Vietnamese firms seek new export markets

Many Vietnamese companies have begun to re-evaluate their internal strengths as a key factor in maintaining their export positions.

Expanding into Southeast Asia

Just back from a major food fair held in Singapore, Nguyen Thanh Hien, CEO of Tomcare Biotech Co. Ltd., the owner of the Chilica chili sauce brand, received three cooperation proposals from partners in the region.

“We are focusing on expanding our consumption market in Asia, particularly Southeast Asia,” Hien told Tuoi Tre (Youth) newspaper.

Previously, the U.S. accounted for 30–40 percent of Chilica’s export revenue, but this share has now declined to around 20 percent.

The reason, according to him, is to reduce dependence and avoid direct competition with giants such as Sriracha, owned by chili sauce billionaire David Tran.

Unlike Chilica, Song Hong Garment Joint Stock Company is maintaining a strong market share in the U.S. while expanding into new markets such as Africa and Dubai.

In the first quarter of this year, the company increased export volumes, helping its net revenue grow more than 34 percent to over VND1 trillion (US$38.5 million), with orders secured through the end of the year.

The company’s leadership stated that recent contracts have boosted revenue, and cost-saving measures helped increase profit by over 82 percent.

As it diversifies export markets, especially into promising regions like Dubai and Africa, Song Hong’s leadership emphasized the importance of caution in all new markets.

The most critical factor when investing, they said, is assessing the financial capacity of customers.

While orders may be reduced, the company expects to receive orders shifted from China and has maintained an optimistic business outlook.

The company also aims to expand its market share in the U.S. through strategic partners such as Columbia Sportswear, Walmart, and Target, and by establishing a joint venture in Egypt to take advantage of low labor costs and enjoy a tax exemption on exports to the U.S..

However, difficulties in training local managers and securing fabric supply chains remain significant barriers.

Reassessing internal capacity, export methods

In their effort to diversify export markets to reduce risks, Vietnamese enterprises face many challenges, particularly price competition from lower-cost rivals.

Therefore, in addition to short-term solutions, cautious long-term strategies that carefully calculate costs and profits are needed.

Export methods are also an important factor, directly affecting cost and tax calculations. 

Not all increased taxes can be passed on to consumers, as this depends on the product category and sales method.

Pham Sy Thanh, director of the Center for Chinese Economic and Strategic Studies, warned that among Vietnam’s six key export groups to the U.S., many products could be replaced if prices rise due to tariffs, while competitors retain pricing advantages.

“When assessing the impact and seeking solutions, especially for export groups with revenue over $1 billion each, it is essential to analyze the export methods being used currently," Thanh noted.

Despite having advantages in raw materials with distinctive flavors, Nguyen Thanh Hien, CEO of Tomcare Biotech Co. Ltd., acknowledged that the biggest weakness of Vietnamese businesses is marketing.

“Our biggest challenge is getting customers to know about Chilica chili sauce. We haven’t done enough marketing. This is a common weakness among many Vietnamese businesses—they lack resources and experience to promote their products,” Hien said.

He believes that if Vietnamese companies can leverage their unique advantages such as climate, soil, and the original flavor of local produce, they can truly differentiate their products.

When combined with proper investment in technology for harvesting, processing, and preservation, businesses can build a distinct competitive edge, even when competing against countries with large-scale production strengths.

Vietnam–US fruit trade: a two-way opportunity

In addition to boosting exports, many businesses see opportunities to import premium products from the U.S. to meet domestic demand.

In 2024, Vietnam imported nearly $550 million worth of fruits and vegetables from the U.S., a 64-percent increase over 2023.

Currently, eight types of U.S. fruits are licensed for import into Vietnam, including apples, grapes, oranges, cherries, pears, blueberries, peaches, and nectarines. 

Three others—mandarins, lemons, and plums—are in the negotiation process.

The Plant Production and Protection Department under the Ministry of Agriculture and Rural Development plans to send staff to the U.S. to inspect growing areas and prepare for the upcoming trade season.

Speaking to Tuoi Tre, Francis Le, a representative of the U.S. agricultural product industry association in Vietnam, said they are working to bring the first shipments of nectarines to Vietnam.

“The U.S. is the second country, after Australia, to be permitted to export nectarines to Vietnam. Many local businesses are proactively placing orders, although initial supply volumes are hard to estimate as consumers are still unfamiliar with the fruit,” he said.

Nectarines will be shipped by air, similar to cherries. 

Francis estimated that Vietnam imports 600,000-700,000 boxes of cherries from the U.S. each year, with each box measuring five kilograms, and about two million boxes of apples, with each box measuring 20 kilograms.