Italian businesses are flocking to Vietnam to find opportunities in a wide range of fields, from footwear to interior design products.
|A delegation of 26 Italian enterprises showcased machinery and equipment for the footwear and leather-related industries at Shoes & Leather Vietnam 2018 |
Paolo Lemma, Italian trade commissioner to Vietnam, said that Vietnam is becoming a prospective hub for Italian companies to set up business and capitalise on the country’s young population and rising disposable income. Italian companies have expressed interest in various sectors including footwear, plastics, fashion, food and beverage, as well as high-end interior furniture.
He is also upbeat about the positive prospect as Vietnam and the EU are likely to sign the EU-Vietnam Free Trade Agreement (EVFTA) soon. The FTA will allow Vietnamese companies to access the European market while opening up opportunities for Italian companies.
He elaborated that Vietnamese exporters need to be compliant with the EU's strict import regulations, such as healthy and environmentally friendly products. To meet the requirements, Vietnamese companies should upgrade equipment and technology to meet European standards, which is likely to increase the sales of Italian machinery in Vietnam.
Comelz Italia, specialising in providing CNC cutting machines for the bag and shoes industry, has recorded an annual growth rate of 40 per cent in Vietnam. Fabrizio Bellagamba, Far East area manager of Comelz Italia, said that Vietnam is the company’s fastest growing market in the world. The company has established a representative office in Ho Chi Minh City in 2012 to tap into the market’s growth.
He said the majority of its clients in Vietnam are foreign manufacturers from Taiwan and South Korea. The company has sold 100 machines in the country in 2017 and another 140 machines in 2018. It is also expected to increase sales to Vietnamese footwear makers who are looking to climb up the value chain and penetrate in the overseas market.
Comelz Italia was among the 26 Italian enterprises showcasing machinery and equipment for the footwear and leather-related industries at Shoes & Leather Vietnam 2018. Most of the companies participating in the expo already had suppliers, agents or representative offices in Vietnam. However, they are looking for further opportunities in the emerging market, fostering cooperation with Vietnamese enterprises and searching for new partners.
According to the Italian Trade Agency, the export turnover of the Italian leather and footwear sector reached EUR440 million ($516.19 million) in 2017, up more than 10 per cent on-year. In Vietnam, the export value is even more remarkable. The sales of machinery and equipment in the sector were over EUR30 million ($35.19 million) in Vietnam, doubling on-year.
Last month, seven Italian companies specialising in furniture and interior design also paid a working visit to Vietnam to explore the market. Well-known Italian brands include Badari Lighting, Cantori, Diemme Cucine, Formitalia, Officina Luce, Sicis, and Versace.
The Italian businesses agree that there is immense potential for partnership between the two countries in the field. Vietnam’s furniture imports over the last three years grew at an average annual rate of 33 per cent. Meanwhile, Italy leads in the EU and is third in the world as a source market, accounting for almost seven per cent of Vietnam’s furniture imports.
Vietnam’s urbanisation rate grows by 3.4 per cent each year, making it the fastest in Southeast Asia. The supply of residential buildings, hotels, and resorts is increasing at an annual average of 20 per cent, especially in Hanoi, Ho Chi Minh City, and main tourist destinations. The development of the real estate market is expected to continue to have a major impact on high-end furniture demand. These positive indicators have enhanced the interests of the Italian furniture and interior design products in Vietnam.