The growth rate is forecast to maintain the next five years. That explains why more and more enterprises from Thailand have flocked to Vietnam to find investment opportunities and increase market shares.
The General Department of Vietnam Customs’ analysis showed that in 2019, the two countries’s trade turnover reached US$17.5 billion. It is projected to reach US$20 billion at the year end of 2020 and $30 billion by 2025.
Thai commodities popular in Vietnam comprise completely built units (CBU) cars, machinery, equipment and tools ; home appliances and accessories; computer sets and electronic products and plastic products. The import revenue of these items accounted for 7 percent to nearly 14 percent of the country’s total turnover of import from Thailand.
After ASEAN Free Trade Area (AFTA) was signed, more Thai commodities comprising animal feed and materials, gas, metal, rubber, plastic materials, fruits and vegetables, textiles, shoes, bio-products, cosmetics and dairy products are consumed in Vietnam.
Director Phan Nhu Huy of Swanco Company said that sales of Thai cosmetics have gone up by 20 percent-30 percent from 2016 until now. In the first nine months of 2020, despite impacts of Covid-19, purchase power of these products in Vietnam maintained at 20 percent-30 percent.
Ms. Pham Khanh Ha, representing for Trung Huy distribution agent of household appliances of well-known brand names such as Zebra, Kiwi, Sola, and Ocean said from 2000 till now, sales of Thai commodities in Vietnam have grown by 20 percent.
In addition, Thailand-based conglomerate Central Group, through its subsidiary, has taken the control of the Vietnamese electronics retailer Nguyen Kim. Before acquiring Nguyen Kim, Central Group bought out supermarket chain Big C Vietnam.
Convenience store chains Neko, Minimart, SeeThai have been booming in Vietnam.
Mentioning market competitiveness of Thai commodities in Vietnam in the future, many Thai entrepreneurs believed it is great because the AFTA has been opening more chances for Thai enterprises.
Suparporn Sookmark, Director of the Thai Department of International Trade Promotion in Ho Chi Minh City, stressed that in investment and development plan of Thai companies from now to 2025, Vietnam is considered as a potential market in the Asian region. Therefore, more than 150 Thai enterprises participated in the last trade event in HCMC despite of Covid-19 spread. For small and medium-sized businesses from Thailand, Vietnam is good market for export.
However, in the other hand, local enterprises fretted about Thai commodities in supermarket shelves in Vietnam. A representative of the city’s Entrepreneur Association in HCMC shared that in the strategy to expand its market share, Thai peers will focus on medium and luxury segments with 10-30 percent higher than Vietnamese-made commodities in price.
Chairwoman of Food and Foodstuff Association Ly Kim Chi said that the increase in foreign commodities in Vietnam will put more pressure on domestic enterprises which are mostly small and medium-sized; therefore, state competent agencies should think of technical barriers to prevent Thai enterprises from dramatically reducing prices of commodities in a drive to dominate the market through lower costs than Vietnamese competitors.
Moreover, state relevant agencies should tighten control of the origin of Thai-imported goods which enjoy tariff exemption to prevent fake commodities from entering Vietnam market and causing loss for local enterprises, said Ms. Chi.
She added last but not least, a retail market development strategy for the domestic market is needed by supporting prestigious retailers such as Saigon Coop, Satra Mart, Vinmart so that these retailers can expand their outlets and scale.
