VietNamNet Bridge – Instead of squeezing into China by exporting goods in small volume across the border, the way that Vietnamese enterprises have been following for the last many years, they now attempt to find a new way to penetrate the world’s biggest market.
The Vietnam High Quality Goods Production Enterprises’ Association and its member companies would leave for China to look for the opportunities to access modern distribution channels. They would have working sessions with production partners and trade consultants in China in early May.
Vietnamese enterprises do not hide their plan to take full advantage of the ASEAN+1 agreement to penetrate the Chinese market in a formal way and try to develop modern trade channels.
Nguyen Lam Vien, General Director of Vinamit, said that Vietnam would not be able to boost exports to China and increase the export turnover, if it only relies on cross-border exports. The exporters are mainly small merchants in the border area; therefore, they do not have deep knowledge about the Chinese market.
In the last many years, Vietnam’s exports across the border have been unstable. Vietnamese merchants do not know exactly the actual demand from China, because no export contract is signed. They simply carry goods to the border areas and then seek buyers. In many cases, Chinese merchants refuse to purchase the goods, or only accept low prices. Vietnamese enterprises cannot control the prices.
However, it would be not an easy task to penetrate the Chinese market through the official channel. The gap between the price of goods provided by merchants and the goods available at supermarkets is still big, at 50 percent.
Another big barrier for Vietnamese goods to penetrate the market is the difficulty in registering trademark. A lot of Vietnamese well known brands have been lost in the Chinese market, simply because Chinese businesses had registered the trademarks before already.
Analysts have pointed out that the best way to boost exports to China is to minimize the exports through unofficial channel. Once Vietnamese goods can be officially distributed by the supermarket chains, they would be able to enter in the accounts the expenses on fees, taxes, thus allowing Vietnamese enterprises to take initiative in the “game.”
Nguyen Trung Dung, President of Vifon, has said that Vietnam would not succeed if its enterprises do not join forces to penetrate the market. He thinks that it would take less time to penetrate into the Chinese market if enterprises can receive the support from the predecessors which have been operating in the market already.
“Besides, offering diversified goods proves to be the good way to have more power in the negotiations on bringing Vietnamese goods to Chinese supermarkets,” he said.
Vifon, for example, has been penetrating the Chinese market through the distribution channel of Vinamit, according to Dung.
Vietnamese businesses have expressed their worry about the increasing development of counterfeit goods in China. Most recently, counterfeit Vinamit’s products and Buon Ma Thuot coffee have been available on the market. This would be the biggest barrier that may hinder Vietnamese goods trade in the market.
Vien from Vinamit, which specializes in dried farm produce, had to follow legal procedures to claim the well known brand back.
In the latest news, the negotiation with the Shenzhen Trade Center on the reserving of 6000 square meters of the business premises here for Vietnamese enterprises has nearly wrapped up. It is expected that the Vietnamese enterprises, when set up booths at the trade centers would enjoy special preferences in the first five years of operation.
Vu Kim Hanh, Director of the Center for Business Support, said that this is really a big advantage for Vietnamese businesses to enter the vast market, but they would have to do many things more to develop.