Seize the golden opportunity as retail giants look for supplies in Vietnam

Domestic retailers eye export-quality products

Vietnamese furniture and handicrafts are attracting the attention of many international buyers. Photo: N.H

Foreign retail corporations step up purchasing

At the 2024 International Goods Supply Chain Connection Conference recently organized by the Ministry of Industry and Trade in Ho Chi Minh City, Mr. Yuichiro Shiotani, Director of Aeon Topvalu Vietnam, said that in 2023, Aeon has connected many partners from China, Cambodia and exported many Vietnamese products such as bananas, lychees, dragon fruit, and catfish in large quantities to these markets. Notably, many agricultural products such as bananas and fresh mangoes sold by Aeon store system in Hong Kong (China) are purchased 100 percent from Vietnam instead of Thailand and the Philippines as before. Aeon expects purchasing volume in 2024 to double compared to the previous year.

According to Nguyen Duc Trong, head of the division in charge of developing new suppliers for Walmart in Vietnam, Vietnam has so far exported US$7 billion worth of electronics, garments, toys and other goods to Walmart supermarkets globally. This group identifies Vietnam as a strategic purchasing location in the global supply chain.

Mirash Basheer, Director of Garment Exports Vietnam Company, Lulu Group, said that he has conducted research on the Vietnamese market to have sources of goods to export to the Middle East. In 2023, this Group attended the Vietnam International Sourcing event in Ho Chi Minh City and exported a number of Vietnamese products to the Indian market, helping export turnover increase by 15 percent in 2023.

Mr. Mirash Basheer also shared the orientation of developing a number of logistics centers in Vietnam, and also wanted to purchase bananas and coffee and have mobilized a number of buyers in the group such as Kuwait, Qatar, and Oman to participate in this year's International Sourcing Expo.

Paul Le, Vice President of Central Retail Group, said that currently 95 percent of goods distributed in Central Retail's supermarkets are purchased from Vietnamese suppliers, with many typical products such as shrimp, fish, mango, coffee, vermicelli...

In addition to purchasing to supply the Vietnamese market, Central Retail also wants to promote the export of Vietnamese goods to the world through supermarket systems abroad.

Many recommendations for Vietnamese suppliers

Although they have huge purchasing plans in the Vietnamese market, foreign retail giants also point out many limitations that Vietnamese manufacturers and suppliers need to improve in the near future.

Yuichiro Shiotani assessed that, despite having a lot of experience in the domestic market, Vietnamese enterprises still face certain difficulties in export markets. For Aeon Topvalue Group, Mr. Yuichiro Shiotani said he is focusing on choosing suppliers with green products. Specifically, Aeon will choose banana products from suppliers with low environmental emissions, coffee from units that ensure fair trade...

Nguyen Duc Trong said that Walmat buys from around 500 suppliers in Vietnam, but most are foreign-owned companies with Vietnamese ones mostly being secondary suppliers. According to Mr. Trong, Vietnamese businesses still face challenges in finding market information and meeting market requirements. Because of this limitation, even though there are many Vietnamese products on Walmart supermarket outlets, most of them have to go through a third party. Therefore, Vietnamese businesses need to be more proactive and improve their ability to learn and meet market requirements.

Do Ngoc Hung, a trade consultant for Vietnam in the U.S., said Vietnamese businesses should pay attention to the standards of distribution systems. The US distribution system is highly specialized, so selling directly to consumers is very difficult. Therefore, businesses need to successfully build a supply chain from wholesale to retail. Along with that, it is necessary to have a strategy for each item, develop distribution channels on e-commerce platforms and intermediary channels. In addition, businesses can coordinate with industry associations in states, distributors, and promotion agencies to participate in exhibitions, fairs, and expand connections...

Trade Counsellor at Vietnam's Trade Office in Sweden and concurrently responsible for Nordic countries, affirmed that Europe is still a potential market, but the requirements are increasingly strict and businesses need to change to meet.

For example, in the field of furniture and household goods, IKEA Group has developed the IWAY standard - Code of Responsible Purchasing and Sourcing - which is a core premise in business activities for IKEA suppliers. IWAY is how IKEA and its suppliers ensure responsible sourcing of products, services, materials and components, ensuring business activities for the environment, society, working conditions of workers and animal welfare.

Ms. Thuy emphasized that implementing IWAY standards is a prerequisite and mandatory for all supply partners and service providers when working with IKEA.

For food businesses, products not only meet mandatory EU requirements such as product safety, pesticide residues... but also must meet very strict requirements of buyers such as environmental certification, social responsibility...

“In general, for all product groups, the trend of more sustainable and responsible production and business is of increasing concern. This trend involves many aspects of the supply chain, including working conditions, water use, waste management, emission reduction... Enterprises' products will be accepted by Northern European buyers if they comply pursue sustainable initiatives" - Ms. Thuy said.