Metropolitan companies' exports to Vietnam increased 2.5 times
2021-01-11 05:07

Metropolitan companies' exports to Vietnam increased 2.5 times

The past year pleasantly surprised analysts with a sharp surge in exports of non-energy raw materials, which the capital's enterprises transported to Vietnam. So, for the first 9 months of 2020, its monetary equivalent was about 57 million U.S. dollars - almost 2.5 times more than it was last year. This was reported by Vladimir Yefimov, the deputy mayor of the capital Sergey Sobyanin on economic policy and property and land relations. According to the report, which presented the official, the volume of non-energy exports of Moscow to Vietnam amounted to $ 57.21 million, or 8.5% of total non-resource exports, Russia made in the first 9 months of last year. The figure is 143.7 percent higher than last year's percentage (in 2019 it was only $23.48 million). According to Efimov, such a sharp jump occurred due to the fact that Moscow has established with Vietnam the supply of new groups of goods that were not exported before. For instance polypropylene.

The list of goods exported to the republic also included:

- Food products made with the addition of flour or dairy raw materials. Their sale abroad brought $7.6 million (an increase of 13.7% compared to the previous year);

- mechanical equipment, computers and other technical devices. For these, foreigners paid us $3.72 million (an increase of 292.1% compared to 2019);

- pharmaceuticals (prepackaged). They were sold for $3.03 million (141.9% more than last year).

Promising directions of the capital's exports

Alexander Prokhorov, head of Moscow's Investment and Industry Department, said the Vietnamese market is a very promising direction for domestic exports, especially from the perspective of the capital's manufacturers.

According to the official, the most demanded by the Vietnamese are goods, focused on the specific needs of the population. In support of his words, the expert told about the expenditure patterns of the state's citizens in 2019. Thus, Vietnamese residents spent:

- on food - 33.9% of disposable income;

- for educational purposes - 7.2%;

- for the purchase of household appliances - 7.1%;

- on the purchase of goods and services in the field of communications - 6.6%.

According to experts of Mosprom (Moscow Center for Export Support and Development), the consumer market of Vietnam is one of the most dynamic and actively developing among all the states of the Asia-Pacific region. According to a study conducted by the center's experts, since 2015, the volume of Vietnamese consumer spending each year has increased by about 8%. By comparison, the dynamics of the same ratio among other states in the region is only 4.7%. In addition, there is an impressive purchasing power of Vietnamese citizens: in 2019, it was more than 8,000 dollars per capita.

Mosprom attributes this state of affairs to the following reasons:

- The majority of the population (69.2%) of Vietnam belong to the category of able-bodied citizens. That is why the unemployment rate in the Republic is one of the lowest in the region - about 2%;

- Vietnamese authorities are actively developing large cities and financial centers. This has a favorable effect on the standard of living of the population and contributes to the strengthening of all sectors of the economy.

Mosprom experts believe that over the next five years, the Vietnamese market will only gain momentum. They estimate that in 2021 the total demand of the Vietnamese people for food will be about 85.71 billion dollars, and by 2025 it will reach the mark of 125.28 billion dollars, i.e. increase by more than one and a half times.

And what about the agro-industrial complex?

The same experts of Mosprom revealed that agricultural producers in Vietnam often face difficulties in the process of developing the necessary infrastructure. This is why farmers have a demand for imported seeds, machinery and agricultural equipment.

Also, Vietnamese meat consumption is increasing year by year. The Republic is amongst the top 10 countries in terms of consumption of this product. So Moscow suppliers have an excellent chance to take a worthy place in the meat products market of Vietnam before someone else occupies this niche. In addition, there is a growing demand for:

- sour-milk products;

- beverages (alcoholic and non alcoholic);

- Chocolate and confectionery products based on it;

- baked goods.

Industrial products and services

The rapid growth of the Vietnamese population necessitates the modernization of almost all spheres of national life, including the industrial complex. One of the key tasks is to ensure citizens' access to clean water and control its use. Specialized companies of the capital can help the Vietnamese to solve this vital issue. For example, Vietnamese partners can negotiate with Moscovites on technology and product exports for design of water supply systems, reuse of water resources in industrial areas, etc.

Metropolitan companies can also become promising partners for Vietnam in the mining industry. By concluding contracts, the republic's authorities will be able to minimize costs in this area and increase the environmental friendliness of local industries.

Shaping the supply strategy

It is no secret that when a company enters a new sales market, it is important to understand how the market works, i.e:

- to know the legislation of the other state;

- to be aware of the needs of the population;

- to be aware of the issues of licensing, certification, and logistics.

The first difficulty faced by a supplier aiming to export is the lack of experience in this field. By the time an entrepreneur finally understands the intricacies of international trade, he will have spent a huge amount of money and time. Mosprom can help to overcome this difficult stage. The center's experts practice an individual approach to each client, which allows companies to adapt rather quickly and painlessly in the foreign economic space.