to enter.

 

Myanmar, which is baptised the "last fertile ground in Asia", has emerged as a promising market in recent years. For Burmese consumers, Vietnamese goods are highly valued. With a population of over 60 million and GDP per capita of US$500, about 30 per cent of upper and middle class people tend to consume economically while the country’s production remains weak. As 90 per cent of consumer goods are imported, this will be an opportunity for Vietnamese goods to penetrate this market.

 

While mentioning advantages, commercial counsellors also warned Vietnamese exporters that global economies, especially Vietnam’s key export markets, are facing internal difficulties. To protect their domestic production, many countries will raise strict trade barriers or resort to various measures to restrict imports.

 

Vietnam’s products have to compete fiercely with rivals from other countries. Meanwhile, the competitiveness of Vietnamese companies is very weak because they incur so many costs as high interest rates, lack information or misjudge markets.

 

For example, Myanmar is understood to have a low development level by many Vietnamese enterprises now. Nevertheless, this country is operating its economy under the market mechanism, and promoting cooperative relationships with many developed countries. Myanmar used to be a top rice exporter in the world.

 

Mr Vu Cuong, Vietnamese Commercial Counsellor in Myanmar, said "Economic development in Myanmar is very fast. This also means business opportunities will pass up very quickly here. If Vietnamese enterprises misjudge this market, they will hardly penetrate this market.”

 

Mr Nguyen Trung Dung, Vietnamese Commercial Counsellor in Japan, analysed that as each market has its own characteristics, companies hence need to understand carefully and grasp advantages from partners to seek cooperation opportunities for mutual benefit. Mr Nguyen Bao, Vietnamese Commercial Counsellor in Australia, also said, Vietnamese enterprises must consider long-term systematic business projects.

 

Vietnam is said to be carrying a plenty of trade promotion programmes but their efficiency is not high. Vietnam should accelerate industry-specific trade promotion at trade fairs which may require bigger budgets but produce better efficiency. According to experience in other countries, Vietnam should support foreign companies to buy goods in Vietnam while assisting foreign media agencies to write articles about Vietnamese products, services and brand names. Vietnam is also supposed to organise activities in importing countries, recommend corrections to misleading information about Vietnamese companies and products.

 

Mr Koos Van Eyk, Director of the CBI Programme in Vietnam, said many EU importers tend not to depend too much on China and they are looking for opportunities in other markets, including Vietnam. To grasp this trend, Vietnamese firms should understand legal requirements and product standards in importing countries.