Vietnamese coffee has many export opportunities when China increases demand

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China is a potential market for many agricultural products of Vietnam, in which the potential for importing Vietnamese coffee is still very large. Photo: Internet

Great import potential

According to Mr. Do Xuan Hien, Chief of Office of the Vietnam Coffee-Cocoa Association, China's potential for importing Vietnamese coffee is still very large.

Explaining this statement, Mr. Hien said that coffee exports to China reached over US$109.5 million in 2018; over US$101.4 million in 2019; over US$95.6 million in 2020; over US$128.4 million in 2021, and in the first four months of this year reached over US$44.2 million. Notably, China has been a major import market for Vietnam's coffee since 2018. "China was Vietnam's 12th largest coffee import market in 2018, it had risen to 10th in 2019; 9th in 2020 and 8th in 2021," Mr. Hien said.

According to the Trade Promotion Department (Ministry of Industry and Trade), as the country with the largest population in the world, China is a very potential market for many Vietnamese products, including beverages. Vietnamese tea and coffee hold an important position in the Chinese market. Currently, tea is still China's traditional drink, but China's coffee consumption demand is on the rise, especially in developed areas.

In the Chinese market, instant coffee is taking a large share thanks to its convenience. Besides, China's social development, changing lifestyle and acceptance of new cultural trends by Chinese consumers also contribute to the increasing demand for instant coffee in this country.

According to market research firm Mordor Intelligence, the Chinese coffee market is forecast to grow at an average of 10.42% per year in the 2022 – 2027 period. Meanwhile, information from the China Coffee Association (CCAB), shows that coffee consumption in the country is growing at an average annual rate of 15%. Although China is a country that has suffered significant consequences from the Covid-19 pandemic, this has not reduced consumer demand for coffee.

China's coffee market has a diversified supply from nearly 80 countries. The main coffee supplying markets for China include Guatemala, Ethiopia, Vietnam, Malaysia, Brazil. Besides tea and coffee, China also imports many other drinks such as fruit juice and milk.

Preparing a business plan carefully

Mr. Ly Thanh Hai, Director of Business Development for the whole China market (Trung Nguyen Legend Group), said that the most important thing for foreign enterprises when planning to join the Chinese market is it is necessary to prepare the mentality. Despite being a market with great purchasing power, China was no longer an easy market. Even Chinese consumers were demanding in terms of new products. Therefore, if not improving products regularly, it would be difficult for enterprises to conquer consumers and develop long-term in this market.

The next factor mentioned by Mr. Hai was that enterprises should clearly define participating in the Chinese market as a long-term journey and investment, prepare a business plan, and have enough resources for a minimum of 3-5 years.

"Before opening an office in China, it took us more than a year just to build a plan, prepare resources and five years to prepare to sell Trung Nguyen Legend branded products here," Mr. Le Thanh Hai said.

Representatives of some other enterprises trading coffee in the Chinese market said that knowledge about the local market was a necessary factor. The easiest option was through the local HR system. This team would help enterprises save a lot of time for project implementation, quickly grasp the market, avoid legal mistakes, connect with many partners and especially enjoy many preferential policies of the locality.

Besides, when participating in the market, enterprises should quickly connect with enterprises in the same industry, their country's mass organizations in China such as the Embassy and the Vietnam Trade Office. This was an important method to help them develop business systems and connect with partners.

Recognizing China as a large but highly competitive market, Mr. Le Hoang Tai, Deputy Director of the Trade Promotion Department, recommended that in order to export Vietnamese beverages in general and coffee in particular to this market, enterprises should actively promote trade, innovate designs, product packaging and improve quality, to meet the increasing demands of Chinese consumers. In addition, enterprises should focus on promoting the communication of their products and brands.

Mr. Truong Te Dong, Chairman of Chongqing Beverage Association (China), said: "In the context of fierce competition, finding a breakthrough to expand the market is a very important issue for foreign enterprises to access China's beverage market.”