Advantages

Japan is the main export market for many of Vietnam's key export products such as machinery, electrical/mechanical equipment, textiles, footwear, wood products, plastics, toys, vehicles of all kinds, etc. Of which, many products (such as mechanical equipment, vehicles of all kinds, plastic products, etc.) currently account for a small market share in Japan's total imports, while Vietnam's exports of these items to Japan have tended to increase significantly in recent years. This fact shows that the room and potential for exporting Vietnamese goods to Japan is still very large.

In the coming time, Vietnam's exports to Japan are forecast to continue to grow thanks to favorable factors such as:

• Under the impact of the COVID-19 pandemic, the Japanese economy has also been affected by the general trend of the world, leading to a decrease in the income of most consumers. Therefore, their demand for more affordable products from developing countries like Vietnam is increasing, especially essential goods such as food, clothing, etc. Meanwhile, Vietnam has the strength to produce these products at prices that are often lower than developed countries, and at the same time has the advantage of preferential tariffs from 04 common FTAs ​​with Japan.
• The Vietnamese community in Japan is growing with the number of Vietnamese studying and working in this country increasing in recent years. According to statistics from the Immigration Department - Ministry of Justice of Japan, the total number of Vietnamese people residing in Japan as of December 2023 has reached 565,026 people (an increase of 56% compared to the number of 362,405 in 2017), the second largest foreign community in Japan (after the Chinese). The Asian community has the same tendency to consume similar products as the Vietnamese, which is also growing strongly in Japan. Therefore, the demand for consumption and use of Vietnamese products in Japan has also increased accordingly.
• Although the trend of using domestic products is still very strong, Japanese consumers are gradually becoming more open to using imported products (including Vietnamese products), especially niche products or products that meet the tastes and specific concerns of Japanese people (for example, products for the elderly, products that emphasize quality, hygiene, friendly functions, etc.).
• Vietnamese products are of increasingly high quality and are gradually conquering demanding markets, including Japan. Many large Vietnamese enterprises have made systematic and long-term investments in the production and export of high-standard goods to developed countries - markets with strict requirements on product quality and design. In addition, Vietnam is also focusing on attracting high-tech investment in industries with great potential but outdated technology such as vegetables, fruits, seafood, etc. to improve the quality of export products. - Japan has a relatively large import demand for product groups in which Vietnam has strengths such as clothing, seafood, wood products, etc. This is a very favorable factor for Vietnam to promote the export of these items to the Japanese market in the future.

Disadvantages

Besides the advantages, Vietnamese goods exported to Japan also face certain difficulties:

• Japan is a famous market with many import regulations (technical barriers (TBT), food safety and animal and plant quarantine (SPS), etc.) that are the most stringent in the world. A type of goods imported and consumed in the Japanese market may have to comply with many different legal regulations at the same time (for example, see the table below). Meanwhile, some Vietnamese products have unstable quality, making it difficult to meet these regulations.

• Japanese consumers have high and relatively specific requirements from the appearance to the quality of the product. Meanwhile, many Vietnamese products do not ensure stability and consistency in quality and are often limited in form, design, variety, and do not pay attention to building product image and brand, etc.
• The level of competition in the Japanese market is very high, especially with major competitors in the same region such as China, Korea, and some ASEAN countries. These countries have a structure of goods exported to Japan, transportation distance, etc. quite similar to Vietnam, and are all members of RCEP and some have other FTAs ​​with Japan, so the competitive pressure is very high. Moreover, even in areas with strong products, Vietnamese goods do not necessarily have advantages in quality, diversity and brand compared to these competitors.

Source: Center for WTO and International Trade

• Market size of Japan
• Trade activities of Japan
• Consumer characteristics in Japan
• Characteristics of Japan’s distribution system
• Vietnam's exports to Japan