ASEAN Economic Community offers opportunities for Vietnamese enterprises
With a market of more than 600 million people, GDP expected to reach US$4.7 trillion by 2020, and potentially becoming the world's fourth largest economy by 2030, the ASEAN Economic Community is offering opportunities for ASEAN businesses, including those from Vietnam.
Two years after the establishment of the AEC, Vietnamese businesses are doing their best to find a way to gain market share in ASEAN markets.
Vietnamese businesses have become more aware now of integration opportunities and challenges brought by the AEC than community.
A survey conducted by the Vietnam Chamber of Commerce and Industry late last year, 1 year after the founding of the AEC, indicated that 47% of domestic enterprises have taken the initiative in finding information about the AEC. But to make full use of AEC’s advantages is not easy.
The Vietnam Safe Agricultural Product Export Company is active in several European markets but has only enquired about the ASEAN market.
The company’s director Nguyen Van Tuan said the company wants to make thorough preparations for integration.
“We are studying the policies, mechanisms, and consumption patterns in the ASEAN markets. We need fact finding tours of their supermarkets to know what the locals prefer and whether or not our products can compete. I have visited ASEAN countries but only as a tourist. We are ready to join market study tours,” said Mr Tuan.
Nguyen Khac Son, Chairman of the Board of Directors and CEO of the Son An Group, said “The AEC provides businesses both challenges and opportunities. If enterprises know how to take advantage of the AEC, they will get much benefit. If they haven’t made careful preparations, they will face many difficulties.
Businesses of ASEAN members produce similar products, so Vietnamese enterprises must create something that differentiates them from their competitors. It would better for our companies to turn out products that are unique in the ASEAN market.”
Thanks to wise management, Son An Group's products have secured a foothold in the ASEAN market. Sticky rice-fermented wine, deer velvet wine, and supplementary made from deer velvet earned the company more than US$3 million in exports to ASEAN last year, doubling the previous year. Son An hopes to reach US$15 or US$20 million in the next five years.
“We are continuing to research the market and develop profitable products geared to the market of each country. We have introduced strategic products matching the tastes of people in ASEAN and improved the skills of our staff, particularly in foreign languages so they can communicate with our ASEAN partners,” said Son.
VNTech, a company specializing in trading electronics and electrical appliances, has focused on new technologies to produce high quality products at competitive prices.
Le Khac Hoa, VNTech’s General Director said, “VNTech's products are as good as items from Malaysia and Thailand but cost 20% less. This is an integration advantage for VNTech. Our sales last year reached nearly 1 billion USD.”
Coming late with less experience than the larger economies in ASEAN creates a difficult challenge for Vietnamese enterprises.
Deputy Foreign Minister Nguyen Quoc Dung, head of the Senior Officials' Meeting (SOM) ASEAN Vietnam, said at a recent seminar in Hanoi on the ASEAN Economic Community and opportunities for Vietnamese enterprises” that:
“We find that Vietnamese enterprises now are more aware of opportunities and challenges brought by the AEC and that business support from the government, ministries, and agencies has improved. Domestic enterprises now know who they should contact.”
ASEAN is Vietnam's second largest trading partner, with an annual growth rate of 15%, and the third largest exporter to Vietnam.