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.
Nam
Phong
Business & Investment Opportunities
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