Exporting from Vietnam amid the global pandemic
While you may assume that ongoing travel restrictions would be detrimental to global trade and exports, and that these would especially create supply chain disruptions, a dramatic shift in consumer behavior has actually helped many SMEs increase profit margins. This is in great part due to the Internet playing such an invaluable role worldwide during lockdowns and isolation. With increased online engagement, there now remains a captive audience online just waiting to be reached. So if you’re a Vietnamese business hoping to attract international buyers, signing up for an online marketplace or investing in social media is a smart move.
In addition to this, Vietnam’s economy has been strengthened by the U.S - China trade war. US buyers are now looking to diversify their suppliers, and are reaching out to countries able to offer competitive prices due to low-cost manufacturing in Asia. Vietnam is perfectly positioned to take on this new opportunity.
However, it has still been challenging for Vietnam exporters to negotiate Binh Duong and Dong Hai’s extended stay-home orders and evening curfews. On the upside, however, Vietnam is currently prioritizing vaccinating workers from the Samsung electronics factory in the north of the country, as well as workers from the Intel electronics factory and various garment factories in Ho Chi Minh. ¹ This should therefore make exporting from these sectors easier.
It must be noted that Vietnam’s trade surplus fell from $2.94 billion USD in October 2020, to $1.1 billion USD in October 2021, which was mainly due to the country’s increased demand for imported goods.² However, this increase in domestic consumption is creating an opportunity for new businesses to start trading overseas. Moreover, Vietnam’s rapid growth in the manufacturing of exported goods and an increased interest from foreign investors is helping Vietnam’s economy quickly recover from the global pandemic.
COVID-19 has in fact amplified Vietnam’s profile as an emerging country to invest in. The ADB forecasts Vietnam to be one of the fastest-growing economies in SEA in 2021. The Ministry of Industry and Trade, meanwhile, reports that several of the world’s biggest technology corporations aim to shift their supply chain to Vietnam; all thanks to free trade agreements, low-cost manufacturing, and their ability to quickly adapt and react to a global pandemic.
Top-exported goods from Vietnam
For those who don’t know, Vietnam is considered one of the largest coffee exporters. In fact, the country has surpassed Brazil to become the world’s top exporter of coffee. Vietnam sells high-quality coffee to EU countries including Germany, Italy, and the Netherlands. Vietnamese coffee has an export value of $771 million USD, according to the Ministry of Agriculture and Rural Development.
After coffee, Vietnam exports also include garments and textiles, computer parts, electrical machinery, and the export of smartphones. Foreign companies flock to the ASEAN region for its affordable manufacturing costs, and US buyers take advantage of the fact that Vietnam currently has no import/export tariffs imposed.
While coffee, textiles, and electronics are among the top Vietnamese exports, there are also a substantial number of food and beverages. Read our article on the “5 best made in Vietnam food & beverage products to export globally” to find out more.
Top export destinations from Vietnam
Vietnam’s largest export market is the US, which means huge volume. Additionally, Vietnam’s economy is well on its way to achieving a growth of 6.5% (by the end of 2021). While US buyers account for a vast number of Vietnam’s export customers, the huge consumer markets of China and the EU are also close behind.?
Vietnam is strategically well-placed for exporting goods worldwide. Close to Hong Kong, Indonesia, Thailand, South Korea, and the Philippines, it is also well-positioned to meet the rising demands of those emerging middle-class markets across Asia who now have increased buying power. Investor-friendly Vietnamese exporters should seize this unique opportunity and expand overseas in 2021.
Why Vietnamese SMEs should sell internationally
The world has never been a more connected place. You can trade with almost any country and at any time, thanks to the rise and prevalence of global e-commerce. According to the Global E-commerce Update 2021, by eMarketer, e-commerce sales within retail grew by 27.6% worldwide in 2020.? In fact, Southeast Asia SMEs are said to be steadily gaining power, with over 9,000 companies in Malaysia and Singapore already selling goods online, and with 77% of those already serving customers overseas. The top seller from Malaysia generated a massive $34 million USD in Gross Merchandise Value during 2020, despite the global pandemic.
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