Main competitors of German goods in Vietnam
Main competitors of German goods in Vietnam
As Vietnam is one of the most open economies in the ASEAN region and in the world, its market currently has the presence of many competitors from many different countries and regions. However, the most popular and dominant competitors are still from the Asian region, especially East and South Asia including China, Korea, Japan, India, and other ASEAN countries. These are the traditional importers of Vietnam because they have:
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A geographical location closer to Vietnam than other markets such as Germany and other European countries, so the transportation cost is low, making the price more competitive;
-
FTAs in effect for a long time with Vietnam (Table 14), so goods have been eliminated or reduced tariffs compared to countries that have not had FTAs with Vietnam such as Germany before the EVFTA took effect;
-
More affordable products than developed countries like Germany.
Table: Vietnam's FTAs and FTA Partners
|
No |
FTAs |
Time |
Partners |
|
FTAs in effect |
|||
|
1 |
AFTA |
Effective since 1993 |
ASEAN |
|
2 |
ACFTA |
Effective since 2003 |
ASEAN, China |
|
3 |
AKFTA |
Effective since 2007 |
ASEAN, South Korea |
|
4 |
AJCEP |
Effective since 2008 |
ASEAN, Japan |
|
5 |
VJEPA |
Effective since 2009 |
Vietnam, Japan |
|
6 |
AIFTA |
Effective since 2010 |
ASEAN, India |
|
7 |
AANZFTA |
Effective since 2010 |
ASEAN, Australia, New Zealand |
|
8 |
VCFTA |
Effective since 2014 |
Vietnam, Chile |
|
9 |
VKFTA |
Effective since 2015 |
Vietnam, South Korea |
|
10 |
Vietnam – EAEU FTA |
Effective since 2016 |
Vietnam, Russia, Belarus, Armenia, Kazakhstan, Kyrgyzstan |
|
11 |
CPTPP |
Effective since 2019 |
Vietnam, Canada, Mexico, Peru, Chile, New Zealand, Australia, Japan, Singapore, Brunei, Malaysia |
|
12 |
AHKFTA |
Effective since 2019 |
ASEAN, Hong Kong (China) |
|
13 |
EVFTA |
Effective from 01/08/2020 |
Vietnam, EU27 |
|
14 |
UKVFTA |
Effective from 01/05/2021 |
Vietnam, United Kingdom |
|
15 |
RCEP |
Effective from 01/01/2022 |
ASEAN, China, South Korea, Japan, Australia, New Zealand |
|
FTAs in negotiation |
|||
|
16 |
Vietnam – EFTA FTA |
Launch of negotiation from 05/2012 |
Vietnam, EFTA (Switzerland, Norway, Iceland, Liechtenstein) |
|
17 |
Vietnam – Israel FTA |
Launch of negotiation 12/2015 |
Vietnam, Israel |
The table below lists the top 5 largest import markets of Vietnam for each group of key German export products to Vietnam. It can be seen that only German pharmaceutical products enter this top and stand in a relative position (2nd), the rest of German products have not captured the dominant market share in total imports of Vietnam.
Table: The biggest competitors of German goods in Vietnam
|
No |
Products |
Top 5 countries from which Vietnam imported the most |
|
1 |
Chapter 84: Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof |
China, Korea, Japan, Thailand, Taipei (Chinese) |
|
2 |
Chapter 85: Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles |
China, Korea, Taipei (Chinese), Japan, The US |
|
3 |
Chapter 30: Pharmaceutical products |
France, Germany, The US, India, Italy |
|
4 |
Chapter 90: Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof |
Korea, China, Japan, Taipei (Chinese), The US |
|
5 |
Chapter 39: Plastics and articles thereof |
China, Korea, Taipei (Chinese), Japan, Saudi Arabia |
|
6 |
Chapter 38: Miscellaneous chemical products |
China, Korea, Taipei (Chinese), The US, Japan |
|
7 |
Chapter 87: Vehicles other than railway or tramway rolling stock, and parts and accessories thereof |
Thailand, China, Indonesia, Korea, Japan |
|
8 |
Chapter 73: Articles of iron or steel |
China, Korea, Japan, Thailand, Taipei (Chinese) |
|
9 |
Chapter 29: Organic chemicals |
China, Taipei (Chinese), Korea, Thailand, Singapore |
|
10 |
Chapter 32: Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks |
China, Korea, Taipei (Chinese), Japan, India |
Source: ITC Trademap, 2021
However, Vietnamese businesses and consumers tends to move to new import markets in order to:
-
Diversify markets: being too dependent on certain markets will cause enterprises to suffer heavy losses when there is any adverse fluctuation in that market;
-
Diversify goods categories: the expansion of import markets will help businesses diversify products, seek higher quality products at affordable prices to help consumers have more choices;
-
Optimize input costs, increasing productivity: Vietnamese enterprises are looking for new import markets with abundant material sources, high technology, modern machinery and equipment to optimize input costs and increase productivity;
-
Satisfy the increasing demand for high-quality goods: Vietnamese consumers’ living standards are improving, especially in urban populations, so there is an increasing demand for high quality products, good designs, and world famous brands.
With this trend, Vietnam's new FTA partners with modern technology and high-quality goods such as Germany and other EU countries will have great opportunities to increase market share in Vietnam in the future.
Source: "Business Handbook: Exploiting the EVFTA to import and export goods between Vietnam and Germany" - Center for WTO and International Trade
