With geographical advantages, close markets such as China and ASEAN are being chosen by many businesses in their business strategies to reduce costs.
Continuously receiving export orders to the Middle East and the US, but these orders are almost unprofitable due to high input costs. Mr. Pham Quang Anh - CEO of Dony Textile and Garment Company, informed that export businesses are suffering from a double negative impact: Freight prices increase and the USD also increases in value. Meanwhile, the textile industry must import up to 60% of production materials. This causes business profits to be eroded.
In that context, to maintain operations, the business has proactively adjusted and considered expanding to the Cambodian market for ease of delivery. According to Mr. Quang Anh, although Cambodia is a new market, the number of orders is quite abundant. Normally, the textile and garment industry will sell best during the Lunar New Year with the Vietnamese and Chinese markets and during the New Year with the European, American and Middle Eastern markets. As for the Cambodian market, because their Tet holiday falls in April 2024, it is in the opposite season with all other markets.
“The low season of the traditional market is the peak season of Cambodia. Thanks to that, businesses have enough orders to produce for the whole year. It is expected that by 2024, the company's sales will increase by 15%," Mr. Pham Quang Anh shared.
Assessing the export market, Mr. Nguyen Van Thu - Chairman of the Board of Directors of GC Food Joint Stock Company said that Vietnamese agricultural products continue to benefit from preferential tax rates thanks to free trade agreements (FTAs). ) signed with Korea and Japan.
According to Mr. Thu, from the beginning of 2024 until now, export orders to major markets have grown by up to 50%. In addition to old markets, the business will expand to neighboring markets such as China, India, Indonesia, and Malaysia. "Currently the company has temporarily suspended export orders to the Middle East market and shifted to more favorable markets such as China and Japan," said Mr. Nguyen Van Thu, Chairman of the Board of Directors of G.C Food Joint Stock Company. , share.
Mr. Dang Phuc Nguyen - General Secretary of the Vietnam Fruit and Vegetable Association said that China, Thailand, Korea and Japan are Vietnam's major fruit and vegetable export markets, accounting for 98% of total turnover.
These are markets with many advantages for Vietnamese fruits and vegetables such as close geographical location, convenient logistics, and fast shipping time to help reduce transportation costs as well as minimize risks in product quality. ... Besides, some ASEAN markets are not difficult markets, so they will be a place for businesses to test the adaptability of their products, thereby serving as a springboard to move into other markets.
Sharing the same opinion, Mr. Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers, also said that seafood processing enterprises are also increasing exports to the Chinese market. Along with that is expanding export connections to the Indian market. These are two very potential markets thanks to their large population and diverse consumer needs, from mid to high-end segments.
However, Mr. Hoe said that, along with the market shift, businesses need to be careful when trading. Information from commercial counselors said that there is currently a situation of taking advantage of the war, with some scammers offering large orders at good prices to defraud and appropriate goods. When there are such orders, businesses are advised to be cautious and verify carefully through the embassy and Vietnam Trade Office in the region.
At the same time, when dealing with importing businesses, businesses need to sign a payment contract in the form of a letter of credit, with a deposit, without paying any fees related to contract brokerage costs in advance. Invoice issuance fee as this is a common scam.
