Solving the brand "problem" to increase market share

There is still a lot of room for Vietnamese goods to increase exports to the UK market. However, Vietnamese businesses need to focus more on building their brand and reputation.

Important impacts of UKVFTA

After more than 3 years of implementation, the positive results that the UKVFTA has brought to trade and investment activities between the Vietnamese and UK business communities have been clearly affirmed.

The UKVFTA has become a bridge to bring Vietnam's strong goods to the UK market, helping to increase bilateral trade turnover. In particular, it is noted that the presence of Vietnamese brands varies by product group, reaching from 12 - 19%. The main export items are textiles, footwear, mechanical products, and aquatic products, of which textiles, footwear, agriculture and aquatic products benefit the most.

With the tariff reduction roadmap of the UKVFTA, Vietnamese goods are gradually gaining a distinct advantage over similar products from other countries that do not have an FTA with the UK. In particular, most recently, the UK's official signing of the agreement to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to continue to be a strong driving force to promote two-way economic - trade - investment relations to develop further in the coming time.

During the 3 years of implementing UKVFTA, Vietnam's total export turnover to the UK grew by an average of 9.4%/year.

Sharing about the important impacts of the UKVFTA on export activities and building Vietnamese brands in the UK, Mr. Vu Viet Thanh - Department of European - American Markets (Ministry of Industry and Trade) - said that the first impact is that Vietnam's export sector to the UK benefits greatly from the UKVFTA. If calculated for all 3 years of implementation, the total two-way trade turnover has grown by an average of 8.9%/year, of which, Vietnam's exports to the UK have grown by an average of 9.4%/year.

“This is a much higher growth rate than the general growth rate of Vietnam’s exports or the total two-way trade turnover of Vietnam to the EU or to Europe in general in the first 9 months of the year,” said Mr. Thanh, adding that currently, pepper, shelled cashew nuts, footwear, coffee, etc. are important export items, leading the UK market segment.

The second impact is to help increase the export of some British products to Vietnam, especially products with very high scientific and technological content such as: machinery products, automobiles, basic chemicals, medical products, and pharmaceuticals.

Third, the impact on investment attraction. Over the past 3 years, the total number of UK registered projects in Vietnam has increased by more than 1.5 times from 380 projects at the end of 2020 to 584 projects after the first 9 months of 2024 with a total capital of 4.5 billion USD. UK investment projects in Vietnam cover many important fields from processing and manufacturing industry, financial services, banking, renewable energy, healthcare, pharmaceuticals, etc.

The fourth, positive institutional impact helps Vietnam reform institutions in many areas of trade, investment and sustainable development, public procurement, commercial services, etc.

The fifth impact helps businesses make good use of incentives from the agreement. Currently, the rate of utilizing preferential C/O according to the form of this agreement is currently at over 30%, meaning that it has grown steadily over the years, as well as a significant number of Vietnamese businesses have matured a lot in accessing the market, bringing Vietnamese goods to the UK market, meeting increasingly high standards of green consumption, sustainable development, improving the responsibility of producers as well as participating in the supply chain, thereby being able to take advantage of the long-term benefits of this agreement in the coming time.

Although exports to the UK market are growing positively, the market share of Vietnamese goods in the UK market is still very small, only about 1% of the total import volume into the UK.

Pointing out this reality, Mr. Nguyen Canh Cuong - Former Counselor of the Ministry of Foreign Affairs in the UK - said that Vietnamese businesses are increasingly dynamic, especially young businesses, with new skills in digital technology, marketing on digital-based platforms, helping to find information faster and more than traditional methods.

However, not all businesses have achieved the same level and efficiency as those that have grown their exports to the UK. Many businesses have not been proactive in researching and seeking market information, including the most basic information. Some Vietnamese businesses have good products but do not have a method to approach the market.

Our market share of goods is still very small, only about 1% of total imports into the UK.

“Vietnamese businesses are still limited in searching for and analyzing information. Meanwhile, free information sources about British businesses are available on companieshouse.gov.uk ” - Mr. Nguyen Canh Cuong pointed out and added that he had witnessed Vietnamese businesses working with a partner for ten years "smooth sailing". When trusting a partner to deliver first, pay later, and the partner is about to go bankrupt, the business puts itself in a very high-risk situation.

Therefore, according to Mr. Cuong, we should not take lightly the matter of checking the financial status of partners, including traditional partners.

Thorough market research

Giving recommendations to Vietnamese enterprises when exporting and doing business in the UK market, Mr. Vu Viet Thanh said that enterprises need to look up and thoroughly research information about the market; need to strictly control the entire production process, ensure traceability, ensure food hygiene and safety...

At the same time, enterprises also need to increase the application of science and technology, develop production systems, deep processing, optimize production cycles to increase the competitiveness of goods; at the same time, promote the linkage of production chains, supply chains from production to consumption, export and research, seek development partners to attract investment from British enterprises into the specific production lines of enterprises...

In the future, Vietnam and the UK will both be members of the CPTPP, opening up new development space, especially in some areas. Therefore, the domestic export business community needs to promote linkages in production and supply chains from production to consumption and export. In addition, research and seek development partners to attract investment from British businesses into their specific production chains, thereby taking advantage of the capital and technology of partners.

Mr. Nguyen Canh Cuong said that, first of all , businesses must strictly comply with the standardization of the import market. This is a prerequisite for British businesses when they want to learn about new products.

Second, businesses must grasp the trend of sustainable consumption, environmental friendliness, emission reduction... along with other regulations of the UK market. Vietnamese suppliers and exporters must be aware of these regulations to produce products that meet the requirements and consumer tastes of the market.

Third, there is a need for transparency in the supply chain and the ability to trace product origins using digital tools. When exporting products to the UK, Vietnamese businesses must ensure traceability of their origins, from input materials to production and packaging processes... businesses must understand and provide information to UK importers.

There is still a lot of room for Vietnamese goods to increase exports to the UK market. However, Vietnamese businesses need to focus more on building their brand and reputation.

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