Efforts to develop Vietnamese Brands in the CPTPP Market: Seminar
WVR - Despite an increase in quantity and export value, Vietnamese brand products in the CPTPP market remain modest, with many products still carrying foreign brands.
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| Speakers at the seminar "Developing Vietnamese Brands in the CPTPP Market" held on September 27th in Hanoi. (Photo: HQ) |
At the seminar on "Developing Vietnamese Brands in the CPTPP Market" held on September 27th, the speakers believed that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), officially effective from January 14th, 2019, is expected to be a turning point in creating new momentum and promoting trade and investment cooperation between Viet Nam and CPTPP member countries.
Speaking at the seminar, Mr. Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department, under Ministry of Industry and Trade, stated that discussions surrounding the CPTPP mainly focus on three markets that did not have a free trade agreement (FTA) with Vietnam prior to the CPTPP's effectiveness: Canada, Mexico, and Peru. Since the implementation of the CPTPP, the two markets of Canada and Mexico have experienced very encouraging growth. Furthermore, the trade surplus Vietnam has gained from these two markets often accounts for one-third to half of the total trade surplus with countries involved.
Regarding the Peruvian market, Vietnam often thinks that this is not a large market, but in reality, the its growth potential is very high, with some years experiencing triple-digit growth.
However, there is still a significant potential for enterprises to penetrate deeper into markets like Canada, Mexico, and Peru. Some products currently account for only about 3 – 5% in these markets; the image of Vietnamese brands in these markets is still relatively modest.
Ms. Tran Thu Quynh, Commercial Counsellor of the Vietnam Trade Office in Canada, informed that Canada is currently one of Vietnam's top 10 most important trade partners globally. According to data from Canadian authorities, in 2022, Vietnam's exports to Canada increased by 26.4% in value compared to 2021, and five years after the implementation of the CPTPP, it increased from 4,1 billion USD in 2018 to 9,9 billion USD in 2022.
As reported by Vietnam General Department of Customs, Vietnam's export value to the region increased by 110% after five years, making it the billion-dollar market with the highest export growth rate among CPTPP countries. With such high export growth, Vietnam has now become Canada's seventh-largest import partner, and Canada is a country with which we have a very large trade surplus, amounting to over 9 billion USD.
According to Ms. Tran Thu Quynh, the CPTPP has a leverage effect in increasing the interest of businesses from both countries regarding the structure of each other's products and markets. Additionally, the CPTPP has a positive impact and a spreading effect that further promote the development of supply chains, transportation, and logistics between Vietnam and Canada.
However, the utilization rate of tariff preferences under the CPTPP is not high, with up to 60% of products eligible for 0% tariff not being fully exploited. Moreover, over 60% of Vietnam’s exports to Canada are products from the FDI sector with their own brands, while the domestic sector primarily exports raw or processed goods.
In practice, after the implementation of the CPTPP, exports of items eligible for 0% tariffs, such as phones, electronics, home appliances, basic metals, seafood, vegetables, fruits, and even other products like cashews, tea, coffee, etc., have surged, regardless of the preferential form used.
Some items have increased by 1000%, showing that the CPTPP has a leverage effect in increasing interest among businesses in both countries in each other's product and markets structure, thereby, indirectly promoting the export of items without a tax reduction roadmap. Furthermore, the CPTPP also positively impacts Vietnam's exports, promoting the development of supply chains, transportation, and logistics between the two countries.
Many "made in Vietnam" products have been exported under their own brands, like Trung Nguyên coffee, Vinamilk dairy products, Viettel telecommunications services, and Vinfast automobiles. These successes have a positive impact on potential markets, including member countries of the CPTPP, helping Vietnamese export industries and businesses to increase market share or brand value in traditional markets and access new markets.
However, despite the increase in quantity and export value, the exports of Vietnamese brand goods to the CPTPP market are still relatively modest. Many Vietnamese products exported to the CPTPP market still carry foreign brands.
Mr. Khanh pointed out that “in these markets, people know about Vietnamese coffee, Vietnamese rice, however, they could only recognize one specific Vietnamese brand.”
Ms. Trinh Huyen Mai, Deputy Head of the Trade Promotion Policy Development Division at the Trade Promotion Agency, Ministry of Industry and Trade, mentioned that currently, the majority of Vietnam's export companies are small and medium-sized enterprises (SMEs). Their export activities mostly involve processing export supply chains or exporting raw materials and primary inputs for manufacturers and processors abroad.
These foreign companies purchase, reprocess, package, and export under their own brands, resulting in modest added value and own branding for Vietnam. Moreover, successful brand development remains limited to a few enterprises with substantial capabilities, market knowledge, and a systematic strategy.
Ms. Mai stated that the Ministry of Industry and Trade has instructed the Trade Promotion Agency and related units to persistently continue brand building and development at various levels.
Firstly, there is a continuous effort to improve the awareness of all levels of the government and sectors about the importance, role, and necessity of brand building, especially among business leaders.
Secondly, there is an emphasis on strengthening activities and enhancing the capacity of businesses in terms of building, developing, and managing their brands.
Thirdly, at the national level, there will be an intensification of promotional activities for Vietnamese national brands, targeting products that have achieved national branding and are Vietnam’s export strengths.
Fourthly, at the industry level, the Ministry of Industry and Trade will continue to support associations in developing competitive brand strategies for their sectors, establishing and promoting geographical indications of the industry. This approach aims not only to promote and develop but also to protect these brands in the global market.
Fifthly, there will be ongoing encouragement and support for businesses that have products with national branding, and those with the potential and ambition to bring the Vietnamese brands to conquer the global market.
