Vietnam is one of the most dynamic economies in Asia, with a large market for capital goods and a growing domestic market for consumer goods. With a vast market of over 95 million people and its fast GDP growth of 6.7 per cent in 2015, exceeding world’s average, Vietnam remains an enticing destination for UK exporters.
According to a PricewaterhouseCoopers report Vietnam holds the potential to grow up to 10 per cent per annum, becoming the fastest-growing emerging economy by 2025, where the scale of its economy is estimated to reach 70 per cent of the size of the UK economy by 2050. The increasing prosperity of the Vietnamese economy not only shows the steady progress made in recent years but also presents the prospect of an exciting future.
Vietnam is situated in an extremely strategic position for international trade. Its proximity to the Asia-Pacific area means that it acts as a gateway to the inland economies of Cambodia and Laos, whilst it also opens out to the strong economies by the South China Sea such as the Philippines, Indonesia and Malaysia.
As a member of the Association of Southeast Asian Nations (ASEAN) and the World Trade Organization, Vietnam benefits from international cooperation and has free trade agreements with India, China, Japan, South Korea, Australia and New Zealand. The lower tariffs due to market liberalization under ASEAN and other specific bilateral agreements combine with the young population with an average age of 27 to offer further opportunities.
Increasing numbers of UK companies are following well-established brands like Standard Chartered, HSBC, Karen Millen and Oasis into the market. Rolls Royce, Mini and Marks & Spencer established a presence in 2014.
The Vietnamese food and beverage sector currently accounts for 37 per cent of its GDP and is one of the rising stars in the market. The strong economic growth and the development of a financially well-off consumer group has directed a change in consumption habits and led to the emergence of retail systems.
There are currently 750 supermarkets, 130 shopping centres and 9,000 traditional markets in the country. In addition, the annual production of beer, wine and spirits, and non-alcoholic drinks will rise to 4.25 billion litres, 360 million litres, and 9.2 billion litres in 2020.
Vietnamese consumers are shifting towards consumption of beverages with higher value, creating gaps to exploit the high-end beverage segments. Though both local and foreign players have attempted to respond to this shift, overseas companies currently enjoy the edge as Vietnamese consumers favour international brands.
As Vietnam ranks fourth most popular destination in Asia with over 10,013,000 visitors in 2016, the increasing tourism contributes towards the demand for western-style products such as beef, cheese, seafood, wine and seasonings.
The Enterprise Europe Network desk at LCCI in collaboration with the EU-Vietnam Business Network (EVBN), has organised a company trade mission to Vietnam scheduled to take place in January 2018.
The company trade mission to Hanoi and Ho Chi Minh City will encourage UK companies wishing to enter the Vietnamese market to interact with local companies, as well as existing European companies operating in the market.
The introduction and referral to EVBN will help participants attain a more personalised experience, following their individual business plans.
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Mia Ensenyat is studying at the University of Bath and is carrying out an internship in the Enterprise Europe Network section of the LCCI’s International Business team.