Vietnam’s exports of garments and textiles, leather and footwear to Eastern Europe remain modest. Eastern European nations offer great potential to exporters given their relatively high GDP growth and less stringent quality requirements compared to Western European countries.
However, to succeed in exporting to these countries, Vietnamese firms must have long-term strategies, improve product quality and study the market carefully to make suitable products.
Participants of a Vietnam-Eastern Europe Trade Forum voiced these views at an event in Ho Chi Minh City on May 8 sponsored by the Ministry of Industry and Trade. In 2018, trade turnover between Vietnam and Eastern Europe reached US$10.1 billion, including more than US$6.5 billion in Vietnam’s exports. In the first quarter of this year, Vietnam’s exports to this market kept growing, with the two main commodity groups of garments and textiles, leather and footwear.
Vietnam’s leather and footwear exports to Eastern Europe reached more than US$376 million in 2018, while garment and textile exports totaled US$265 million. Among the Eastern European countries, Russia is Vietnam’s biggest market.
Representatives of business groups and exporting firms at the forum said they have faced difficulties in exporting to Eastern Europe due to lack of market information. In addition, goods are mainly transported by sea, which takes a long time.
Pham Xuan Hong, chair of the Ho Chi Minh City Association of Garment, Textile, Embroidery, and Knitting (AGTEK), said 20 local companies are involved in exports to Eastern Europe but they have faced difficulties in payment methods and trade barriers.
Phan Thi Thanh Xuan, deputy chair of the Vietnam Leather, Footwear, and Handbag Association, said business culture is the biggest barrier in market access. The association has sent many business delegations to explore the Eastern European market, but local businesses are afraid to change a culture they have established for decades with the US and EU. Vietnamese firms, for their part, often introduce what they have and not what the market needs.
Dmitry Makarov, head of the Ho Chi Minh City office of the Trade Representation of the Russian Federation in Vietnam, said Vietnamese companies must carefully calculate prices so that they are most competitive, while conducting marketing via the internet. In addition, goods must be provided in a broad array of sizes for consumers.
Eastern Europe is a traditional and important market for Vietnam. This market offers both challenges and opportunities for Vietnamese companies, which require them to adopt appropriate market strategies.
- EU – Vietnam Free Trade Agreement: Vietnam’s Competitive Gains
- US -China decoupling will harm both sides, says Chinese premier Li Keqiang
- Trade war, COVID-19 make Vietnam even more attractive to foreign investors: HSBC
- Vietnam and US footwear trade links set for boost in post-COVID-19 period
- EVFTA to help Vietnam develop into a global manufacturing hub