Businesses striving to gain foothold for exports to Australia
Vietnamese businesses need to make greater efforts to overcome barriers when they desire to gain entry into the Australian market which is seen as having untapped potential.
According to statistics from the General Department of Vietnam Customs, last year’s bilateral trade between the countries increased by 22.1% to US$6.46 billion with Vietnam’s exports to Australia accounting for US$3.3 billion, a year-on-year rise of 15.1% while imports were increased by 30.5% to US$3.1 billion.
Some of the products behind the strong export growth are cameras and components (up 329.3%), crude oil (up 69%), vehicles and spare parts (up 62%), and steel (up 61.7%). While the product areas in which Vietnam holds a distinct advantage made no significant breakthroughs in export earnings.
Nguyen Thi Hoang Thuy, head of the Vietnam Trade Office in Australia notes Australia as a choosy market with strict regulations on technical and product quality standards for imported goods based on its consumer protection policies.
This is seen as the reason why the volume of Vietnamese products in the market stands at less than 2%.
Substandard Vietnamese products and little investment in building brand names remain a major obstacle hindering domestic businesses from boosting exports to the highly lucrative market, especially most of its products exported to Australia are primarily raw and unprocessed materials.
However, Vietnam needs to capitalize on the ASEAN-Australia-New Zealand Free Trade Agreement (AANFTA) by fully grasping the details of the deal to bolster exports to Australia, particularly when 90-100% of total tax lines have been cut for the period covering 2010 to 2020.
Regarding the Australian market, exporters to the oceanic country say Australian customers pay no or little attention to the origins of imported products whereas they care about the quality, patterns, and prices, which are inherently weak points of Vietnamese products.
For their success in the potential market, Ms Thuy has urged domestic businesses to stay active in access to up-to-date market information, take full advantage of FTA preferences, and put product quality first.
In addition, it is essential for businesses to intensify proper investment in developing a material zone which is up to international standards and partner with each other to form production chains in order to sharpen competitive edge, she says.
She also assures the Vietnam Trade Office in Australia’s readiness to provide domestic businesses with updated information on tax policies, distribution networks, import regulations, and FTA preferences via its website to facilitate their market penetration.