Thai supermarket and consumer products “speeding up”market penetration in Vietnam

The advantages of home appliances and vegetables

Searching on Google with the keyword “Thai home appliances”, 2.9 million results are shown in only 0.74 seconds. This is also consistent with the large coverage of Thai household goods in our domestic market at present. Refrigerators, air conditioners, electric cookers, etc. that "Made in Thailand" can be bought easily anywhere, from supermarkets to convenience stores, especially in big cities like Hanoi and Ho Chi Minh city.

Looking at the Customs Department’s statistical results forexported and imported goods, the advantages of home appliances imported from Thailand can be easily seen. While the total value of imports from Thailand by the end of Augustincreased slightlycompared to the same periodlast year, from $US 5.2 billionin 2015 to$US 5.41 billion (equivalent to 4.2%), imported home appliances increased sharply. By the end of August, 2016Vietnam imported home appliances with a value of over $US 680 millionSD, increased 47.4% compared to the same period of 2015. This item also leapt"machineries and equipment spare parts" group to become the largest imported type of goods from Thailand.

It is worth noting that home appliances imported from Thailandaccounted for 57.3% of the total import value of this type of goods imported to Vietnam at the same time. It is clearly in line with the strategy of Thailandacquiringmajorityshares of Nguyen Kim,the biggest electronics supermarket in Vietnam, in early 2015.

Together with the penetration of electronic merchandise, the remarkable information on imports from Thailand in the past few months is the rapid growth of vegetable products – a formidableopponent of our agricultural goods, one of the staple commodities of Vietnam.

According to the General Department of Customs, by the end of August, Vietnamimported vegetables from Thailand were worth almost$US 220 million, increasedby $US 86 million compared to the same period of 2015, equivalent to a growth of over 64%.

It really was a leap of Thai horticulture commodities if we took into account that the growth of this commodity in Vietnam was relatively low, only a year earlier. Specifically, by the end of August 2015, the value of imported vegetables from Thailand was only$US 134 million, a slight increase of 5.5% compared to the same period of 2014. It led to an increase of Thai imported vegetable market share from 34.7% of total import turnover of Vietnam in the first 8 months of 2015 to 41.6% by the end of August 2016.

However, in contrast to the strong growth of home appliances that would help domestic consumers to buy merchandise with high quality and affordable price from Thailand, the rapid penetration of agriculture commodities brought concern for our domestic agricultural production becauseour key agriculture commodities were fiercely competedfor in the home market.And with the fact that Thai peopleown Big C supermarket chain, which is considered as the biggest retail chain in Vietnam, the entry door of Thai vegetables and consumer goods is wide open.

In addition to the two items above, some notable items imported from Thailand may be mentioned: Machinery, equipment, tools and spare parts reached $US 525 million, increasedby 9.8%; automobile components and parts reached $US 437 million, increasedby 15%; whole-cars reached $US 390 million, increasedby nearly 63.9%, etc. By the end of August, a total of 14 products imported from Thailand reached the turnover of$US 100 million or more.

Which type of goods did we export to Thailand?

Despite being the underdog in the trade relationwith Thailand, it cannot be denied that Thailand is one of the most important trading partners of Vietnam. With the trade relations between the 2 countries situation in the first 8 months of the year, Thailand is our largest trading partner in ASEAN. On the global aspect, among more than 200 countries and regions havingtrade relations with Vietnam, Thailand is ranked 6th, behind China, the USA, South Korea, Japan and Taiwan (China).

By the end of August, our country exported to Thailand commodities with a valueof nearly$US 2.43 billion, increased by more than 10% compared to the same period in 2015. Among 36 major commodity groups exported to Thailand counted by the General Department of Customs, 5 groups had a turnover of$US 100 million or more (less than 9 “hundred million dollar” groups imported from Thailand). The most valued export commodity group was telephones and components with the value of nearly $US 500 million, increased by 22.1% compared to the same period in 2015.