Developing Effective Branding Strategies for CPTPP Markets

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has been a key factor in Vietnam’s export growth since its implementation over four years ago. However, to seize new opportunities, businesses need to develop their brands and adopt new strategies for CPTPP markets to penetrate them more deeply.

Vietnam regards Canada as a promising destination for its garment and textile exports, which are projected to reach a value of up to US$10 billion annually

Mr. Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, stated: CPTPP has effectively boosted export growth and expanded Vietnam’s market access to CPTPP countries. The export value of Vietnamese goods to Canada and Mexico has increased remarkably at a double-digit rate, even amid the COVID-19 pandemic. Exports to the Peruvian market have even surged by triple digits.

Commenting on the benefits of CPTPP in Canada, Ms. Tran Thu Quynh, Commercial Counselor of the Vietnam Trade Office in Canada, reported that the export value to Canada has risen by 110% in five years, from US$4.1 billion in 2018 to US$9.9 billion in 2022. “CPTPP has a positive impact and enhances the development of supply chains, transportation and logistics between the two countries,” she said.

Yet to grasp opportunities as expected

Although the export value to CPTPP markets has grown significantly, it is still low and does not reflect the potential of the market. A notable issue is that Vietnam’s exports to CPTPP markets are mostly produced by foreign-invested enterprises and carry foreign brands, while domestic enterprises mainly export subcontracted goods or raw materials. Many of Vietnam’s key exports lack distinctive branding or competitiveness. Ms. Quynh also highlighted the disparity between domestic and FDI enterprises in utilizing CPTPP benefits. For instance, in Canada, more than 60% of goods imported from Vietnam are manufactured by foreign-invested enterprises. “Around US$4 billion, or about 60% of Vietnamese products, qualify for zero CPTPP tariff but companies have not taken advantage of it,” she remarked.

A representative of the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade explained that exporters are predominantly small and medium-sized enterprises and they export their products through export processing chains or input materials for foreign manufacturers and processors. After buying Vietnamese goods, foreign enterprises reprocess, package and export them under their own brands. As a result, Vietnam’s added value and brand recognition are still very limited. For example, 95% of industrial export value is dominated by globally branded FDI international enterprises. In textile and garment value chain and leather and footwear value chain, exports are mainly low-value processed goods. Intermediaries take a large portion of these exports of Vietnam while only a few enterprises can export their products with their own brand names.

Building brands, changing market approaches

Experts recommend that Vietnamese companies should adopt new strategies to build and position their own brands in order to increase their presence and export value in CPTPP markets. They should create distinctive and sustainable brand values that enhance the value of Vietnamese goods and leverage the opportunities from new generation FTAs.

A Vietrade official advised that businesses should actively learn and participate in trade promotion to utilize the reputable national brands, industry brands, geographical indications and collective trademarks of Vietnam when they enter new markets. Besides devising effective branding strategies, they should also focus on regular communication plans; register and protect intellectual property rights for their products and brands in foreign markets.

In the previous period, the Ministry of Industry and Trade, through core programs such as the national trade promotion program, the national branding program, Vietnam food industry branding program, has consistently implemented branding development at three levels: national, sectoral and corporate/product.

With the close guidance of the Government, the close collaboration of central and local agencies and the active partnership of the Vietnamese business community, trade promotion and branding development have achieved remarkable success. For instance, at the national level, the Vietnam National Branding Program has strived to build and promote the image of Vietnam as a country of quality goods and services, thus strongly advancing Vietnam’s national brands on the international brand map.

At the sectoral level, among various strong exports of Vietnam, the Ministry of Industry and Trade chose to prioritize the agricultural and food industry for brand building, thus enhancing the Vietnam food brand along with nine agricultural products: Food, seafood, coffee, cashew nut, pepper, tea, honey and coconut, for further branding. Furthermore, associations such as Lefaso, Viforest, Vitas, and VASEP have all actively developed their export communication strategies to increase their brand awareness as well as improve the competitiveness of Vietnamese export industries.

At the business level, with their persistent efforts, some companies have exported their products with their own brand names such as Trung Nguyen coffee, Vinamilk dairy products, Viettel telecom services and Vinfast electric vehicles. All of these results have generated very positive impacts on potential markets, including CPTPP member countries, thus motivating and facilitating Vietnam’s export industries and businesses to expand their market share or brand values in traditional markets while accessing and penetrating new ones.

In the coming time, the Ministry of Industry and Trade will instruct its units to apply solutions to raise awareness of all levels and sectors about the importance, role, and necessity of product branding and enhance capacity for brand building, development and management.

Additionally, the ministry will further support associations in developing competitive strategies for industry brands and building and promoting geographical indications; and encourage and assist businesses with national brands and potential businesses to develop their brands, thus helping position Vietnamese product brands in the international market.

By Huong Ly, Vietnam Business Forum