Vietnamese SMEs can make products with global appeal: Amazon exec

Made-in-Vietnam products that appeal to global consumers can come from small and medium-sized enterprises (SMEs), not necessarily large companies, says Natalie Thuan Ngo, head of business development, Amazon Global Selling Vietnam.

Ngo was speaking at the Global Business Forum 2024 organized in Ho Chi Minh City on Friday by The Business School at RMIT Vietnam.

Dang Thao Quyen, senior program manager for international business at RMIT Vietnam, said the majority of Vietnam’s involvement in global value chains was in low-value-added segments. For example, while Vietnam is the world’s largest exporter of cashew kernels, most of these are exported as raw nuts.

Similarly, Vietnam’s textile and garment industry is a leading exporter in the world, but many businesses focus solely on outsourced work. As a result, only modest revenues from the export remain within Vietnam.

Switzerland provides a contrasting example. Although it cannot grow raw cocoa beans due to its climate, the country is world-renowned for its premium chocolate brands like Lindt and Toblerone.

Quyen said many people hold the traditional view that businesses should be well established in the domestic market before considering international expansion.

This mindset should change and from the outset, local businesses should adopt innovative approaches, focusing on building long-term capabilities, enhancing competitive advantages and expanding into global markets, she added.

“If we change our mindset and act accordingly, having Vietnamese brands with a global presence may not be a far-fetched notion,” said Quyen.

Besides, it would also elevate Vietnam’s economy and improve its per capita GDP.

Ngo said such brands don't necessarily have to belong to large enterprises. Home-grown products that appeal to global consumers can also come from small and medium-sized enterprises.

Le Thanh Hoa, one of the speakers at RMIT Global Business Forum 2024, was held up as an example.

Despite her recent entry into the global market, Le Thanh Hoa’s costumes have become favorites of many world celebrities at critical events such as the Oscars, the Grammys and the Cannes Film Festival.

“By combining traditional values and stories with modern creativity, high quality craftmanship, flexibility in production and competitive pricing, Le Thanh Hoa and other Vietnamese fashion brands have created a lot of opportunities in the international market,” Quyen said.

Echoing Quyen, RMIT senior lecturer in international business, associate professor Abel D. Alonso said that many Vietnamese companies were paying increasing attention to value-adding as a tool to gain international exposure. They have realized that this is needed to carve their own niche in an extremely competitive business environment.

Alonso shared the example of DACE Vietnam, a company that collaborates with thousands of local food growers to achieve high quality control, leading to significant improvements in their final produce. This approach has led to international interest in DACE’s organic offerings.

Only two years after its establishment in 2013, DACE began sales to Japan and South Korea. In 2018, the company obtained various key certifications (JAS Organic, EU Organic, and USDA) that opened doors to more demanding consumer markets and elevated Vietnam's image internationally.

Research has highlighted the importance of export performance in value-adding activities such as product development, market intelligence, bargaining, negotiation skills, distribution and promotion, Alfonso said.

He noted that businesses in the cashew industry are investing in modern processing technologies to meet new, stricter international standards.

For instance, Organic Viet Food, a participant at the forum, adds value to cashew nuts by creating appetizing flavors and convenient packaging to export through e-commerce platform Amazon. The company has quickly captured interest of the U.S. market.

Various challenges

While Vietnam has opportunities to strengthen its position in value chains globally, it must also address various challenges, forum speakers said.

Vu Thi Kim Oanh, RMIT lecturer in international business, said the lack of skilled and unskilled staff can hamper efforts to elevate industries.

Another challenge, unprecedented in nature, is to produce vast amounts of energy needed due to rapid economic development in alignment with the green transformation trend.

Bottlenecks in infrastructure facilities could pose yet another unprecedented challenge, Oanh said.

She said financial institutions are a crucial ally for companies, helping them allocate much-needed resources in an efficient manner.

In the absence of talent, there is a need to nurture new generations in digital capabilities, product development, and partnerships, she added.

These challenges are highlighted by the real-world experience shared by Samuel Walter, CEO of Artemis Digital, an Australian start-up expanding to Vietnam as its first international destination.

In the coffee industry, interviews and observations have revealed that financial and legislative challenges, time-consuming paperwork, and slow approvals prevented or limited businesses from buying new equipment or otherwise investing in advanced technologies.

Evidence of traceability or organic production, as well as certification procedures to adhere to market protocols was a process strewn with bureaucratic hurdles and expenditures.

However, securing important certificates such as FDA is a worthwhile effort, offering the great advantage of exporting products, emphasized scientist Duong Minh Tam, CEO of Duong Gia K&T Biotechnology JSC.

This year’s Global Business Forum 2024, themed “Escalating added value for global expansion and competitiveness – Walking the talk,” featured speakers from Amazon Global Selling Vietnam, Artemis Digital, Duong Gia K&T Biotechnology JSC, Le Thanh Hoa Fashion and Organic Viet Food.

Participants noted that case studies shared at the event served as examples for other Vietnamese businesses aiming to expand their customer base internationally.

“The next generation of business owners should not limit themselves to Vietnam's boundaries but should dare to think big, with proper preparations,” said Quyen.