|Delegates visit a booth at Vietnam Product Week in Thailand – Udon Thani 2021. Photo: VNA
Continuous trade deficit
Thailand is one of the partners with a large import-export turnover, with a total trade value that is always among the 10 countries with the largest trade relations with Vietnam. Ms. Nguyen Thi Thu Thuy, Deputy Director of the Export Support Center, Trade Promotion Department (Ministry of Industry and Trade) commented: “With its close geographical position and being a member of a number of trade agreements, Vietnam has many favorable conditions for exporting to Thailand.”
Although a powerhouse in exporting agricultural products in the world, Thailand also has a great demand for importing fresh fruits and vegetables. This is an opportunity for Vietnamese agricultural product exporters to explore this potential market worth billions of dollars. Currently, products such as seafood, vegetables, cashew nuts, coffee, and pepper, as well as many fresh fruit products of Vietnam, are being favored by Thai consumers.
Analyzing specific data, Mr. Nguyen Thanh Huy, Trade Attaché, in charge of the Vietnam Trade Office in Thailand, said that in 2021, the total bilateral import-export turnover will reach US$18.72 billion. In which, exports reached $6.16 billion, up 25.3%; Imports reached $12.56 billion, up 14.6%. In the first five months of 2022, the total bilateral import-export turnover reached $8.61 billion, up 8% over the same period last year. In which, exports reached $2.91 billion, up 14.4%; Imports reached $5.68 billion, up 4.7%. The target is that the total import-export turnover between Vietnam and Thailand will reach $25 billion by 2025.
“Vietnam’s key export items to Thailand include; phones and components; machinery, equipment, tools and spare parts; crude oil; means of transport and spare parts; computers, electronic products and components; steels; seafood; and chemical products”, said Mr. Nguyen Thanh Huy.
From a local perspective, Mr. Nguyen Huu Hanh, Deputy Director of Danang Department of Industry and Trade, said that the city currently has about 100 import-export enterprises with stable operations in the area. In 2021, the city will export $1.8 billion worth of goods to 120 countries and territories. Thailand is a potential market of Da Nang City. Da Nang – Thailand export turnover in 2021 will reach about $4 million; meanwhile, import is about $40 million. In the first 6 months of 2022, this figure is $3 million and $22 million respectively.
“Two-way trade turnover between Da Nang City and Thailand has increased year by year but has not been commensurate with its potential and advantages. Besides a number of large enterprises of the city that regularly trade, import and export with Thailand, now some other enterprises in Da Nang also have a need to connect with Thai enterprises and enterprises in Southeast Asian countries, Mr. Nguyen Huu Hanh said.
Prioritize quality products, reasonable prices
Commenting that Thailand is a potential export market for Vietnamese enterprises, Ms. Nguyen Thi Thu Hien, Director of External Relations for the Central and Southern regions of Central Retail Vietnam, said that Vietnamese goods also face many challenges in terms of quality, price, design, and connection methods, to be able to compete with other countries in the same region.
Under the impact of the Covid-19 pandemic, consumption trends in Thailand also have changed, as online shopping has grown. Furthermore, prioritizing the selection of quality products with reasonable prices, technology must be applied to enhance and optimize costs and manage supply chains.
“Healthy products, showing concern for the environment and local products are trending and growing across all customer segments” Ms. Hien said.
Mr. Nguyen Thanh Huy further said Thailand is an agricultural country, so Vietnamese exports to Vietnam must be competitive due to product similarities. Thai consumers prefer processed products, packaged in many sizes. Food is also the target segment of Vietnamese enterprises, but there is fierce competition among exporters.
“If Vietnamese enterprises do not have a market strategy and specific products, it will be very difficult to compete. Along with that, the identity of food brands in particular and Vietnamese goods in general is also a factor that needs attention to build,” Huy said.
Commercial attaché, in charge of the Vietnam Trade Office in Thailand, said that enterprises wishing to export to Thailand also need to pay attention to the factors of taste and color, prioritizing healthy products such as low sugar, low-fat and special attention to the trend of using e-commerce in shopping of Thai consumers. Particularly from a distribution perspective, distribution channels in Thailand are quite diverse, including: traditional markets, convenience stores, supermarkets and hypermarkets. Each channel has its own characteristics in terms of price, packaging, and businesses need to learn carefully.
In addition to meeting consumer tastes, when exporting to Thailand, domestic enterprises are also recommended to meet technical standards, apply for import certificates from authorities, and apply advanced technology in processing and preserving products to ensure quality maintenance during transportation.