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Overseas Businesses Seek Vietnam Distributors as Market Appeal Soars

Buoyed by both a surge in the size and affluence of the country's high-spending middle class and a number of lucrative government incentives and concessions, Vietnam has become a key target for many expansion-hungry overseas firms.

Photo: Prime Vietnamese exports: Health foods and local herbs.
Prime Vietnamese exports: Health foods and local herbs.
Photo: Prime Vietnamese exports: Health foods and local herbs.
Prime Vietnamese exports: Health foods and local herbs.

Attendance was notably up at the most recent Vietnam International Trade Fair (Vietnam Expo), a testament to both the increasing affluence of the country’s growing middle class and the government’s success in fostering bilateral trade. Perhaps unsurprisingly, then, the majority of overseas exhibitors were in Ho Chi Minh City (HCMC) on a mission to find local distributors.

With the expo conceived as a platform for businesses to meet, match and discuss possible trade and investment deals, it proved to be fertile ground for those companies looking for local partners. Indeed, many had travelled a considerable distance to secure just such a relationship, with the event attracting companies from as far afield as China, India, Indonesia, Japan, Kenya, Nepal, the Netherlands, Switzerland and Taiwan. There was also a diverse range of business sectors on show, including textiles and garments, paper, consumer goods, handicraft products, glass items, food and beverages and even specialists in interior décor.

One company from a relatively close neighbour was Sinwolfood, a Jecheon City-based manufacturer of soybean paste and a number of other traditional Korean food products. Explaining just why he had taken the 7,000km round trip to HCMC, Yoo Sun Ja, the company’s Sales Manager, said: "Vietnam is very much a new market for us and we are keen to find buyers and distributors here.

"Our soybean paste is very popular in Korea, but has yet to catch on in Vietnam. We want to test the market here, and we are confident that Korean food will prove popular with local diners."

As with Yoo, many of the exhibitors were newcomers to Vietnam, all looking to either test the market or secure a local partnership deal. Highlighting the role the event can play in meeting both these needs, Ho Thi Kim Thoa, the Vietnamese Deputy Minister for Industry and Trade, said: "This expo serves as a bridge. It allows Vietnamese and overseas companies to meet, co-operate and jointly drive trade and investment."

One company on a mission to do just that was Horizon (Tianjin) Industrial, a Chinese designer, manufacturer and exporter of handmade tabletop glassware, glass houseware and home-décor products. Echoing the words of many other exhibitors, Stone Shi, the Founder of the business, said: "While we already have distributors and customers in Europe and the US, we are keen to expand and find distribution partners here too."

As well as welcoming overseas exhibitors, the event also hosted a dedicated showcase for small businesses and craft shops, an initiative sponsored by the Hanoi Department of Industry and Trade under its remit to promote artisanal skills. One of the beneficiaries of this policy was Angkasa Pura, a manufacturer of traditional Indonesian handmade Sasirangan cloth. Although still relatively small, the business – launched in 1998 in Indonesia’s South Kalimantan province – is already keen to expand internationally.

Setting out his store more explicitly, Amay Sasirangan, Founder of the business, said: "Our cloth is already popular in Indonesia and Malaysia and we hope to find similar success here."

Photo: Horizon’s range of tabletop glassware.
Horizon's range of tabletop glassware.
Photo: Horizon’s range of tabletop glassware.
Horizon's range of tabletop glassware.
Photo: Than Hien’s wooden sculptures.
Than Hien's wooden sculptures.
Photo: Than Hien’s wooden sculptures.
Than Hien's wooden sculptures.

Another small business making its debut at the event was Tibet House Nepal, a producer of authentic classic and modern thankas – traditional Tibetan Buddhist paintings. While acknowledging that such paintings have yet to find a market in Vietnam, Suman Shrestha, a Senior Manager with the company, had hoped attending the expo would help to change that.

Clearly not impressed with the response to date, though, he said: "We have been in business since 1998 and believe the time is right for us to look to export. While we had hoped to find buyers in Vietnam, so far our stand has attracted very little interest."

More upbeat, however, was Cody Kim, Chief Overseas Sales Manager for Chamos Cosmetics, a South Korean manufacturer of natural skincare products. With Korean movies and TV shows now hugely popular in Vietnam, Kim sees every reason for the country’s cosmetics products to be equally well received.

He said: "As there are now a growing number of Vietnamese people who love our TV and movie stars, we want to offer them the same all-natural skincare products that are popular in Korea. I am expecting sales to take off here just as soon as we have a distributor in place."

While the expo saw a surfeit of overseas companies looking to introduce their wares to the Vietnamese market, there was also a substantial number of local manufacturers hoping to boost their export figures. According to Dofrance Duc, the co-owner of May Cou Cou, a manufacturer of handmade woollen crocheted dolls, the expo was the perfect place for small Vietnamese businesses to find overseas buyers and investors.

He said: "While we already have a huge market in Vietnam, exporting is our ultimate goal. We hope that 2017 will be the year our overseas sales take off and we are looking to the government to help us through the provision of factory facilities and tax incentives."

One sector with high hopes for its export prospects was Vietnam’s vibrant natural health products industry. Championing the sector at the show was the Food and Nutrition Research Center (FNC) Vietnam, which specialises in the production of Linh Dan purple black garlic, a traditional herbal tonic. While the company manufactures a wide range of other herbal treatments, Linh Dan has emerged as its signature product.

Outlining the company’s forward strategy, Chu Van Hoan, a Senior Salesman with the business, said: "With the health benefits of Linh Dan already well known across Vietnam, we believe it could prove equally successful in other countries. While there are other similar products out there, we believe that none of them matches ours in terms of taste and efficacy."

Slightly ahead of its rivals in the export stakes was Than Hien, a manufacturer of handcrafted high-grade wood sculptures. Renowned for the unique nature and intricacy of its designs, the company claims to be one of the largest businesses of its kind in Vietnam.

With regard to its future prospects, Dao Dut Khoat, a Director of the business, said: "We can create products to meet the different requirements and budgets of a wide range of customers. We now hope to offer the same service to foreign buyers and distributors."

Photo: The Vietnam International Trade Fair: Local distributors and overseas opportunities a’plenty.
The Vietnam International Trade Fair: Local distributors and overseas opportunities a'plenty.
Photo: The Vietnam International Trade Fair: Local distributors and overseas opportunities a’plenty.
The Vietnam International Trade Fair: Local distributors and overseas opportunities a'plenty.

The 2016 Vietnam International Trade Fair (Vietnam Expo) took place at the Saigon Exhibition and Convention Center in Ho Chi Minh City from 30 November to 3 December 2016.

Geoff de Freitas, Special Correspondent, Ho Chi Minh City

Content provided by Picture: HKTDC Research
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