Vietnamese exports to Germany: Quality is the keyUpdate: 11/25/2014
(VEN) - According to the Vietnamese Trade Office in Germany, to make the most of opportunities from future trade agreements and the large number of Vietnamese people living and working in Germany, domestic businesses need to pay special attention to the quality of their products.
Trade revenue grows by an average of 15 percent per year
According to the Vietnamese Trade Office in Germany, Germany has great demand to import food, foodstuff and consumer goods. Germany spends about US$550 billion on consumer goods imports per year. Imports to Germany not only serve the domestic market but are also exported to the 27 members of the European Union (EU) and other countries in Europe.
Germany currently is Vietnam’s largest trade partner in the EU, with two-way trade increasing by about 15 percent per year. Vietnam has recorded a continuous trade surplus with Germany. According to the General Department of Customs, Vietnamese-German trade reached US$7.692 billion in 2013, an increase of 18.8 percent on 2012. The figure came to US$6.47 billion in the first 10 months of this year including US$4.19 billion worth of Vietnamese exports to Germany. Major Vietnamese exports to this market are telephones and accessories, textiles and garments, computers, electronic ware and accessories, seafood, bags, suitcases and hats.
Opportunities for Vietnamese exports to Germany are ample since they currently account for only 0.2 percent of Germany’s total imports. In addition, the two countries have concluded a series of important agreements such as agreements on dual taxation avoidance, investment encouragement and protection, and cooperation in ocean shipping and aviation which will provide a legal basis for enhancing bilateral economic and trade relations. Moreover, the Vietnamese community in Germany of more than 125,000 people will also offer great opportunities for Vietnamese businesses to boost their exports to this market. Vietnam and the EU are also trying to negotiate an FTA. Vietnamese Trade Counselor in Germany Nguyen Thien Binh said that after the EU-Vietnam FTA (EVFTA) is concluded, tariff barriers will be entirely removed providing opportunities for Vietnamese goods to increase their presence in EU member countries including Germany.
Product quality is in focus
Challenges exist together with opportunities as after the EVFTA is concluded, the quality of goods will become a major competitive factor. Germany is a hard-to-please market and it regularly updates its import standards resulting in a very complicated goods standard control system which has greatly hindered exporters to this market.
Nguyen Thien Binh recommended that Vietnamese businesses improve their understanding of international trade and renew their business strategies to develop their exports to Germany in a sustainable manner. They also need to focus on specialized and quality exports and offer a large amount of goods at a competitive price, rather than sell a wide variety of goods like in previous years. Businesses should emphasize branding, renewing product design and drawing up long-term business strategies for the market in Germany.
Vietnamese businesses need to dramatically change their thinking and action by strongly shifting from competition in terms of price to productivity and quality since product quality is the key for businesses to enter the German and wider European market. Only by improving product quality and making the most of advantages from FTAs including the upcoming EVFTA, businesses will be able to sharpen their competitive edge and stay in the market, said Nguyen Thien Binh.
Making the most of opportunities
Vietnam and Germany will celebrate 40 years of diplomatic relations in 2015. For this reason, the Vietnamese Embassy and the Vietnamese Trade Office in Germany have chosen boosting economic and trade relations as a major task of the year.
So far this year the Vietnamese Trade Office in Germany has launched a full array of trade promotion events such as a business forum which was held this April during the visit to Germany by Vietnamese Minister of Planning and Investment Bui Quang Vinh hosting more than 200 German businesses. In addition, a bilateral trade promotion forum took place this June in Berlin during the visit to Germany by Vietnamese Minister of Industry and Trade Vu Huy Hoang receiving about 300 German and Vietnamese companies. Vu Huy Hoang attended the opening ceremony for the Vietnamese Goods Days in Metro, Berlin on June 26.
Nguyen Thien Binh said that traditional trade promotion activities such as international workshops, trade fairs, meeting distributors, opening showrooms, launching sale campaigns, offering sample products and advertising products via media will be launched regularly./.
By Phuong Lan