From the story of the Halal market (for Muslims) with many advantages for Vietnam but still left open; to the changes in current commercial trends and thinking, which require Vietnamese businesses not to ignore but need to adapt to new strategies. Focus more on exporting to potential nearby markets.

In a recent sharing about the Halal market issue with its still open potential; Mr. Truong Xuan Trung, Vietnam Commercial Counselor in the United Arab Emirates (UAE), said that Vietnam has 3 competitive advantages when exporting to the markets of Muslim countries. First is the geographical advantage of being located in Southeast Asia and Asia with a large Muslim population (such as Indonesia, Malaysia, the Middle East...).

Why is the Halal market still open?

The second advantage is that Vietnam has policies and plans to develop relations with Middle East and African countries in the period 2016 - 2025; including a high-level statement from the Vietnamese Government to partners on promoting cooperation in production, import, and Halal certification. This is also a favorable condition for Vietnamese enterprises to export to the Halal market.

To improve export growth, Vietnamese businesses need to proactively connect more with buyers in nearby, potential markets.

The third advantage is that Vietnam is currently one of the world's leading countries in exporting agricultural and aquatic products and processed agricultural products such as rice, tea, cashew nuts, coffee, pepper; beverage products…

With three such advantages, according to Mr. Trung, Vietnamese goods can completely compete with products of other countries when exported to the Halal market. However, there is a limitation that many Vietnamese businesses still do not have a Halal certificate or do not understand or master the standards, processes and procedures for exporting Halal products to Muslim markets. These are limitations that need to be overcome soon.

The Vietnamese Trade Counselor in the UAE also said there are interesting signs about the export of Vietnamese goods to the UAE - a leading country in the Halal market. As in the first quarter of 2024, Vietnam's export turnover to this country reached nearly 1.4 billion USD, an increase of nearly 40% over the same period last year. Among them, we can mention a number of Vietnamese agricultural products with strong growth in the UAE such as cashew nut exports increasing by 41%; Vegetables and fruits increased by 35.5%, seafood increased by more than 37%, rice increased by more than 65%...

As Mr. Trung noted, Vietnamese businesses need to pay more attention to exporting to the Halal market when the scale and demand of this market is very large (could reach 5,000 billion USD by 2030). For example, the world's leading Halal market and very close to Vietnam is Indonesia (with more than 240 million Muslims) with a very high demand for Halal products that Vietnamese businesses need to grasp.

Or like the UAE market with the amount of Halal food and cereals (including fresh and frozen products) consumed annually about more than 420,000 tons. According to Mr. Trung, the city of Dubai in this country is also the place to transship Halal products to the world and has a Halal market size of about 512 billion USD/year; or according to forecasts, the UAE's Halal beverage market will exceed 5.5 billion USD in 2024. Such relatively impressive numbers require Vietnamese exporters to pay more attention to this market.

“If you look at the growth figures on consumption of main product groups in the UAE market, you can see that Vietnam has strengths in product groups such as agricultural products, processed agricultural products, and cereals. Therefore, to further promote the export of Vietnamese products to the UAE in particular and the Halal market in general; requires Vietnamese businesses to urgently apply for Halal certificates to meet export standards into Muslim countries' markets," the Vietnamese Trade Counselor in the UAE emphasized.

Adapt to new strategies

Not only with the Halal market, bringing Vietnamese goods into nearby, potential markets has not yet been deeply exploited and given much attention by Vietnamese businesses; Even though these markets have high demand for products that are Vietnam's strengths.

Even when a company in the wood industry opened a showroom in Cambodia, shareholders questioned the company's leaders about why they did not focus on the US market but instead targeted a similar market.

For example, An Cuong Wood Joint Stock Company at the end of last year opened their first showroom in the capital Phnom Penh (Cambodia) and in April 2024 opened a furniture showroom in the capital Vientiane (Laos).

Explaining to shareholders at the recently held 2024 annual shareholder meeting, Mr. Le Duc Nghia, Chairman of the Board of Directors of An Cuong Wood Joint Stock Company, said that the US market is very large, focusing on the US is right. However, the Laos and Cambodian markets cannot be ignored. Focusing on the US, but if the surrounding market can sell, why not sell? Therefore, the company is also expanding exports to nearby markets in the region such as Malaysia and Singapore.

According to Mr. Nghia, last year the Cambodian market alone brought in about a hundred billion VND in revenue for his company. Rich people here often choose the best and highest quality products.

From the perspective of an economic expert, Dr. Daniel Borer (RMIT University) believes that with the current geopolitical scenario, Vietnam should strengthen trade relations and promote exports with friendly and closer partners.

For example, Australia and New Zealand, according to Mr. Borer, these are countries that have great trade potential with Vietnam but have not been exploited much.

According to the RMIT expert, the "near-shoring" trend is causing multinational corporations to move production facilities closer to customers. In addition, there has been a change in thinking as trade is now more regional. Countries appear to have quickly adapted to this new strategy.

Therefore, the fact that Vietnamese enterprises focus more on exporting goods to nearby, potential markets is completely consistent with the current trend and regional trade thinking. In particular, it is necessary to fully take advantage of the potential of the Asian market with the Regional Comprehensive Economic Partnership (RCEP) signed in 2020, creating the largest trade bloc ever with members include ASEAN, China, Korea, Japan, Australia and New Zealand.

This requires Vietnamese businesses to recognize and closely monitor geopolitical tensions that are reshaping global trade; from there, change and adapt to the new strategy, and not continue to neglect nearby and potential markets, in order to contribute to increasing export turnover for Vietnam.

According to: The Vinh - Vnbusiness Newspaper