Bright signals from major export markets

VCN - The quiet atmosphere of commercial activities in Vietnam's major export markets such as the US, EU... is forecast to end soon, along with the long-term attachment strategies of brands and retailers for the Vietnamese market is opening up bright prospects for production and export activities in the coming time. Meeting new environmental and social standards... will help Vietnamese businesses grasp the opportunity to recover.
Lacking processing technology, expanding agricultural export markets is still difficult Lacking processing technology, expanding agricultural export markets is still difficult
Exploring potential export markets from the Eurasian region Exploring potential export markets from the Eurasian region
Bright signals from major export markets
Commercial activities in Vietnam's key markets are forecast to warm up soon. In the photo: Ship docked at Gemalink port, Ba Ria - Vung Tau province.

New orders are coming back

Speaking at the Vietnam - US Trade Forum held on November 21, Mr. Greg Testerman, Chairman of AmCham Vietnam, assessed 2023 as a difficult year for exporters in Vietnam as well as many other countries. Currently, inventories in the US were still high. Meanwhile, according to annual tradition, the Christmas season was the most exciting season for retail, but this year the situation was forecast to be quite quiet. However, Mr. Greg Testerman also said that there were some signs that retailers and brands in the US would launch discount sales campaigns during the year-end shopping season to stimulate purchasing power. This would help resolve the large amount of inventory over the past year and new demands and new orders would return early next year.

Mr. Ed Gresser, former Assistant United States Trade Representative (USTR), Vice President and Director of Global Trade and Markets - Progressive Research Institute (PPI) also assessed that after the sudden increase in 2 last years due to pressure during the Covid-19 pandemic, purchasing power in the US decreased sharply in 2023. However, this situation would not last long and there would be a recovery in 2024.

In the EU market, Mr. Ta Hoang Linh, Director of the European - American Market Department, Ministry of Industry and Trade, said that in the third quarter of 2023, two-way trade turnover between Vietnam and the EU reached US$ 15.12 billion, down 1.5% over the same period in 2022. This decline slowed significantly compared to the 10% decline in the first quarter and the 9.7% decline in the second quarter of 2023. In addition, the EU economy was gradually recovering with inflation levels continuing to be adjusted, which would be a factor supporting consumption of goods in the region in the coming time, import would also gradually improve when inventories decreased and Year-end shopping demand increased. Therefore, Vietnam's goods export to the EU were forecast to recover from the fourth quarter of 2023. In particular, EVFTA was considered a great advantage for Vietnam when currently only 4 Asian countries had signed FTAs with the EU, only Vietnam and Singapore in ASEAN.

As for Vietnamese manufacturers, Mr. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), said that since the beginning of the fourth quarter of 2023, the order situation in Vietnam's textile and garment industry had begun to improve. Ms. Phan Thi Thanh Xuan, Vice President, General Secretary of the Vietnam Leather, Footwear and Handbag Association (LEFASO) also shared that although it did not return to the level of 2022, the order situation had begun to show positive signs.

Transforming production to create competitive advantage

Through discussions with large corporations, Mr. Ed Gresser said that labels in the fashion, apparel and footwear industries in the US all said that Vietnam was currently the second largest supplier with advantages in production costs; an increasingly skilled workforce; flexibility to produce many different types and designs of clothes... In terms of tariffs, Vietnam is also enjoying more incentives than China. Therefore, although purchasing activities declined in Vietnam in 2023 due to the impact of weak purchasing power, brands still affirmed to continue to attach with Vietnamese manufacturers.

Ms. Rama Chug, Vice President in charge of purchasing and apparel at Walmart, assessed that Vietnam was a very important supplier of Walmart. Currently, this world's leading retailer had a representative office in Ho Chi Minh City to search and purchase Vietnamese goods. According to Ms. Rama Chug, Vietnam had great potential to develop and expand market share in Walmart. Because after experiencing a supply chain crisis, Walmart had launched a strategy to ensure supply chain safety. Accordingly, this retailer was taking positive solutions to develop more suppliers and diversify supply sources to ensure stability for the supply chain.

Nike brand is also offering a similar strategy. Ms. Angela Ho, General Director of Nike Vietnam, said that Nike was trying to increase the resilience of the supply chain in Vietnam. Specifically, investing in innovation, automation and capacity development for staff in the company and suppliers.

Facing increasingly clear opportunities from the recovery of the market as well as the shift in the supply chain of brands, Vietnamese businesses must also overcome significant challenges from new requirements of brands related to environmental issues. If promptly converted, these challenges will turn into competitive advantages for Vietnamese businesses. Mr. Giovana Rojas, CEO of Target Vietnam, Thailand and Cambodia, said that mass production industries only focusing on productivity would be severely affected when the economy slowed down and purchasing power decreased. At the present time, under pressure from consumers, brands set up ESG requirements (environmental, social and governance) on manufacturers. Accordingly, production locations promptly meeting these requirements would have a superior competitive advantage.

Mr. Gabor Fluit, President of EuroCham Vietnam, also assessed that in order to effectively exploit trade and investment with the EU, compliance with EU regulations such as the Carbon Border Adjustment Mechanism (CBAM) and appraisal directive on corporate sustainability (CSDDD) was the key. Vietnam's adoption of a carbon pricing policy consistent with CBAM would make competition for Vietnam's export. Furthermore, compliance with CSDDD directives demonstrated Vietnam's commitment to sustainable, transparent business practices. Complying with these requirements would help Vietnam protect its existing trade relationships with the EU and open up opportunities for new relationships.

As one of the businesses that has pioneered the transformation to a green production model, meeting strict environmental requirements, Mr. Nguyen Quoc Khanh, Executive Director of Research and Development, Vietnam Dairy Products Joint Stock Company (Vinamilk) said that the initial investment cost for the conversion might be a barrier and a challenge, but in return, operating costs after the conversion would be lower, the brand image was more appreciated, and increased reliability for consumers helped businesses easily access more markets. Accordingly, the benefits earned when businesses converted to green and sustainable production according to market requirements would be greater than the investment costs of conversion.

By Nguyen Hien/ Binh Minh

Related News

Lao Cai Customs processes procedures for over 26,000 declarations

Lao Cai Customs processes procedures for over 26,000 declarations

VCN – In the first half of May, the import and export turnover of goods processed at Lao Cai Customs Department surges year-on-year.
Agricultural and food businesses increased profits thanks to export recovery

Agricultural and food businesses increased profits thanks to export recovery

VCN - Many agricultural and food exporters have recorded positive business results thanks to the momentum from the recovery of major markets and solutions to enhance deep processing, helping to improve product value and business efficiency.

Latest News

The auto industry does not shrink from many challenges

The auto industry does not shrink from many challenges

VCN - In the context of the import tax reduction roadmap being implemented when Vietnam participates in commitments in Free Trade Agreements, the pressure of competition on the Vietnamese automobile industry is also increasingly fierce. Therefore, in addition to tax and fee support, many breakthrough solutions and policies are needed to create a boost for the auto industry.
Traceability helps improve product value

Traceability helps improve product value

VCN - Traceability of origin has been and is a mandatory requirement for Vietnamese goods when exporting to several markets. The application of information technology and the use of QR codes is an effective solution in traceability, increasing value and promoting product consumption, especially agricultural products.
Vietnamese pepper prices see strong upward trend

Vietnamese pepper prices see strong upward trend

The Vietnam Pepper and Spice Association has expected pepper prices to continue rising every week.
E-commerce boosts exports of Vietnamese products

E-commerce boosts exports of Vietnamese products

Digital platforms have played a key role in helping Vietnamese firms take their high-quality products to the world, insiders have said.

More News

Increasing the value of rice grains from the project of 1 million hectares of high quality rice

Increasing the value of rice grains from the project of 1 million hectares of high quality rice

VCN - The implementation of the project of 1 million hectares of high-quality rice will contribute to promoting the transition from traditional farming methods to synchronous mechanization, developing large-scale, stable and long-term concentrated raw material areas, ensuring sustainable and effective farming quality and minimizing environmental pollution. Vietnam is also the first country in the world to build a large-scale project on sustainable rice production and reduced emissions.
Hai Phong Port strengthen solutions to improve cargo handling capacity

Hai Phong Port strengthen solutions to improve cargo handling capacity

VCN - The flow of goods passing through Hai Phong port area has tended to improve recently.
Five trends in exporting through e-commerce

Five trends in exporting through e-commerce

VCN - On May 22, 2024, Amazon Global Selling announced the prominent cross-border e-commerce (CBEC) trends shaping Vietnam's online export economy. Concurrently, it launched phase two of the program "CBEC: The breakthrough era" in collaboration with the Vietnam e-Commerce and Digital Economy Agency (iDEA) under the Ministry of Industry and Trade.
Vietnamese firms urged to watch global trade policies

Vietnamese firms urged to watch global trade policies

Experts say Vietnamese firms should keep an eye on global trade moves by major economies to figure out how best to promote the consumption and export of products made in Việt Nam, in the context of a glut of cheap Chinese goods flooding the world market.
Vietnam’s tra fish export tipped to bounce back

Vietnam’s tra fish export tipped to bounce back

Vietnamese tra fish export has roared back to growth after a significant drop recorded earlier this year as countries have scaled up their imports, according to insiders.
FDI attraction in five months tops 11 billion USD

FDI attraction in five months tops 11 billion USD

More than 11.07 billion USD in foreign direct investment (FDI) was funneled into Vietnam during January-May, up 2% against the same time last year, according to the Ministry of Industry and Trade (MoIT)’s Foreign Investment Agency.
What to do to develop Vietnam

What to do to develop Vietnam's automobile industry when implementing FTAs?

VCN - On May 24, Customs Magazine organized a discussion on the topic "Vietnam's automobile industry implements the Free Trade Agreement: In which direction to develop?"
The processing and manufacturing industry increased by 6.3% in four months

The processing and manufacturing industry increased by 6.3% in four months

VCN - Continuing the recovery momentum from the end of 2023, industrial production in April and the first four months of 2024 continues to show a positive trend. Of which, the processing and manufacturing industry increased by 6.3%.
Capital city to become an agriculture hub

Capital city to become an agriculture hub

The city’s cash crops were said to not require a large cultivating area but a high standard of production and processing, which have been identified as a solid foundation to penetrate foreign markets.
Read More

Your care

Latest Most read
Agricultural and food businesses increased profits thanks to export recovery

Agricultural and food businesses increased profits thanks to export recovery

VCN - According to data from the Ministry of Agriculture and Rural Development, agricultural, forestry and fishery export turnover in April reached 5.14 billion USD, an increase of 19.7% compared to April 2023.
The auto industry does not shrink from many challenges

The auto industry does not shrink from many challenges

VCN - In the context of the import tax reduction roadmap being implemented when Vietnam participates in commitments in Free Trade Agreements, the pressure of competition on the Vietnamese automobile industry is also increasingly fierce. Therefore, in addi
Traceability helps improve product value

Traceability helps improve product value

VCN - According to Dang Phuc Nguyen, General Secretary of Vietnam Fruit and Vegetable Association, currently, linking production with consumption of agricultural products plays a very important role in agricultural development, helping to enhance the bene
Vietnamese pepper prices see strong upward trend

Vietnamese pepper prices see strong upward trend

The Vietnam Pepper and Spice Association has expected pepper prices to continue rising every week.
E-commerce boosts exports of Vietnamese products

E-commerce boosts exports of Vietnamese products

Digital platforms have played a key role in helping Vietnamese firms take their high-quality products to the world, insiders have said.
Mobile Version