Monday, 18 Dec 2017

Taking advantage of local distributors to infiltrate EU market

Updated at Saturday, 18 Nov 2017, 16:00
The Hanoitimes - In order for the Vietnam leather and footwear industry to infiltrate EU market, enterprises must have specific plans and strategies.
EU currently is the second biggest export markets of Vietnam leather and footwear industry, with trade value nearly 5 billion USD in 2016. In which, the export value of footwear products was 4.1 billion USD. As the EVFTA is expected to be signed in 2018, it will open a new doors of opportunities for trade relation between Vietnam and EU. 
EU currently is the second biggest export markets of Vietnam leather and footwear industry.
EU currently is the second biggest export markets of Vietnam leather and footwear industry.
In addition to meet the requirements on rules of origins, Vietnamese enterprises must develop an efficient distribution network and understand EU’s safeguard measures. These are opinions of experts at the conference “Enhancing competitiveness for Vietnamese enterprises in leather and footwear industry expanding export to EU market” held under the collaboration of the European Trade Policy and Investment Support Project (MUTRAP) and the Vietnam Leather, Footwear and Handbag Association (LEFASO) on October 17 at Ho Chi Minh city.

According to experts, after the U.S withdrew from Trans Pacific Partnership (TPP), EU market has become the biggest expectation for Vietnam’s leather and footwear industry as the Vietnam – EU Free Trade Agreement (EVFTA) is expected to come into force in 2018. With regard to the opportunity of the Vietnam’s leather and footwear industry in EU market, Prof. Sangeeta Khorana of the EU-MUTRAP said, Vietnam has great advantages in EU market, especially in segment where requirements of customers are mainly of the quantity and design, instead of the brand. However, in order to infiltrate the EU market, enterprises must have strategy to focus on each specific market and take advantage of local distributors at these markets (through the connection with distributors to bring products to big super markets and retailers). Moreover, enterprises can open stores themselves to introduce products to customers, as well as to use e-commerce through internet and other safe transaction methods. 

Mrs. Sangeeta Khorana urged Vietnamese enterprises to understand technical barriers to trade (TBT), especially with regard to the limitation of toxic substances, regulations on safety and anti-dumping duties being applied in EU. 

As such, if Vietnamese enterprises do not understand anti-dumping regulation, there are a big risk that they will be out of the market. It is due to the fact that EU’s enterprises can initiate an anti-dumping case to the EU’s trade authority. If they see a sign of dumping or subsidiary, the European Commission will investigate whether this case will impact the local production. In the past, many EU’s enterprises had successfully proved the cases of foreign companies in dumping. 

For Vietnam, The European Commission has announced the continued expansion of anti-dumping measures (expired in the end of March 2011) for some Vietnam’s footwear products in 15 months since September 2016. AS such, not only for this products but also for others, Vietnamese enterprises have to understand clearly safeguard measures of EU to avoid being sued by EU’s companies. 

EU is a big market with 500 million customers and high level of income in the world. This is also one of Vietnam’s biggest export market in recent years. However, in reality, the Vietnam’s export value of 34 billion USD in 2016 to EU is equivalent to only 1.5% of the total import value of EU.
Nguyen Tung
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