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VietnameseVietnamese companies lack strategy for exports to US exporters have gained a reputation for dumping products in the US market to compete with foreign rivals, but their lack of attention to quality could harm their long-term strategy, said an official from the Ministry of Industry and Trade.

The head of the ministry’s American Market Department, Nguyen Duy Khien, said, “Vietnamese exporters tend to sell their products at low prices to attract buyers, but get themselves into trouble with US anti-dumping lawsuits.”

The statement was made on August 28, at a conference for trade promotion with the US, held in Hanoi. He added that domestic exporters should focus on quality and pay more attention to quality and more environmentally-friendly products if they wish to create sustainable trade with the United States.

Khien said that from 50-60% of Vietnam’s footwear products exported to the US are only half-finished because Vietnamese firms lack design expertise. Most Vietnamese companies receive design models and materials from their US partners, working as subcontractors for firms from Hong Kong, Taiwan or South Korea, instead of being direct contractors for American firms.

The larger Vietnamese apparel firms have the capacity to act as a bridge for small local exporters to help them reduce overhead, he suggested.

Opportunities pose challenges

The US, home to the largest overseas Vietnamese community in the world, with around 1.5 million, is a significant market for Vietnamese goods. The US market is also widely considered to be less demanding than that of Japan or Europe. Vietnam’s entry to the WTO, along with the removal of Permanent Normal Trade Relations (PNTR) and garment and textile export quotas have paved the way to increased exports to the US.

However, Vietnamese exporters still face many challenges for entry of their goods to the US market. Currently China accounts for about 75% of the total footwear imported to the United States. For other apparel, China accounts for 33%, for electronics, 32%, seafood, 18% and plastics, 25%.

China is not Vietnam’s only major competitor, however. Indonesia and Bangladesh are also competing for exports. Another obstacle is that there is only one direct shipping rout linking Vietnam with the US. The long distance adds to high shipping fees, along with other practical problems, such as potential pirating and the Bio-terrorism Act.

Khien suggested that Vietnamese companies set up catalogues and websites in both Vietnamese and English to promote their products. This is something, he said that would help Vietnamese businesses increase the prestige of their brands and introduce them to potential foreign partners.

(by Dtinews)

 

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