Market View Videos:
Vietnam Video Transcript
Vietnam has emerged in the last four to five years as an area of great interest to Victorian producers. It's a dynamic market whose economy has been growing strongly.
“Food retail in Vietnam is just beginning to emerge. Vietnam's a country that’s a communist country, and it's very dependent on a traditional form of food marketing, so the so-called mom and pop store, the very small, very, very small family owned businesses have supplied food to the Vietnam economy and population for many years. But, even given this, it's still early days for modern retail in Vietnam, and probably only a 10 or 15 percent penetration, so 80 to 90 percent of the population still buy through wet markets and through traditional retailers.”
Food processing has been an important part of the Vietnam economy. Most people buy locally, and consume a very simple diet without manufactured products.
“Vietnam, being a tropical country, is not able to produce some of the important food ingredients that go into modern products, so dairy products, grains particularly, are used and they're not produced in those countries.”
Foodservice is another important sector in Vietnam. Affluent consumers are eating out more which supports the fast food, convenience and hotel restaurant sectors which are growing very quickly.
“The Vietnam economy and the Vietnamese companies don't really understand Victoria and Australia's capability that well. There are a lot of Vietnamese people that live in Australia, and that's providing opportunities because they're actually picking up products that can work in the Vietnam food sector, but even given that, they don't understand completely the opportunities that are in Victoria. That's point number one. Point number two, is that Vietnam recently joins the WTO, the World Trade Organisation, and that's again provided opportunities because now Vietnam is expected to comply with international trading agreements, and therefore open their markets, but even given that, it's taken a while for that to be completely introduced. Getting the product to the consumer is sometimes quite difficult because it's a fragmented and a non-transparent supply chain. So, the product may pass through three or four hands, before it finally gets to the consumer, and for a supplier in Victoria to understand what the market is and to understand the market needs, it's sometimes quite difficult to get to the consumer or the end user because there's so many people in the supply chain and the value chain.”
Major opportunities lie in commodity products as the food processing sector is growing very strongly. The deregulation of the Australian grains industry has opened opportunities for medium-size grain exporters to meet and do business with Vietnamese grain importers.
“Vietnam has, given its colonial background, a very strong history of baking, unlike most other South-East Asian markets. But, the other one from Victoria's point of view, is packaged products and fresh products. Victoria has a very strong capability in this area, and as the tourist numbers grow, and as local people have more money to spend, they're looking at more Western-style packaged products and fresh products, and I see big opportunities there, particularly in meat, and particularly in grocery for modern retail.”