Processing agricultural products for export. Illustration photo: (TTXVN)

Vietnam's largest commodity export market

According to a report from the Ministry of Industry and Trade, in the eight months of 2023, Vietnam's export turnover of goods to the United States is estimated to reach USD 62.27 billion. Despite a decrease of 19.1% over the same period last year due to the general impact of the global economic downturn, the United States is still Vietnam's largest export market.

Regarding export commodity groups, according to the latest analytical data of the General Department of Customs, by the end of July, there were 8 commodity groups exported to the United States reaching USD 1 billion or more such as: machinery, equipment, tools, and accessories. spare parts reached USD 9.3 billion; computers, electronic products and components reached USD 8.75 billion; textiles reached USD 8.46 billion; footwear reached USD 4.09 billion... Many product groups in the agricultural sector also have turnover reaching from one hundred to hundreds of USD millions of such as: seafood, vegetables, cashew nuts, coffee...

On the contrary, imports of goods from the United States in the first 7 months of the year reached more than USD 8 billion, down 7.4% over the same period last year, accounting for 4.5% of the country's total import turnover.

Minister of Industry and Trade Nguyen Hong Dien said that in the first 8 months of 2023, the difficult economic situation and high inflation rate in the United States caused the purchasing power of consumer goods to decrease significantly. The US Federal Reserve (FED) continuously raising interest rates to control inflation has caused consumer demand in the US to decline because of high interest rates. Besides, cyclical factors and rising inventory reserves are also one of the reasons why Vietnam's exports to the United States decreased in the first months of the year.

However, this decrease is assessed as temporary and not a major trend in the near future. Vietnam's exports have grown again in recent months, showing an expected improvement for 2023, when many organizations assess that the FED has reached the final stage of the cycle of increasing interest rates, purchasing power and confidence. US consumer’s confidence is rising again. Vietnam's traditional and strong export products such as textiles, furniture, footwear, and electronics... are assessed to continue to recover with positive export growth rates.

Notably, in recent years, Vietnam has been transforming strongly to become a major global manufacturing center. Vietnamese enterprises have produced many products with rich types, competitive prices and increasingly improved quality. In addition, after the pandemic as well as recent geopolitical-economic instability, many corporations, retail and wholesale distribution channels are promoting diversification strategies, ensuring sustainable supply and have been choosing Vietnam as a strategic location in the global supply chain.

Mr. Nguyen Thang Vuong, Department of European and American Markets (Ministry of Industry and Trade), said that the strong trend of shifting global supply chains brings many opportunities and challenges for Vietnamese businesses participating in supply chain. For example, to date, Apple Corporation of the United States has completed the transfer of 11 factories producing audio-visual equipment to Vietnam. A series of large American corporations such as Boeing, Google, and Walmart have also announced their search to expand their supplier networks and develop production facilities in Vietnam after a long period of studying the business investment environment in Vietnam.

Concentrating on new trends

In addition to traditional channels, Vietnamese exports to the US market through online platforms have a lot of room. Because, the United States is the main driving force behind the rise of global e-commerce, with total e-commerce sales in the United States reaching USD 1.03 trillion in 2022.

According to the European-American Market Department, online shopping is considered to be the future shopping trend in the United States. Therefore, online sales opportunities in this market in the coming time still have a lot of room for development and Vietnamese businesses need to grasp this trend to develop exports and create goods export channels, more competitive offerings through online platforms, in addition to traditional channels to US customers.

To access the market, Mr. Tran Dinh Toan, representative of the E-commerce Association, Deputy General Director of OSB Investment and Technology Joint Stock Company, said that many Vietnamese businesses have taken advantage of and exploited opportunities from cross-border e-commerce, but this quantity is not much. According to Mr. Tran Dinh Toan, competition in the virtual environment is very fierce, buyers only have a few seconds to decide to stop and buy. Therefore, businesses need to build reputable booths, operating 24/7, so that shoppers have choices and make purchasing decisions. In addition, Vietnamese businesses need to pay special attention to the consumption trends of the European and American markets, which are currently focusing on green product trends.

It can be seen that with the current difficult and challenging global economic context, many trends have appeared in consumer demand and tastes in export markets of Vietnam and the United States under new trends, new requirements, especially price, quality and requirements related to environmental protection and sustainable development, "green production" standards, "clean and sustainable" supply chain.

The Minister of Industry and Trade emphasized that this requires Vietnamese businesses to quickly adapt to those changes. Businesses exporting to the United States need to clearly define product strategies, partners, and distribution channels; Thoroughly research regulations, export barriers, and possibilities related to trade defense cases; ensure input materials have clear origins, do not affect the environment or use forced labor; At the same time, gradually research and upgrade production facilities and factories according to "green production" standards.

In addition, businesses need to actively participate in trade promotion programs, exhibitions, connect with relevant agencies, create reputation and build trust with US customers. To develop the market, in addition to cooperating with large importers and distribution channels, businesses also need to apply a customer diversification strategy and actively seek niche markets to minimize risks.