Global retail giants set sights on Vietnam, recognizing its potential as a major manufacturing hub capable of supplying diverse, high-quality, and competitively priced products to the world market.
EXPORTING THROUGH TRANSNATIONAL SUPERMARKETS
At the “International Supply Chain Connection 2024” seminar organized by the Ministry of Industry and Trade on April 12, 2024, in Ho Chi Minh City, Mr. Ta Hoang Linh, Director of the European – American Market Department, Ministry of Industry and Trade, announced that major global purchasing companies such as: Aeon, Uniqlo (Japan); Walmart, Amazon, Safeway (USA); Falabella (Chile); Carrefour, Decathlon (France); Central Group (Thailand); Coppel (Mexico); IKEA (Sweden), LuLu (UAE)… along with hundreds of buyers will participate in the “International Supply Chain Connection 2024” (Vietnam International Sourcing 2024) event series in early June 2024 in Ho Chi Minh City, to seek quality products from Vietnamese enterprises.
Currently, the Central Retail retail system (Thailand) continues to seek additional Vietnamese strengths to include in its system and export abroad.
“Within Central’s supermarket system, 95% of the products are Vietnamese. Examples include: Ca Mau shrimp, basa fish, Hoa Loc sand mango… The company is currently looking to develop coffee from Vietnam as a supply source. With 2 billion people worldwide drinking Espresso coffee every morning, the demand is still very high. The Group is exploring and promoting the construction of a factory in Son La to produce green coffee,” revealed Mr. Paul Le, Vice President of the Central Retail Group.
Meanwhile, Mr. Yuichiro Shiotani, Director of Aeon Topvalu Vietnam, said that in 2023, the group invited many buyers from China, Cambodia, and Hong Kong. It successfully exported products such as bananas, lychees, dragon fruit, and catfish in large quantities, which were well-received by consumers. Aeon’s goal by 2025 is to export one billion USD worth of Vietnamese goods through the Aeon system.
“This year, the company is focusing on apparel, household goods, and food groups. Agricultural products such as bananas and fresh mangoes will be procured by Aeon 100% from Vietnam instead of Thailand and the Philippines as before. The planned production will double compared to 2023”, said Mr. Yuichiro Shiotani.
Sharing the success of “Vietnam International Sourcing 2023”, Mr. Mirash Basheer, Director of May Exports Vietnam, Lulu Group, said that the company had sourced and exported to the Indian market. As a result, the company’s export turnover in 2023 increased by 15% compared to 2022.
“Through this year’s event, the company mobilized purchasing delegations from countries such as Dubai, Oman, and Kuwait. The company also hopes to procure additional Vietnamese products such as bananas, coffee, etc., as it has a large distribution system in the Middle East and Malaysia,” added Mr. Mirash Basheer.
Ms. Do Hong Hanh, Director of Strategic Partnerships for Amazon Global Selling Vietnam, also achieved certain results through the 2023 supply connection. She shared that during the event, up to 50% of the enterprises were a suitable match in terms of capacity and aspirations. After the event, approximately 30% of the enterprises were prepared and could participate in exporting on Amazon. From September 2023 to March 2024, 3% of Vietnamese enterprises successfully exported and generated revenue. Currently, around 20% of enterprises are still in the process of preparing product documentation and strategies to expand their exports.
ARE VIETNAMESE ENTERPRISES WILLING TO PARTICIPATE?
The Vietnam International Sourcing 2024 event will be an even better opportunity for Vietnamese enterprises and manufacturers to find valuable orders and expand their customer base. This trade promotion activity will also help Vietnamese goods and enterprises participate more deeply in the global production and supply chain. This is one of the goals that the program aims to achieve.
According to the Organizing Committee, foreign enterprises are particularly interested in Vietnamese strengths such as agricultural products, processed food, forest products, and processed – manufactured industrial products.
However, seizing opportunities and connecting with customers is not easy for Vietnamese enterprises. To secure additional orders from global buyers, Vietnamese enterprises must continuously “upgrade” their supply capacity and produce according to green trends, ensuring products can be recycled.
According to Mr. Yuichiro Shiotani, meeting the standards of each country requires significant investment and effort in research. Vietnamese enterprises have the potential to meet these standards; the important question is whether they are willing to do so?
Even Aeon is focusing on selecting suppliers who are committed to developing green manufacturing. For example, for banana products, the company will choose suppliers that produce with low environmental emissions, while for coffee products, it will choose companies that ensure fair trade at the purchasing location.
Regarding the US market, Mr. Nguyen Duc Trong, Head of New Supplier Development at Walmart, said that approximately 500 enterprises are currently supplying goods to the supermarket. However, the majority are FDI enterprises, while purely Vietnamese enterprises account for a very small proportion and are primarily secondary suppliers.
According to Mr. Trong, although they have the capacity to supply Walmart, Vietnamese enterprises still face certain difficulties when accessing the US market. These challenges primarily involve finding market information and meeting market demands. Currently, the quantity of Vietnamese goods in Walmart supermarkets is not insignificant, but most are sourced through third-party companies.
The “International Supply Chain Connection 2024” event series has secured the participation of the Commercial Affairs Office and branches of the Vietnamese Commercial Service abroad with extensive promotional activities for the event among importers, distribution channels, and foreign business associations to invite international purchasing delegations to attend in various forms tailored to each host country.
Providing additional information on the US market, Mr. Do Ngoc Hung, Vietnam’s Commercial Counselor in the US, said that systems like Walmart, Costco, and Amazon focus on the consumer, placing great emphasis on product quality and price. In particular, they prioritize controlling input quality, ensuring green criteria, and environmental and labor responsibility.
To expand exports to the US market, Vietnamese enterprises and industry associations must address the standards of these distribution systems. For the US market, the US distribution system is highly specialized, making it challenging for direct sales to consumers. Therefore, enterprises need to successfully establish a supply chain from wholesale to retail, develop strategies for individual products, strengthen distribution channels on e-commerce platforms and through intermediaries, and more.
“It is expected that IKEA, CTFood, Asia-Link, and a delegation of Latvian enterprises organized by the Latvian Chamber of Commerce and Industry will attend Vietnam International Sourcing 2024”, Ms. Thuy added.
