Vietnamese brands reaching international markets

DNHN - Although Vietnam is regarded as the new manufacturing hub as multinational companies implement the "China+1" strategy, very few domestic brands are known by foreign consumers.

This observation was shared by lecturers in the International Business Department at RMIT University during the Global Business Forum 2024, organized by the university's School of Business.

Dr. Dang Thao Quyen, Head of the International Business Department at RMIT, noted that most Vietnamese companies involved in the global value chain operate in low-value-added segments. For instance, while Vietnam is the largest exporter of cashew nuts globally, most of them are exported in raw form.

Similarly, Vietnam's textile and garment industry is one of the world's leading exporters, but many companies only focus on processing. "As a result, only modest revenues remain in Vietnam," she said.

In contrast, Switzerland provides a completely opposite example.

"Although the country cannot grow raw cocoa beans due to its climate, Switzerland is world-renowned for premium chocolate brands like Lindt and Toblerone," Dr. Quyen stated.

She believes that to elevate Vietnam's economy and improve per capita GDP, domestic companies should adopt innovative approaches by focusing on building long-term capabilities from the very beginning, enhancing competitive advantages, and expanding to global markets.

Many hold the traditional view that businesses should establish a strong position domestically before "going abroad." However, Dr. Quyen offers a different perspective: "Why not do both simultaneously or consider expanding abroad right after gaining a foothold in the domestic market?"

She emphasized, "The presence of Vietnamese brands in global markets may not be too far off if we change our mindset and act accordingly."

Ms. Natalie Thuan Ngo from Amazon Global Selling Vietnam also agreed with this perspective: "These brands don’t necessarily have to come from big corporations. Small and medium-sized enterprises can also create homegrown products that appeal to global consumers."

The fashion brand of designer Le Thanh Hoa, one of the guests at RMIT's Global Business Forum, could be a prime example. Although it has only recently ventured into international markets, Le Thanh Hoa’s designs have already been worn by numerous international stars at high-profile events such as the Oscars and Grammys or the Cannes Film Festival.

"By focusing on the combination of unique traditional Vietnamese cultural values with modern creativity, flexibility in production, competitive pricing, and high craftsmanship, Le Thanh Hoa and other Vietnamese fashion brands have significant opportunities in the international fashion market," Dr. Quyen observed.

Echoing Dr. Quyen, Associate Professor Abel D. Alonso, Senior Lecturer in International Business at RMIT, stated: "Many Vietnamese companies are increasingly focusing on value addition as a tool to access international markets. They have established a foothold in an extremely competitive business environment."

Associate Professor Alonso shared the example of DACE Vietnam, a company that collaborates with thousands of domestic farmers to achieve higher quality control, significantly improving the final products. This approach has helped bring DACE's organic products to the world.

Just two years after its establishment in 2013, DACE began exporting to Japan and South Korea. In 2018, the company achieved several important certifications (JAS Organic, EU Organic, and USDA), opening doors to more demanding consumer markets and elevating Vietnam's image internationally.

Associate Professor Alonso stated, "Research also highlights the importance of export performance in value-added activities such as product development, market capture, negotiation skills, distribution, and promotion."

"However, surprisingly, after-sales service has not yet been regarded as a significant factor."

According to Associate Professor Alonso, cashew nut exporting companies are increasingly investing in modern processing technology to meet new and stricter international standards.

For example, Organic Viet Food, a guest at the Global Business Forum 2024, has added value to cashew nuts by creating appealing flavors and convenient packaging for consumers, exporting through the Amazon e-commerce platform. The company's products quickly became popular among U.S. consumers.

Although Vietnam has many opportunities to strengthen its position in global value chains, there are also considerable challenges.

Dr. Vu Thi Kim Oanh, Lecturer in International Business at RMIT, pointed out that the shortage of both skilled and unskilled labor could hinder efforts to elevate industries. Moreover, the trend of green transformation, the need for large-scale energy production due to rapid economic development, and infrastructure bottlenecks are significant challenges.

She stated, "Financial institutions, key allies of businesses in helping them allocate much-needed resources, also face difficulties."

Dr. Oanh cited an example: "In cases of resource scarcity, they need to foster new generations in multiple aspects, including digital capabilities, product development, or partnerships."

This aligns with the practical experience of Artemis Digital, an Australian startup founded by Samuel Walter. It is also one of the main reasons why he chose Vietnam as the first international destination for his business

In the coffee sector, interviews and observations revealed that financial challenges prevent or limit businesses from acquiring new equipment or technology, as well as obstacles related to legal procedures, with lengthy paperwork and slow approvals.

"Moreover, proof of traceability or organic production, as well as certification procedures to comply with market protocols, may encounter many barriers and administrative costs," Dr. Oanh added.

However, achieving important certifications like the FDA is worthwhile as they offer significant advantages for businesses exporting products to international markets. This was the opinion of Mr. Duong Minh Tam, a scientist and CEO of Duong Gia K&T Biotechnology Company.

With the theme "Enhancing Value Addition to Expand and Compete Globally – Walking the Talk," the Global Business Forum 2024 welcomed speakers from various companies such as Amazon Global Selling Vietnam, Artemis Digital, Duong Gia K&T Biotechnology, Le Thanh Hoa, and Organic Viet Food.

The real-life business examples shared at the event provided valuable lessons for other Vietnamese businesses seeking to expand internationally.

"The next generation of business owners should not limit themselves to Vietnam's borders but dare to think big and be properly prepared," Dr. Quyen concluded.

Ngoc Hoang (RMIT)