How to gain a market share in the US$ 22 billion Vietnamese agri-food important market?
In the past thirty years the Vietnamese economy has been growing rapidly. While the Dutch GDP was almost 50 times larger than Vietnamese GDP in 1990, this figure dropped to 3.5 times by 2019. With such a fast-growing economy it is no surprise, that the 100 million Vietnamese also increased their imports enormously. From just US$ 16 billion in 2001 to US$ 253 billion in 2019. Out of these imports, about US$ 22 billion were food related.
The Netherlands, who prides itself to be the 2nd largest agriculture exporter in the world, has seen its food related exports to Vietnam increase slowly. With a value of just below US$ 170 mln in 2019, the Netherlands only has a 1% market share of the Vietnamese food and food ingredient import market.
The Free Trade Agreement (FTA) between the EU and Vietnam, which came into action in 2020, provides the perfect opportunity for Dutch companies to increase this market share, and to develop their exports to Vietnam. For a large range of food items, ranging from onions to cheese, import duties will be eliminated. In fact, 99% of all import tariffs for EU countries will be removed. According, this should result in €15 billion a year in additional exports from Vietnam to the EU by 2035, while EU exports to Vietnam would expand by €8.3 billion annually.
To support Dutch SME’s to develop its exports to the Vietnamese market, the Dutch Embassy in Vietnam, wanted to have more insights in the Vietnamese import market for food and food ingredients. For this reason, the Embassy asked Vietnam based consulting and R&D farm Fresh Studio, to carry out a study into the Vietnamese food import market. This study analysed all data trends in Vietnamese food imports, interviewed key informants in the food import, wholesale and retail sector in Vietnam, as well as Dutch companies in different phases of their Vietnam market entry.
As Dutch companies are often already very export oriented, they have many different market opportunities between which they can choose. Markets like China, India or more developed Southeast Asian markets like Malaysia or Indonesia, often get more attention and resources allocated. Few Dutch entrepreneurs realize how large the Vietnamese market already is.
For example, the Vietnamese import market for onions and shallots had a value of US$ 300 million in 2019, of which 97% was supplied by China. While the Netherlands exports large volumes of onions to other Southeast Asian countries like Malaysia, the Philippines and Indonesia, hardly any Dutch onions are exported to Vietnam. With the lowering of the import duties on Dutch onions from 15% in 2019 to 0% in 2025, the Dutch onion sector should be able to build a significant market share in the Vietnamese import market for onions.
These kinds of opportunities are present for many more different products. If you want to find out if the Vietnamese food market is interesting for your company, please join the seminar which will be organized on the 22nd of June by Export Partner from 10-11 am, through the following link : https://teams.microsoft.com/_#/pre-join-calling/19:meeting_ODlhNWJmZDYtZmJjYy00YTAxLWEyMWEtZTc3YWQ3YjBkNTMz@thread.v2 . During this event, the Dutch agricultural counsellor Willem Schoustra will introduce the development of the Dutch-Vietnamese trade relations, Fresh Studio will present the results of the study and a panel with Dutch companies will share their experiences in exporting to Vietnam.
Participants who registered for the seminar will receive a copy of the presentations after the workshop. For those who are interested in the full study report, they can Guido Jacobs via guido@exportpartner.com , to receive a copy after the 22nd of June .
For further enquiries on Vietnamese agri-food market, please contact the Embassy at han-lnv@minbuza.nl .