Vietnamese Goods Dominating Cambodian Market

A great number of Vietnamese enterprises have launched branches to introduce their products in Cambodia. Many trade promotion fairs between the two countries have been held and Vietnamese goods have flooded in Cambodian markets and supermarkets. This showed that Vietnamese commodities have gradually gained neighbouring customers.

As of late October this year, trade between Vietnam and Cambodia reached over US$1 billion. Export revenue of Vietnam to Cambodia is forecast down 16 percent and Cambodia’s export revenue to Vietnam also down 7 percent. However, Vietnam has still seen trade surplus of US$907 million to Cambodia, accounting for over 90 percent. Next year, the two nations aim to raise bilateral trade to US$2 billion.

“Made in Vietnam” products in favour

This year, Vietnamese firms have opened many distribution networks in Cambodia. Viet Tien Garment JS Company has launched a general agency to introduce its products branded Viettien and Viettien Smart Casual in Phnom Penh in September this year. Besides, the Bank for Investment and Development of Vietnam (BIDV), Sacombank and Viettel have also opened their branches here.

With nearly 15 million people average per capital income of US$600 per year, Cambodia does not limit the volume of imports. Cambodia is considered as a potential market for Vietnam.

According to the Committee for Overseas Vietnamese Affairs (COVA), around 100,000 Vietnamese people are living in Cambodia. This is a bridge for Vietnamese firms to develop their business activities in the neighbouring country.

Do Thang Hai, Head of the Trade Promotion Agency under the Ministry of Industry and Trade, said the Ministry worked out a trade promotion programme in Cambodia five years ago. The programme includes support in information, market survey and distribution for enterprises.

Hai also added that, this year, a range of trade promotion fairs between the two nations have been organised. Particularly, Vietnamese goods accounted for 50-60 percent of products displayed at some international trade fairs in Cambodia, meanwhile, Thailand and China make up just 40 percent.

Confident to compete

Vietnamese products have more competitive advantages more than goods from Thailand and China thanks to cheap prices and good quality. With geographical advantages, Vietnam can maintain the leading position in Cambodia thanks favourable conditions for forwarding.

Vietnamese mainly exports to Cambodia are steel, iron, agricultural machines, fertilizer, pesticides, industrial products, consumers goods, farm produces, milk, seafood and re-exported petroleum products. Vietnam mostly imports materials from Cambodia for the rubber, garment and auto sectors.

Hai noted Vietnamese products have secured a firm foothold in Cambodia. Many consumer goods account for up to 60-70 percent of the Cambodian market such as plastics products, noodle and soap. Vietnamese companies have accumulated experience to do business in the neighbouring market.

He analysed that, in the past, local businesses did not have much comprehensive studies on Cambodia; therefore, it will be difficult for their products to compete with ones from Thailand and China. However, with trade promotion programmes being carried out by the MoIT, when entering the Cambodian market, Vietnamese firms should have their own strategies to achieve successes. Moreover, Cambodia can be regarded as a goods exchange centre of the whole Southeast Asian region. Goods from Vietnam, Indonesia, Singapore, Malaysia and Thailand have transported via Cambodia before being moved to other markets.

The two countries have boosted trade ties by offering many trade preferences for goods of each other. Particularly, Cambodia and Vietnam have agreed to exchange 40 agricultural products at the zero tariff level.

Recently, Vietnam and Cambodia opened three pairs of border gates, comprising Xa Mat, in Tay Ninh province, and Trapeang Phlong in Cambodia; Tinh Bien in An Giang and Ta Keo ; Ha Tien in Kien Giang and Lork Kam Pot in Cambodia. Besides Moc Bai border gate, Tay Ninh province, these new border gates are expected to accelerate trade ties between the two nations. Efforts to improve policies, infrastructure and transport are momentums to strengthen the two-nation economic cooperation.

Posted by VBN on Jan 8 2010. Filed under Trade. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry