Current Status of Export Development of Handicraft Products in Thanh Hoa Province.

2.2.2. Current status of handicraft export development in Thanh Hoa province.

In recent years, Thanh Hoa province has had many mechanisms and policies to support the development of traditional craft villages, in order to maintain and solve jobs for rural workers, such as: The provincial budget has supported tens of billions of VND for industrial promotion activities; support for craft villages, small-scale craft villages... At the same time, the organization has honored dozens of skilled artisans in craft villages, to commend those with extensive experience, heart, mind, and creativity, contributing significantly to promoting the development of craft villages.

Some occupations are currently developing strongly, such as: Bronze casting, bamboo and rattan weaving, agricultural and food processing, household wood processing, handicrafts, small mechanics serving agriculture, construction materials production, seafood processing... In the first 8 months of 2020, the total revenue of craft villages reached more than 10,000 billion VND. However, in the development process, craft villages still have some limitations, such as: Dispersed production, small scale, environmental pollution. Investment, innovation and application of science and technology in production still face many difficulties. In some craft villages, up to now, the infrastructure system of transportation, electricity, water supply and drainage systems, production areas... are still narrow and not synchronized. The situation of environmental pollution in craft villages

craft villages still occur but have not been handled according to regulations, affecting the lives of many households. Most products in traditional craft villages do not have a brand, while advertising, introducing products, and promoting trade have not received due attention. Most workers in craft villages do not have basic training, so it is difficult to absorb new technology, industrial production style, and awareness of professional activities.

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Identifying handicraft villages as the driving force for economic development and changing the face of rural areas, the Center for Industrial Promotion and Energy Saving has effectively implemented the industrial promotion policies of the central and local governments, supporting craft villages, production facilities, and artisans to maintain and develop occupations and craft villages. Many traditional handicraft village projects have been implemented in Thanh Hoa such as: Quang Xuong; Nga Son; Thanh Hoa City; Dong Son; Tho Xuan; Thieu Hoa... have expanded their production scale in the direction of companies and enterprises attracting many workers in the region and surrounding areas.

approach. Direct communes and towns to pay attention to building brands for craft village products to increase the competitiveness of products in the market. Strengthen propaganda to raise people's awareness of the importance of preserving and developing craft villages. Develop implementation plans for each year and each stage. Timely detect and overcome limitations and obstacles in implementation. At the same time, focus on training

Vocational training through the form of vocational training and propagation, with a mechanism to encourage experts, artisans, and skilled workers from within and outside the locality to participate in vocational training.

Thanh Hoa province participates in exporting to many countries and territories. Among them, there are traditional export markets such as ASEAN countries, China, Korea, India, Japan, Taiwan... and some new, potential markets such as the US and EU countries. To overcome difficulties, stabilize production, ensure jobs for workers and contribute to completing the export plan of the whole province, export enterprises in the province have made efforts in connecting, searching for markets, and converting production models to suit market demand.

To continue to maintain high growth momentum, the province and relevant levels and sectors continue to implement a number of key solutions such as: Resolutely reforming administrative procedures, creating the best investment and business environment, supporting businesses when accessing capital sources from financial institutions and banks to implement investment projects in the province. Timely removing difficulties and obstacles in the process of investing, building and registering new export products. Strengthening propaganda and training on signed free trade agreements to equip businesses with knowledge to participate in the international trade market. Guiding businesses to make the most of the advantages of multilateral and bilateral trade agreements to have a roadmap to prepare and implement direct export of goods to bring higher economic efficiency.

In addition, Thanh Hoa province has supported the handicraft industry to improve its design capacity, develop products and participate in international specialized fairs and exhibitions. Through participating in fairs, not only does it help Vietnamese handicraft enterprises promote their brands and products, but it also helps enterprises directly observe, learn, and grasp trends in colors, materials and ideas in both design and architecture. This helps enterprises have the right direction in product development as well as when trading and contacting partners to further promote opportunities for cooperation in exporting goods.

Since 2005, Thanh Hoa province has allocated scientific career capital to support research activities and application of science and technology in the production of handicrafts such as:

- Project of producing lacquer handicrafts for export using rolled bamboo by Tien Son Company Limited.

- Project to restore and develop brocade weaving for ethnic minorities in mountainous areas.

- The project of applying traditional industrial techniques to produce handicraft products from sedge to build a model of a craft village in Quang Hung commune, Thanh Hoa city, implemented by the People's Committee of Thanh Hoa city.

Thanh Hoa also has many export incentive policies such as:

- Bonus for exceeding the export growth plan: Enterprises that complete the annual plan authorized by the Thanh Hoa Department of Trade and the Chairman of the Provincial People's Committee and achieve an export value growth rate of 20% or more compared to the previous year will be rewarded 1% of the growth value.

- Rewards to encourage exporting new products and new markets

- Export rewards for goods in the list of special export encouraged items.

- Support capital for export development business.

- Support training costs, production and business of export goods

To implement the mentioned policies and measures, in recent times our province has synchronously deployed solutions to promote the export of handicraft products:

- On the state side: Continuously innovate mechanisms and policies to suit the actual situation, along with reforming administrative procedures and improving the quality of administrative services to promote trade facilitation; promote trade promotion and market information; ...

- On the association's side: strengthen activities to promote the province's handicraft products, perform well the function of bridging between enterprises and state management agencies at all levels and create conditions for association and solidarity among association members to increase the production and business efficiency of each enterprise.

- On the business side: arrange and reorganize production facilities and businesses exporting handicrafts. Implement well the work of business development, focus on reviewing and consolidating a number of businesses with production traditions,

Processing and trading handicrafts for export is facing difficulties. We must know how to identify the strategy of key export products and markets for handicrafts, identify traditional markets and new markets. Implement solutions.

improve competitiveness, quality and efficiency of resource use

human resources, organizing and arranging production and business processes, accessing and applying advanced management models. Exploiting the benefits of technology in the production process and exploiting market information, valuing the connection between producers, suppliers of input materials with businesses in purchasing and supplying raw materials for handicraft production.

2.3 Factors affecting the export of handicraft products.

2.3.1. Domestic factors

TCMN product quality

The basic characteristic of handicraft products is to serve the direct consumption needs of people in the importing country. Therefore, quality standards are often very strict, products are only allowed to be imported when they are determined to meet quality standards. For Thanh Hoa, the ability to meet market requirements is still limited, due to the fact that most businesses and production facilities are small and medium-sized, with low investment capital and low connectivity, so it is difficult to meet large orders.

A common problem in handicraft villages today is that products made to order by customers often have uneven quality because production is mainly mobilized from households, designs, models, and packaging are slow to innovate, so products lack competitiveness (monotonous designs, most handicraft products today are still produced based on orders from buyers, mostly similar to similar products of other local establishments in both color and design). This is one of the main reasons why foreign importers hesitate when placing orders at handicraft villages.

Consumer price

Because Thanh Hoa's current export enterprises are not yet capable of organizing product distribution and consumption activities in importing countries, they often sell through the distribution system of foreign intermediary customers. In this case, the price factor proves to be a strong competitive factor in convincing intermediary customers to consume products for their enterprises. Enterprises in the province often do not have the ability to invest in equipment to monitor some manual stages, reduce material loss, have to rent factories, high transportation costs, production is often dispersed to small households, so high intermediary costs have increased product prices, affecting

to the competition of the province's handicraft products in the market, reducing the efficiency of export activities.

Distribution channel system

The province's handicraft business network is mostly small and scattered, many establishments do not have the conditions to participate in direct export, the technical infrastructure is rudimentary, and the goods for sale are often consigned to agents in other countries. Originating from the province's handicraft production facilities being small and fragmented, the distribution system has not received much attention. This makes it difficult for customers to access the province's handicraft products and reduces the province's export capacity of handicraft products.

Production scale

Participating in the production and export of handicrafts in Thanh Hoa province include economic sectors: state-owned, joint-stock, private enterprises, limited liability companies, cooperatives and handicraft export villages. Currently, in Thanh Hoa province, there are about 100 enterprises producing and trading handicrafts and 67 handicraft villages still in operation.

Most of these units are small and medium enterprises, with little capital, not many workers, poor equipment and facilities, limited production space, mainly manual labor, low product quality, small revenue, and difficulty in capturing the market. Only a few units have invested in machinery and equipment to produce handicrafts, such as Tu Thanh Limited Company, Tien Son Limited Company... All of these factors affect the export value of the province.

Trade promotion activities

Trade promotion, advertising and product introduction activities as well as penetrating, approaching and consolidating the export market of Thanh Hoa's handicrafts are currently considered one of the weak links in marketing of enterprises and handicraft villages in Thanh Hoa. Thanh Hoa enterprises do not have the financial capacity to attend large handicraft fairs abroad, so they do not have information about the market situation and prices, and are often confused in implementing production and exporting handicrafts.

In addition, trademark registration, promotion of name protection, and origin of goods are only carried out on a very small number of products, even for products with registered trademarks. Due to lack of management, many other manufacturing establishments have taken advantage of the registered trademarks to produce products that do not ensure quality, affecting the reputation of the brand.

2.3.2. foreign factors

International market situation

The handicraft export market is not a large market but is very strict in terms of quality and delivery progress. Currently, many countries in the world are in recession, the economy is facing many difficulties, leading to the import turnover of handicraft products of the province only increasing slightly, the export volume to some markets is significantly reduced. Especially the economy of EU countries is in crisis, many countries have to tighten spending, the living standards of people in these countries are reduced, unemployment is increasing. Therefore, the demand for handicraft products, especially sophisticated and high-value products, is decreasing, leading to many difficulties in the export turnover of handicraft products of the province.

Competitors

Currently in the market, competitors in the TCMN sector are quite strong, especially products from China and Thailand. China has the ability to mass produce at prices much lower than competitors, with extremely rich designs and models; Thailand has the ability to meet diverse customer tastes, meet international standards and have specific characteristics in the global market. In addition, there are a number of other competitors from countries in the region and around the world that are gradually becoming strong competitors of TCMN products in our country in general and Thanh Hoa in particular. That at the same time requires businesses in the province to improve product quality, create product differentiation, and reduce costs in order to survive.

Barriers in international trade

To protect domestic production, countries often use a system of tools to limit the penetration of foreign goods, such tools can be tariffs, quotas or technical standards... The system of barriers related to tariffs and quotas will gradually be removed in the process of international economic integration, but at present, this is still a major obstacle for enterprises producing and trading handicraft products. Some other countries use barriers such as strict technical standards such as materials, environmental hygiene issues, designs... When the handicraft export market is still limited, these trade barriers really become a big problem.

2.4 General assessment of handicraft export of Thanh Hoa province

2.4.1. Achievements

Although the export turnover of handicrafts of the province in recent times is not too large, the quantity has increased steadily, each year is higher than the previous year in terms of volume, value of goods and structure of export items.

The export market has been expanded. The export market used to be mainly Eastern European countries, but now it has been exported to many potential markets such as Japan, Korea, the US, etc. The export products used to be concentrated on a few items such as embroidery, jute, and sedge, but now many new products have been developed such as bamboo, lacquer, rattan and bamboo handicrafts, etc. The above results have been achieved because enterprises and craft villages have been proactive, active, and flexible in researching the market, innovating, and perfecting business management.

Production and export of handicrafts have created many jobs for workers, contributing positively to the use of farmers' leisure time.

Trade promotion, creating a stable market, exploiting the market in three dimensions: breadth and depth. Contributing to building a positive image of Thanh Hoa province in the domestic and international markets, continuing to maintain traditional markets while expanding new markets and potential markets.

2.5.2. Limitations and causes.

a. Limitations

Thanh Hoa's export products are not yet diverse, but only focus on a few items. This has unintentionally limited the province's export capacity.

Although the turnover and volume of handicraft products have grown, compared to other products, they are still small and compared to the value of gold and export of handicraft products of the whole country, Thanh Hoa's handicraft products account for a low proportion.

Small production scale, unstable and uneven product quality, monotonous designs that are difficult to attract customers and have high competitiveness in the export market.

Enterprises and craft villages are not yet proactive in terms of raw materials for handicraft production. The products are more expensive than those in other provinces and are also competing with products from countries in the region such as Thailand, China, etc., making it difficult to compete in the international market.

b. Causes of limitations.

The limitations in the export of handicrafts of Thanh Hoa province are mainly due to the following reasons:

Firstly, there is a lack of strategy, planning, and development plans for production and export of handicrafts, and a lack of appropriate credit policies for enterprises producing and exporting handicrafts. Training activities are only for individual households, and there is no organization or planning for vocational training on a province-wide scale.

Second, the province's incentive and support measures for the production and export of handicrafts are still limited and not commensurate with the needs of consumers and exporters. Producers still lack information about the market and customers.

Third, Thanh Hoa has not yet built a large handicraft center that can attract customers. Product introduction is mainly passive and small-scale.

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