General

Vietnam, with a huge population dividend, has taken off rapidly in recent years, driving huge domestic demand, and its geographical location has made it the first stop to enter the ASEAN market. In view of this, Vietnam has become a very important overseas market for Chinese enterprises.

1、 Potential of Vietnam market

Vietnam has a land area of 330000 square kilometers, a population of nearly 100 million, a labor force accounting for 74% of the population, and an urbanization rate of 37%. It has huge market potential. The political situation is stable, both socialist countries, and the national administrative system is closest to China. In recent years, the economy has developed rapidly, with a GDP growth of 2.58% in 2021. In 2022, Vietnam's GDP exceeded 400 billion US dollars for the first time, setting the fastest growth rate in nearly a decade.

Vietnam's opportunities lie more in free trade agreements.

So far, Vietnam has acceded to or signed the Regional Comprehensive Economic Partnership Agreement (RCEP), the Trans-Pacific Partnership Comprehensive and Progressive Agreement (CPTPP), the Vietnam EU Free Trade Agreement, the Vietnam UK Free Trade Agreement, the Vietnam Chile Free Trade Agreement, and the Vietnam Eurasian Economic Union Free Trade Agreement, all of which have a very positive role in promoting Vietnam's exports.

According to statistics, in 2022, Vietnam's exports to the parties to the Comprehensive and Progressive Agreement on the Trans-Pacific Partnership increased by more than 30% year-on-year, and its exports to the four Central American countries (Canada, Mexico, Peru, and Chile) showed a surge momentum. In particular, the export of textile and clothing products to Canada increased by more than 50% year-on-year.

The Free Trade Agreement between Vietnam and the United Kingdom has boosted the bilateral trade volume between Vietnam and the United Kingdom by a double-digit surge. Vietnam's advantageous exports to the United Kingdom have achieved good growth, with high total foreign exchange earnings, such as coffee, pepper, rubber, fruits and vegetables, textile and clothing products, and shoes. Some commercial products have increased by nearly 100%.

With the implementation of the "the Belt and Road", "Two Corridors and One Circle" and other strategies, China and Vietnam have closer economic ties.

China has been Vietnam's largest trading partner, largest import market, and second largest export market for many consecutive years. Vietnam is also China's largest trading partner in ASEAN.

It is worth noting that, in addition to concluding a free trade agreement with the European Union, as an ASEAN member country, Vietnam has also fully enjoyed the huge dividends of the implementation and effectiveness of the RCEP. Vietnam's agricultural and seafood products, which had competitive advantages, have been able to enter a broader market at low or even zero cost, while a larger amount of foreign capital, especially Asian international capital, has poured into Vietnam, In the composition of FDI (foreign direct investment) entering Vietnam in 2022, Singapore, South Korea, Japan, and China ranked among the top four, directly enriching Vietnam's foreign trade corpus.

2、 Commodities in the Vietnamese market

According to customs data, in 2022, the bilateral trade between China and Vietnam set a new historical record, with the trade volume between China and Vietnam reaching 234.92 billion US dollars, a year-on-year increase of 2.1%. According to customs data, China exported 146.96 billion US dollars to Vietnam, a year-on-year increase of 6.8%, while China imported 87.96 billion US dollars from Vietnam, a year-on-year decrease of 4.7%.

From the perspective of bilateral trade structure, in 2022, China's export commodities to Vietnam mainly include mechanical and electrical equipment, textile raw materials and textile products, base metals and products, chemical industry and related products, and plastic products. Among them, the export of mechanical and electrical products to Vietnam reached 64.103 billion US dollars, an increase of 4.5% year-on-year.

From the perspective of imports, electromechanical and audiovisual equipment are also the largest category of goods imported by China from Vietnam. According to customs data, in 2022, China imported 60.55 billion US dollars of electromechanical products from Vietnam, a year-on-year increase of 0.9%, accounting for 68.8% of China's imports from Vietnam.

According to the analysis of Huacheng Chuangzhi Customs data, the transaction trend of China's exports to Vietnam in 2022 was relatively stable every month, with no significant difference between off season and peak season.

In 2022, China's exports to Vietnam involved over 6200 8-bit coded products, including electromechanical, audio-visual equipment, and spare parts. China's exports to Vietnam amounted to over 64 billion US dollars.

Taking the 85 categories of customs codes as an example, the export of products such as integrated circuit motors is particularly outstanding, with a total export value of over 46 billion US dollars.

Take the 3926 category of customs codes as an example: plastic products, with the most frequent and active trade.

Therefore, Xiaozhijun has seen in the Vietnamese market that Chinese consumer brands that have been relatively successfully implanted in the local market include: Midea, Haier, TCL, VIVO, OPPO, Xiaomi, and other industrial brands such as JASIC welding machines, Dongcheng electric tools, etc. Nowadays, more and more Chinese brands have successfully replicated Vietnam as their first stop and testing ground for the brand to go to sea, such as Mingchuangyoupin, and Mixue Ice City, among others.

3、 Business situation in Vietnam market

First, it's language. The official language of Vietnam is Vietnamese. In addition, French is also very popular, and Vietnamese businessmen generally have poor English.

The response is to communicate in Chinese. There are many Chinese in Vietnam, especially in the border market between China and Vietnam, where many Chinese or ethnic Chinese are doing business. Therefore, in these places, the RMB can be directly circulated and communicated in Chinese.

Employment of domestic Vietnamese speaking translators. The Vietnamese and the Jing ethnic group in China are the same ethnic group. The Jing ethnic group in China is mainly distributed in Guangxi, along the border with Vietnam. About 10000 people speak Vietnamese in the coastal Jingzu inhabited areas of Fangcheng County, Guangxi. Therefore, it is possible to employ compatriots of the Jing ethnic group as interpreters to deal with Vietnamese, and one's own people will always be more reliable.

Secondly, it's people. To do business in Vietnam, make more emotional investments with your partners, that is, make more contact with decision makers to establish relationships and smooth relationships. Business dealings in Vietnam place a strong emphasis on personal friendship. For Vietnamese, being "one's own" or being considered "one's own" has absolute benefits, and can even be said to be the key to success or failure. Vietnamese usually don't talk about business with people they don't know. They often associate with the same group of people. The business circle is very narrow, and everyone knows each other well, many of them are relatives by blood or by marriage.

In addition, it is necessary to actively develop relations with relevant local departments. Government officials have a high degree of integrity, and the promised policies and benefits can be well realized. Due to the fact that the government has the power to control most commercial transactions within the territory, the popularity of the government is particularly advantageous. In addition to the ever-changing and rapidly changing laws and regulations in Vietnam, the authority of government employees is often much greater than their positions give them, and even some government officials engage in business on their own. In Vietnam, under the table transactions are relatively frequent, and the commission culture is relatively popular. "Benefit fees" are somewhat popular.

Vietnamese people pay great attention to etiquette. Whether it's government departments that have important relationships with your company, partners, or distributors, you need to treat them as friends and be sure to walk around during festivals.

Finally, it is important to understand how to use. In addition to actively developing customers using the customs data of Huacheng Chuangzhi Foreign Trade Software, we also learn to use professional platforms to help you achieve your goals.