“It’s a surprise that Cambodian people like Vietnamese goods these days”: Thuyen, a Viet merchant at Vinamart mall in Nom Benh

A woman carries a large load of goods from Vietnam to Cambodia via the Tinh Bien Border Gate.

Vietnamese businesses gain traction in Cambodia

Saturday, October 3, 2009
Thanh Nien News (Hanoi)

Thai and Chinese enterprises lose Cambodian market shares to Vietnamese investors.

Le Hong Thuyen is home from Cambodia looking for new suppliers for her shopping mall in Phnom Penh.

The mall, named Vinamart, is the Cambodian capital city’s number-one outlet for Vietnamese products. When it opened in 2006, Vinamart only sold a limited product range supplied by 16 Vietnamese producers. But the outlet has grown larger, and now offers a vast array of both Vietnamese and Cambodian goods.

“It’s a surprise that Cambodian people like Vietnamese goods these days,” said Thuyen. “They especially like Vietnamese food products... they’ve gotten to know and trust Vietnamese brands.”

Lay Vannak, deputy major of Takeo Province, which borders Vietnam’s An Giang Province in the Mekong Delta, said Vietnamese products had expanded their market shares in Cambodia and “some products have defeated those from Thailand and China.”

He said Vietnamese businesses have improved their competitiveness in terms of both quality and packaging.

Launch-pad

An Giang Province has a long border with Cambodia and accounted for 70 percent of bilateral trade between the two countries. Vietnam exported US$1.7 billion goods to Cambodia last year, an annual growth rate of 40-45 percent.

In August, the province officially opened the Tinh Bien Economic Border Gate Zone, where Cambodians, Vietnamese and international tourists can access duty free goods at the border.

Nguyen Minh Tri, head of the province’s Economic Border Gate Authorities, said the zone and its ten supermarkets were a strategic foundation upon which Vietnamese goods could penetrate the Cambodian market.

He also said the zone acted as a depot from which exports were launched to other markets around the globe.

Ho Chi Minh City’s Industry and Trade Service said it was difficult for Vietnamese businesses to store their products in Cambodia and it would be hard for them to boost their exports to the market where local production was underdeveloped.

Vu Kim Hanh, chairwoman of the Vietnamese High Quality Goods Club, said its members planned to build a warehouse at Tinh Bien as part of their export strategy to Cambodia.

Room for improvement

Local businesses were offering strong products at competitive prices in Cambodia, but their distribution and promotion networks remain weak, according to a survey conducted in September by the Business Support Assistance (BSA) in association with Vietnamese research firm Truong Doan.

The survey of consumers and retailers in Phnom Penh and Battambong cities showed that high-quality Vietnamese goods were recognized in Cambodia but that Vietnamese products in general were attached to less competitive labeling and promotions than those from Thailand, said Truong Cung Nghia, director of Truong Doan.

Nghia said Vietnamese businesses were strong in stationaries, bicycles and two and four-wheel accessories, footwear and garments, building materials, fertilizers, seeds, home appliances and plastic products.

Consumer and retailer satisfaction with high-quality Vietnamese goods was higher than with those from Thailand and China, said the survey, which added that retailers profited more from trading Vietnamese goods.

But still, Vietnamese businesses lacked the intense promotional campaigns of their Thai counterparts, which offered free products, cost cutting and television commercials.

In need

“We need the support of Vietnamese producers in terms of a distribution strategy,” said Thuyen from Vinamart.

Thuyen said her shopping mall dealt in Vietnamese products and she was finding it difficult to train Cambodian staff as well, due to the language barrier.

Local producers should understand the difficulties and give a hand to traders like her in the new market, she said

Vietnamese product prices were also less competitive than Thai rivals, which enjoyed lower import taxes in Cambodia and had the strategic support of the Thai government, said the BSA.

The firm said the Vietnamese government should increase dialogues on the issue with its Cambodian counterparts to help Vietnamese businesses like the Thais had done.

Reported by Minh Quang

Vietnam tries to gain market shares in Cambodia through cheap products

Promoting Vietnamese goods at the Cambodian border

25/08/2009
VietNamNet/NLD (Hanoi)

VietNamNet Bridge – Now that demand from Western customers is depressed by the global economic crisis, Vietnamese businesses have been eyeing Cambodia, a neighbouring market to which they have paid little attention in the past.

Fifty Vietnamese businesses joined an ‘export-on-the-spot’ fair on August 23 at the newly-opened Tinh Bien Border Economic Zone (BEZ). The new facility is at a border crossing between Vietnam’s delta province of An Giang and Cambodia’s Takeo province, south of the Cambodian capital, Phnom Penh.

The export fair was jointly organized by the Ministry of Industry and Trade and the An Giang province People’s Committee.

Boosting export through bonded zone

A bonded zone has been established, to which businesses can bring goods and contact many prospective buyers from Cambodia, from petty merchants to big distributors. The Vietnamese businesses will not have to pay taxes (VAT and export tariff) on their sales, and they can take advantage of simplified export procedures. Meanwhile, Cambodian distributors will be able to take ownership of goods right on the other side of the border.

Many businesses have expressed their interest in this model of selling goods. Vu Quoc Dung, representing the footware maker, Bita, said that the company had sent 100,000 sample pairs of shoes to distributors in Cambodia a month earlier, and now he had come to Tinh Bien to make direct contacts with partners. Phu An Sinh Company is striving to sell frozen and processed food to Cambodia, while Kem Nghia Company aims to sell low-priced beauticians’ tools.

Many enterprises have successfully contacted Cambodian distributors, while Sacombank has helped businesses in payment procedures.

Setting up direct distribution systems

To boost exports to Cambodia, My Hao Cosmetics Company has decided to recruit a Cambodian sales director. My Hao General Director Luong Van Vinh said that because Cambodian people’s income remains low, they are interested in low cost products. This has prompted My Hao to make products suitable to that market.

The Duy Tan Plastics Company has concluded that Vietnam-made household plasticwares can compete well with Thai products in the Cambodian market, said a representative of that firm. The company’s sales in Cambodia have increased steadily. Vinamit, a farm products processor, has also decided to set up a direct distribution network in Cambodia to boost sales instead of selling goods though agents. Nutifo od said that dairy products for old people and for children will be its key products in Cambodian market.

Exports to Cambodia have been increasing so smoothly that export revenues of HCMC businesses to Cambodia in the first seven months of 2009 increased by 44 percent over the same period of 2008, even though the city’s export revenues in general decreased by 13.9 percent. Medicines, fertilizer, steel, construction materials, cosmetics, fruit, seafood and apparel are in particularly high demand.

The HCM City Trade and Investment Promotion Centre has been tasked with coordination of the export offensive. Four big corporations are expected to support the plan’s implementation: the Saigon Trade Corporation, Saigon Co-op, the Saigon Industry Corporation and Saigon Agricultural Corporation. Another large scale Vietnamese products fair is planned to be held soon in the western Cambodian city of Battambang.
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An Giang Province chairman leads marketing for Vietnam made goods

To ensure the success of the export fair at Tinh Bien BEX, Lam Minh Chieu, Chairman of An Giang province led a delegation of Vietnamese businesses to Cambodia to build interest in Vietnamese goods.

Particularly, Chieu asked two Vietnamese enterprises to give pesticide and agriculture technique training to Cambodian farmers on August 22 and 23.

Chieu noted that the economic zones in which the State has made heavy investment ought to be, not simply the places where foreign-made goods can be bought cheaply, but also ‘doors’ that introduce Vietnamese goods to foreign countries.