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V
IETNAM
B
RIEFING
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December 2014
An Introduction to Vietnam’s Export & Import Industries
Textiles and Garments
Textiles consistently rank amongVietnam’s leading export industries,
employing upwards of 1.3 million workers in directly related jobs
andmore than twomillion with auxiliary work included. The growth
of the garment industry has been impressive. AmCham states that
Vietnamese garment exports rose by 14.85 percent in October
alone. China is the only nation that surpasses Vietnam in terms of net
garment exports to the U.S.. However, manufacturers and investors
are pivoting towards Vietnam; the conditions for setting up shop are
economical and more convenient than doing so in China.
Within ASEAN, Vietnam is the strongest competitor for inheriting
low value-added textiles and apparel manufacturing from China. In
contrast to other leading textile exporters in the region (Indonesia,
Thailand, Malaysia), the share of Vietnam’s textile exports against its
total exports has grown in recent years.
In terms of revenue, footwear is Vietnam’s third most productive
export industry, generating US$8.5 billion in 2013. The country
produces 800 million pairs of shoes per year.
Electronics
Vietnam has emerged as an important electronics exporter, with
electrical and electronic products overtaking coffee, textiles, and
rice to become the country’s top export item. Samsung is Vietnam’s
largest exporter and has helped the country achieve a trade surplus
for the first time in many years. Exports of smartphones and
computer parts now account for more in export earnings than oil
and garments. Samsung is attempting to turn Vietnam into a global
manufacturing base for its products and has invested over US$10
billion into the country.
Samsung has also agreed to cooperate with the Vietnamese
government in order to help develop the country’s domestic support
industries. This represents a key business opportunity for foreign
technology companies to set up operations inVietnamand sell their
components to companies like Samsung.
On July 29, 2014, Intel announced that it had produced its first made-
in-VietnamCPU. By the end of this year, Intel expects tomanufacture
80 percent of their CPUs for the world market in Vietnam.
Pharmaceuticals
The future looks to be very interesting for the pharmaceutical
industry in Vietnam. Recent economic forecasts have predicted a
US$5 billion increase in value over the next six years, reaching a net
worth of US$8 billion by 2020 - a compound annual growth rate
(CAGR) of 15.4 percent. Driving this market growth is theVietnamese
government’s goal of achieving universal health coverage by 2015.
Thirty percent of the country’s population still has no form of public
health insurance.
Automotive
Vietnam is becoming an important market for auto sales - August
was the 17th consecutive month of sales growth, with a 59 percent
year on year increase and total sales of 12,562 units. Overall sales
for 2014 are now forecast to be 130,000 units, representing an 18
percent growth year on year. Sales for the eight-month period saw
a 32 percent increase compared with 2013. Interestingly, despite
the country’s recent economic struggles, the luxury car market has
continued to see healthy growth.
Despite an increasingly competitive auto market throughout the
ASEAN region, Vietnamhas stated that it intends towork aggressively
tobuildup its owndomestic auto industry. Among the key reasons for
this goal is that the auto industry has the potential to create thousands
of jobs for locals and create a strong system of supporting industries.
Coffee
Vietnam is poised to become the world’s largest producer and
exporter of coffee. Currently, the country is theworld’s second largest
coffee exporter, behind only Brazil. However, many experts believe
that Vietnam has the potential to overtake Brazil thanks to such
factors as favorable climate conditions and lower cost production.
In recent years, coffee has become one of Vietnam’s key agricultural
export products - with 95 percent of output being shipped abroad.
E-commerce
Vietnam is quickly becoming a prime market for foreign investment
in e-commerce activities. The country’s rapidly growing economy
and middle class are, in turn, spawning a strong consumer culture
and increasing levels of disposable income. Electronic retail is fast
becoming the preferred method of shopping—particularly among
the country’s youth. It is predicted that in 2015 Vietnam will see
more than US$4 billion in B2C e-commerce sales - current sales are
estimated at around US$2.2 billion, with an average spending of
US$120 per capita.
By 2016, internet penetration inVietnamwill reach 43million people
– 40-45 percent of the total population. This percentage is thought
to be the “golden proportion” at which investors will pour into the
e-commerce market.
For a consultation on
Vietnam’s Export and Import Procedures
on specific products, please contact us at
vietnam@dezshira.com