Opportunities and challenges for Vietnamese businesses to conquer the international markets

December 20, 2021 | 07:45
Despite several challenges, many Vietnamese businesses and manufacturers are venturing into foreign markets as part of their development journey. Fortunately, they have received much assistance from the government, industry associations, and the business community to gradually realise this goal.

According to the Ministry of Industry and Trade, there are both opportunities and challenges for import and export activities in the second half of 2021. As the COVID-19 pandemic is developing unpredictably in Southeast Asia, one key factor affecting the growth of import and export will be whether the pandemic is brought under control.

Recognising this, several businesses and manufacturers have stepped up exports through e-commerce to take advantage of the boom of the channel during the past two years. Although they have swiftly adjusted to the new circumstances, they still face some obstacles, such as a lack of knowledge of export rules, stringent product quality requirements in foreign markets, and other challenges related to transportation, payment, and customer service. All of these issues have had an impact on the growth rate of cross-border e-commerce for Vietnamese businesses and manufacturers.

On December 3, Amazon Global Selling has released its 2021 Small and Medium Enterprise Empowerment Report in Vietnam. The report cited Dang Hoang Hai, director of the Vietnam e-Commerce and Digital Economy Agency (IDEA) under the Ministry of Industry and Trade (MoIT): "Despite the enormous benefits of business expansion to the global market, many Vietnamese businesses are still hesitant to do so. They are not only unfamiliar with the cross-border e-commerce concepts and procedures but also lack expertise and abilities in this field."

Opportunities and challenges for Vietnamese businesses to conquer the international markets
Amazon released its 2021 Small and Medium Enterprise Empowerment Report in Vietnam

Besides issues related to procedures, another challenge for Vietnamese businesses is to build their brands in foreign markets. Minh Long I Co. Ltd. is one of the Vietnamese brands that has successfully launched products and operated business on Amazon's online stores.

The representative of the firm said, "In Vietnam, Minh Long Long has built a reputation as a high-class ceramics brand with a strong national cultural spirit. When it comes to ceramics, most people refer to Minh Long. However, when bringing our products to the world, it was almost as if we had to start our branding journey from the very beginning. At the same time, we understand the importance of positioning our brand in international markets, especially on global e-commerce platforms like Amazon."

These challenges do not hinder Vietnamese businesses from boosting cross-border e-commerce activities. Vietnam has bright export prospects through e-commerce. According to the latest report by Amazon, from September 1, 2020 to August 31, 2021, the number of Vietnamese small- and medium-sized enterprises (SMEs) selling on Amazon has increased by 15 per cent on-year.

Also, Vietnamese businesses sold nearly 7.2 million products to Amazon customers globally, up 34 per cent on-year despite the pandemic. The figures show that "Made in Vienam" products have received more interest from foreign customers, which holds great potential for further development.

Opportunities and challenges for Vietnamese businesses to conquer the international markets
Livespo spore probiotics, a favourite health care product on Amazon

It is worth mentioning that some of Amazon's most popular products have come from Vietnam's key manufacturing sectors. Domestic appliances, kitchen tools, textile products, household devices, and health and personal care products are among the top 5 best-selling Vietnamese products on Amazon in the previous year. This demonstrated that the domestic manufacturing industry is on the right track to tap into the global market.

For Vietnamese firms, cross-border e-commerce will be a viable and profitable export trend.

Overcoming obstacles for "Made in Vietnam" products in global markets

Government agencies and industry groups are collaborating to implement a variety of practical and comprehensive activities to assist Vietnamese firms to overcome challenges and grasp new business trends. The MoIT is leading a number of initiatives to increase exports like implementing Resolution No.63/NQ-CP dated June 29, 2021 to stimulate economic growth and sustainable export.

The ministry has organised trade promotion as well as supply and demand connection events in Vietnam and other foreign markets. In addition, the MoIT's IDEA has inked a collaboration agreement with Amazon Global Selling Vietnam in 2019. The two plan to strengthen the partnership in 2021 to support Vietnamese enterprises to fully realise the potential of cross-border e-commerce.

Opportunities and challenges for Vietnamese businesses to conquer the international markets
Amazon cooperates with associations to bring "Made in Vietnam" products to the international market

Many large industry associations such as the Vietnam Textile and Apparel Association (VITAS) and the Vietnam Small and Medium Enterprises Association have also expressed their intention to support their members to develop business on e-commerce channels like Amazon.

Nguyen Thi Tuyet Mai, deputy general secretary of VITAS said that during his term, Prime Minister Nguyen Xuan Phuc has assigned the textile industry to have at least 30 brands having a major influence in the world market by 2030, based on shopping and consumption tendencies during the global pandemic. To realise the goal, the association invited firms to join local e-commerce platforms in the near future to improve sales abilities and e-commerce activities as well as join cross-border e-commerce sites such as Amazon.

Opportunities and challenges for Vietnamese businesses to conquer the international markets
The 2021 Cross-Border E-Commerce Conference took place on December 14-15

Amazon Global Selling has recently organised the 2021 Cross-Border E-Commerce Conference on December 14-15 to connect relevant stakeholders to support export activities via e-commerce as well as provide valuable information for Vietnamese sellers. The conference saw the participation of experts from the MoIT, Hanoi Association of SMEs, and industry associations.

Most notably, businesses that have been successful on Amazon have shared their inspiring stories to encourage more Vietnamese businesses to expand to the international market. With this year's event, Amazon Global Selling hopes to increase its support for Vietnamese sellers to expand overseas through branding activities, cross-border e-commerce knowledge, and assistance with setting up and maintaining a business.

By Thanh Van

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