Japanese Market Holds Opportunities for Vietnamese Enterprises

With great efforts by the people and governments pf Vietnam and Japan, the two countries’ ties have reached a record high. Accordingly, Vietnam-Japan trade and investment ties have seen rapid development. Import and export turnover between the two countries increased from US$4.52 billion in 2000 to over US$8 billion in 2005, almost doubling the figure of 2000. Noticeably, Vietnam’s export turnover to Japan gained a high growth rate, between 15 and 19 per cent on average. In 2004, Vietnam’s export turnover to Japan was put at US$3.79 billion, up by 16.6 per cent against 2003. In the meantime, Vietnam’s import value from Japan reached around US$3.12 billion. Vietnam’s export turnover to Japan was estimated at US$4.5 billion in 2005, accounting for 14.5 per cent of the whole country’s export volume and increasing by 18 per cent against 2004. Vietnamese enterprises made a contribution to the achievements. Despite their immaturity, Vietnamese enterprises have made efforts to get access to the market, expanding their exports effectively.

 

At present, Vietnam’s major exports to Japan include textiles, garments, seafood, crude oil, electric wires, furniture, handcrafts and footwear. In particular, Vietnam has a great advantage to export frozen shrimp to Japan. Since 2004, Vietnam has surpassed Indonesia in exporting shrimp to Japan with an annual export turnover of US$500 million, equal to 23 per cent of total frozen shrimp import value of Japan. Also, Vietnamese woodwork products have gained a firm increase in export turnover to Japan. Vietnam is the fourth largest woodwork exporter to Japan, behind China, Taiwan and Thailand. With a huge demand for woodwork products in the Japanese market, valued at around US$2 billion, a high growth rate of Vietnam’s woodwork export and efforts to expand markets of Vietnamese enterprises, Vietnam may have become the third largest exporter in late 2005. Vietnam’s woodwork export value to Japan increased from US$85 million in 2000 to US$163 million in 2005.

 

Those goods, which have good export prospects to Japan, include processed food, fresh fruit and vegetables, household mechanical products, and plastic and software in particular. In the coming time, via support from the Japanese Government, Vietnam will send experts to Japan to gain experience and get access to technologies for preventing insects which do harm to fruit and vegetables. According to a food safety expert from Japan, it takes between eight and ten years for a country to prepare for its fruit and vegetable export to Japan. As Vietnam has received great support and assistance from Japan, this time will shorten to between three and four years.

 

Bamboo export to Japan has seen a slowdown due to a fall in the demand, at between nine and ten per cent per annum since 2002. Vietnamese handicrafts still have poor samples and designs. Also, their prices are often higher than products of the same kind from China, Thailand and the Philippines. Therefore, Vietnamese enterprises should change their samples and designs, increasing creativity in their products to increase the value of their products.

 

Firstly, they should research and understand more about specific features of the Japanese market. Secondly, they should have a good understanding about fairs and exhibitions before joining such events to gain a high effectiveness. At the same time, participation in fairs and exhibitions in Japan will help enterprises introduce their new products and maintain their existing business ties with partners but not sign contracts immediately like fairs and exhibitions in the EU. Thirdly, they should improve the quality and value of their products, diversifying samples and designs. This is a tough requirement of Japanese enterprises. Vietnamese exporters should listen to ideas and comments made by Japanese consumers. Fourthly, they should focus on packaging. Japanese consumers, apart from attention to quality and samples, focus on quality and convenience of packages. For Japanese consumers, the value of packaging is sometimes more important than the value of the handicraft products inside. Fifthly, Vietnamese enterprises should promote the introduction of Vietnamese food to Japanese people, who have a huge demand for processed food, accounting for 40 per cent of retail sales of goods in Japan. Japanese people like Vietnamese food, so Vietnamese enterprises should diversify food products, increasing their capability of supplying processed food to the market.

 

Trade promotion has won much attention from ministries and agencies, as well as trade promotion agencies. Vietnamese enterprises are increasingly been aware of the importance of trade promotion in Japan. To create a good image of Vietnamese trade in each country, when attending trade fairs and exhibitions, enterprises should promote their co-operation to make the display area of Vietnamese goods more attractive. Otherwise, the strength of Vietnamese goods and the effectiveness of trade promotion activities will be reduced. In the coming time, in national trade promotion programmes, financial support should be provided to invite delegations of Japanese enterprises to Vietnam. This method does not cost much but is highly effective.

 

Since early 2006, the trade mission has worked with the organising boards of the biggest fairs and exhibitions in Japan, which Vietnamese enterprises often join, to seek support in the organisation and arrangement of Vietnamese enterprises’ pavilions, thus making them more attractive. As a result, the promotion of Vietnamese products to Japan will be as effective as products from other countries in the region, such as China, Thailand and Hong Kong. At the same time, we will strive to invite Japanese enterprises to Vietnam to seek business opportunities and partners. In mid-February 2006, we will invite a delegation of Japanese enterprises, including retail and wholesale companies within the Japanese supermarket chains, specialising in handicrafts, furniture and office items.

We will also continue to focus on gathering Japan’s market information and trade policies for enterprises, thus helping them understand more about the market. Every month, we publish an economic bulletin on the Japanese market and send it to relevant agencies, departments of trade and trade promotion agencies in Vietnam. We hope that this will act as a bridge between the trade mission and enterprises. To get information, enterprises can contact the e-mail address of the trade mission vntrade@dream.ocn.ne.jp  or jp@mot.gov.vn. At the same time, we will continue to act as a consultancy agency linking Vietnamese and Japanese enterprises, helping Vietnamese enterprises find partners to promote their exports.  or . At the same time, we will continue to act as a consultancy agency linking Vietnamese and Japanese enterprises, helping Vietnamese enterprises find partners to promote their exports.

Japan is one of the leading trade partners of Vietnam with a huge demand for commodities, including software, from Vietnam. Negotiations on Vietnam’s accession to the World Trade Organisation (WTO) between the two countries ended, affirming that Japan is a reliable and long-term partner of Vietnam. A wave of investment and trade of Japanese enterprises has become evident in some Asian countries, including Vietnam. The Vietnamese trade mission in Japan believes and wishes that Vietnamese enterprises will promote their co-operation in production and business activities, thus being able to meet large orders and increase their competitiveness, effectively meeting the requirements on integration with countries, including Japan. Vietnamese enterprises should strive for an import and export turnover of US$10 billion in 2006 and 2007.