Increasing the presence of Vietnamese goods in RussiaUpdate: 11/25/2014
(VEN) - According to the Vietnam Trade Office in Russia, Russia is an open market from which export businesses can easily make a profit. To penetrate the Russian market and increase the market shares of Vietnamese goods in Russia, domestic businesses must be more active in trade promotion activities.
Vietnamese goods sell well in Russia
The Vietnam Trade Office in Russia said that Russia was a potential consumer of products which were Vietnam’s export advantages and Russia could not produce due to unsuitable climatic conditions, for example rice, tea, coffee, cocoa, pepper and cashew, and products which Russia could produce but domestic production was yet to meet consumer demand, for example seafood, vegetables, roots, fresh and canned fruit, beef, pork and poultry. Other products such as light industrial products such as candy, handbags, textiles and garments, footwear, computers, cell phones and components also sell fairly well in Russia.
Vietnamese Commercial Counselor in Russia Pham Quang Niem indicated some factors which would facilitate trade cooperation between the two countries. Firstly, the comprehensive strategic partnership between Vietnam and Russia continues to strengthen and expand based on deepening mutual trust. Secondly, the structure of Vietnamese export products is different from that of Russia, so Vietnamese and Russian exports do not compete but complement each other. Thirdly, the US and the EU have imposed an embargo on Russia, offering good opportunities for Vietnam to increase exports to Russia, especially agricultural products and seafood. However, these are just short-term opportunities for Vietnamese businesses to increase the presence of their products in the Russian market. Fourthly, most Russian consumers like Vietnamese goods. Fifthly, Vietnam and the Customs Union of Russia, Belarus and Kazakhstan have negotiated a free trade agreement for seven rounds and expected to finish negotiations later this year. This is a very important agreement that will create a favorable legal corridor for Vietnam to boost exports to Russia.
Despite great potential, trade between Vietnam and Russia is still modest. Data from the General Department of Vietnam Customs show that last year, bilateral trade reached US$2.7 billion, including US$1.9 billion worth of Vietnamese exports to Russia. In the first 10 months of 2014, Vietnam exported to Russia US$1.46 billion worth of products, mostly including seafood, fruit and vegetables, cashew, coffee, tea, pepper and rice. However, Vietnamese exports just account for 1-1.5 percent of Russia’s import volume.
Promoting trade with Russia
To increase exports to Russia, the Vietnam Trade Office in Russia has intensified trade promotion through activities such as advertising, opening showrooms to present Vietnamese goods and services, and participating in exhibitions and trade fairs.
Pham Quang Niem said that Vietnamese companies should not rely totally on the Internet to establish partner relations with Russian businesses. They should meet to exchange information and develop their relations in traditional manners. Therefore, trade promotion activities of Vietnamese ministries, sectors and businesses in 2014 were concentrated mostly on trade and investment. Specifically, the 21st International Exhibition for Food, Beverages and Food Raw Materials (PRODEXPO 2014) held by the Russian Ministry of Agriculture under the patronage of the Chamber of Commerce and Industry of the Russian Federation took place in Moscow from February 9-13. The exhibition attracted the participation of businesses from 64 countries with hundreds of pavilions. Vietnam’s Me Trang Coffee Joint Stock Company gained good results through its participation in PRODEXPO 2014. The 23rd International Food & Drinks Exhibition (WorldFood-2014) took place in Moscow from September 15-18, attracting the participation of hundreds of agricultural product producing and trading companies from different parts of Russia. Vietnamese agricultural products and seafood were present in this exhibition. As part of WorldFood-2014, a Vietnam-Russia business forum was organized on September 16 by the Vietnamese and Russian Ministries of Industry and Trade and the Chamber of Commerce and Industry of the Russian Federation to promote trade and investment between the two countries. The forum took place at the Moscow International Business Center, attracting nearly 300 attendants. This activity was expected to contribute to further promoting economic, trade and investment cooperation between Vietnam and Russia in the coming period.
In the context of Russia encouraging domestic production of agricultural and aquatic products and imports from Latin America, Asia-Pacific and neighboring countries, Golden Autumn 2014, a Russian agricultural fair, took place from October 8-13 at the All-Russia Exhibition Center, Moscow. A 40sq.m pavilion of the Vietnamese Ministry of Agriculture and Rural Development (MARD) and some Vietnamese businesses presented a range of tropical agricultural products. The MARD organized a workshop as part of Golden Autumn 2014 to promote trade and investment between Vietnam and Russia in the fields of agriculture, forestry and fisheries.
Pham Quang Niem emphasized that trade promotion activities were crucial to increasing exports to Russia. To ensure the maximum effectiveness of these activities in the time to come, the Vietnam Trade Office in Russia recommended, “Businesses which want to participate in fairs and exhibitions should contact their organizers three months in advance to negotiate for their presence in pavilions at good locations and advertise their products through the organizing boards and the mass media. They must carefully select suitable products to be present at fairs and exhibitions. Schedules for organizing business forums and workshops must be made at least one quarter in advance so that preparations can be taken as carefully as possible. Trade promotion delegations should maintain close contact with the Vietnam Trade Office in Russia to ensure substantial results of each trade promotion activity./.”
By Lan Phuong