- Pricing is complex and contradictory. Sometimes retail prices and import prices differ greatly, and sometimes they are very close, depending on the cost structure in the home country.
- Customers often ask to be exclusive agents because they are afraid that the company or corporation has many other customers.
2.3. Current status of Vietnamese handicraft exports to the United States in recent times
2.3.1.Export turnover of Vietnamese handicrafts to the United Statesin recent years
The United States is the most important market among the three main target markets of Vietnamese handicrafts in the current period as determined by the Ministry of Trade.
In recent years, the United States has a demand for importing about 13 billion USD/year of handicrafts. In 2005, Vietnam's handicraft exports to the United States reached 195 million USD, accounting for 1.5% of the country's import turnover. In 2006, Vietnam exported about 276.4 million USD of handicrafts to the US market, of which 36.8 million USD were ceramics, an increase of 27.6% compared to 2005 and 7 times higher than in 2001. The Ministry of Commerce aims to increase the proportion of Vietnamese handicrafts imported into the United States to 3% by 2010 (reaching a turnover of over 0.4 billion USD).
Table 3.
Export turnover of Vietnamese handicrafts to the United States in recent years
Unit: Million USD
2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |
KNXK in USA | 60.70 | 61.45 | 90.63 | 97.07 | 125.20 | 195.00 | 276.40 |
Total export turnover row TCMN | 235.00 | 235.00 | 331.00 | 367.00 | 410.00 | 560.00 | 630.40 |
Proportion (%) | 25.83 | 26.15 | 27.38 | 26.45 | 30.54 | 34.82 | 43.85 |
Maybe you are interested!
-
Current Status of Credit Quality at Vietnamese Joint Stock Commercial Banks -
Current Status of Foreign Currency Business Development in the International Market of Vietnamese Commercial Banks -
Current Status of Factoring Services at Vietnamese Commercial Banks -
Current Status of Direct Negotiation Activities Between Vietnamese Enterprises and Japanese Partners -
Current Status of Industrial Property Protection Activities for Trade Secrets in Vietnam
(Source: General Statistics Office of Vietnam)
Table 4.
Export turnover of some main Vietnamese handicraft products to the United States over the years
Unit: 1000 USD
Face
row
2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |
Ceramic | 3,744 | 5,579 | 11,015 | 15,826 | 21,510 | 28,204 | 36,800 |
Bamboo and rattan, sedge | 1,686 | 2,426 | 4.126 | 9,882 | 23,615 | 21,479 | 27,756 |
Lacquer art | 515 | 1,047 | 4,277 | 7,889 | 9,217 | 13,524 | |
Row embroidery | 278 | 5.008 | 13,150 | 27,658 | 25,798 | 30,478 |
(Source: General Statistics Office of Vietnam)
Among the above items, ceramic products achieved the largest turnover, followed by rattan, bamboo and sedge products.
The growth rate of ceramic turnover over the years respectively reached: 49.0%, 97.4%, 43.68%, 35.9%, 31.1%, 30.5. Of which, the ceramic turnover in 2006 increased nearly 10 times compared to 2000 and 7 times compared to 2001.
The growth rates of rattan, bamboo and sedge export turnover over the years were respectively: 43.9%, 70%, 139.5%, 138.9%, -9.1%, 29.2%. Of which, the rattan, bamboo and sedge export turnover in 2006 increased 16.5 times compared to 2000 and 11.4 times compared to 2001.
Table 5.
Comparison of export turnover of some Vietnamese handicraft products exported to the United States and Japan over the years
Unit: 1,000 USD
Item
2003 | 2004 | 2005 | 2006 | |||||
Flower Period | Japan Copy | Flower Period | Japan Copy | Flower Period | Japan Copy | Flower Period | Japan Copy | |
Ceramic porcelain | 15,826 | 9,672 | 21,510 | 7,925 | 28,204 | 20,120 | 36,800 | 30,800 |
Cloud bamboo, sedge | 9,882 | 2,875 | 2.3615 | 16,700 | 21,479 | 16,417 | 27,756 | 23,854 |
Lacquer, fine turmeric | 4,277 | 6,924 | 7,889 | 12,750 | 9,217 | 11,587 | 13,524 | 16,594 |
Row embroidery | 13,150 | 22,547 | 27,658 | 27,570 | 25,798 | 26,209 | 30,478 | 32,107 |
(Source: General Statistics Office of Vietnam)
According to the above table, the export turnover of two products, ceramics and bamboo and rattan, sedge, and leaf sedge, to the United States is often higher than the export turnover to Japan. For ceramics, the highest was in 2004, the export turnover of ceramics to the United States was 2.71 times higher than that to Japan, the lowest was 1.19 times in 2006. For bamboo and rattan, sedge, the highest was in 2003, the export turnover to the United States was 3.44 times higher than that to Japan, and the lowest was 1.16 times in 2006.
The export turnover of lacquerware, handicrafts and embroidery to Japan is often higher than that to the United States. For lacquerware and handicrafts, the export turnover to Japan was 1.62 times that to the United States in 2003 and 2004, and this ratio was smallest at 1.23 times in 2006. The export turnover of embroidery from Vietnam to Japan is not much larger than that to the United States, and in 2004, the import turnover of embroidery from Vietnam to the United States was even larger than that of Japan.
2.3.2. Assessment of the current situation of exporting Vietnamese handicrafts toUSA
According to the Department of American Markets (Ministry of Commerce), garden ceramics and decorative ceramics such as plant pots, statues, animal figures, fountains, clock cases, etc. are products in high and growing demand in the US market. Meanwhile, other handicraft products face many difficulties in penetrating this market.
US import orders are often large because this is a large market and the cost of doing business is very expensive, so only by doing big business can one survive. Meanwhile, Vietnam's handicraft production is still small and fragmented, the production facilities are often small LLCs, cooperatives and mainly households, so it is very difficult to meet orders in terms of quantity and ensure fast delivery time.
In addition, the inherently weak cooperation between enterprises is also a significant obstacle to linking production and sharing export orders.
Furthermore, the production scale is small and production is mainly done by manual methods, so the quality of goods is difficult to be consistent.
Besides, Vietnamese handicrafts have not been diversified in design, and have not paid attention to market research and creating designs suitable for each market, but mainly rely on buyers' designs or available traditional designs.
On the other hand, many handicraft producers emphasize the ethnic or cultural characteristics of their products. But these characteristics, which are valuable to one nation or culture, have no meaning to another nation or culture.
In order for the US market to be a potential market for this product, and for Vietnamese products to be competitive in the world, handicraft producers should study the artistic values and cultural characteristics of ethnic groups living in the US to incorporate them into products exported to this market, and not impose their own cultural values on products sold to the US.
For outdoor and indoor ceramics such as flower pots, statues, animal figures, fountains, watch cases, etc., although they are competitive, it is still necessary to pay attention to improving packaging and transportation to reduce transportation costs from Vietnam to the United States as well as within the United States. On the other hand, it is also necessary to pay attention to improving designs, especially colors, to suit the tastes in the United States.
For products made from rattan, bamboo, leaves, embroidery and gifts, Vietnamese businesses cannot compete with Chinese goods unless they create products with unique and sophisticated designs, consumed through their own distribution channels.
Since China does not export many lacquerware products, this is an area where Vietnam can penetrate the US market, but must have designs suitable for the market.
Because China has been dominating the market and because of Vietnam's production characteristics as analyzed above, the main direction of penetration into the US market of Vietnamese goods is
The future of Vietnamese handicrafts is to shift to producing sophisticated items with unique designs suitable for the market, in moderate quantities to enter niche markets in the United States. Although traditional Asian and Chinese designs can still be sold in the US market, they are generally not a strong consumer trend today.
Vietnamese businesses need to research and establish strategic business relationships with US partners who are capable of designing and consuming products and are looking for overseas manufacturing partners. In addition, market research or participation in handicraft and gift fairs in the US should be aimed at finding partners. The purpose of participating in fairs is to introduce production capabilities rather than to introduce designs for customers to choose and sign contracts. At the same time, businesses should also adjust which fairs to participate in and what to display to suit the purpose of participation.
II. CURRENT STATUS OF USING TRADE INTERMEDIARIES IN EXPORTING VIETNAMESE HANDICRAFT PRODUCTS TO THE US MARKET IN THE PAST
1. The situation of using trade intermediaries in exporting Vietnamese handicrafts to the United States
1.1. General assessment
During the period when the state implemented a foreign trade monopoly policy, commercial intermediaries had no place to operate, but since the 1979-1980 border war, especially after 1986, commercial activities in Vietnam have been expanded. After completing the export delivery target, enterprises can entrust exports to earn foreign currency, entrust imports to solve their own difficulties. To regulate the activities of intermediaries in the import-export business sector, the Government has issued the following decrees:
- Decree 114/HDBT, dated April 7, 1992 on State management of import and export activities with 6 chapters and 29 articles, of which Article 1 regulates the activities of entrusting and accepting entrustment of import and export.
- Decree 33/CP, dated April 19, 1994 on State management of import and export activities. This Decree has further completed the regulations related to import and export, in which the Government stipulates that the Ministry of Trade shall issue the Regulations on entrusting and accepting entrustment of import and export of goods for domestic and foreign enterprises.
- Decree 25/CP, dated April 25, 1996 on Regulations on goods trading agents with 5 chapters and 26 articles.
- The Commercial Law was issued on May 23, 1997 and took effect from January 1, 1998, legalizing the scope of regulation of commercial service activities associated with the purchase and sale of goods and the circulation of goods such as: representing traders, brokers, agents for the purchase and sale of goods... To guide the implementation of the Commercial Law, the Government issued Decree 57/1998/ND-CP on July 31, 1998. Thus, the first
For the first time in Vietnam, the activities of intermediaries in the commercial field have been regulated in a law.
- To meet the requirements of international business, the new Commercial Law was passed by the National Assembly in June 2005. In the new Commercial Law, the scope of regulation has been expanded to other areas such as transportation, insurance, etc.
- Decree 79/2005/ND-CP, dated June 16, 2005, regulating the conditions for registration and operation of customs clearance agents.
In the handicraft industry, production establishments hardly participate in direct export but only play the role of supplying goods and signing domestic contracts with export businesses. These businesses only export products to importers in the final market and do not distribute to foreign consumers through their own agency system in the host country. Therefore, most businesses operating in the export sector of Vietnam (100% domestic capital) do not directly hold and regulate the distribution channel of export goods in countries around the world.
1.2. Using brokers in handicraft export business
In the export of handicrafts to the US market, brokers participate in both the purchase and sale of handicrafts between domestic enterprises and the signing and implementation of export contracts.
Brokers are the bridge between some export trading companies and production facilities. Brokers have relationships with many production facilities of a certain product. Due to the resource conditions as well as the time of handicraft export trading enterprises, in some cases, signing contracts with production facilities must go through brokers. The price of goods is not always more expensive than signing a direct contract, because the relationship with brokers and production facilities is very good. Meanwhile, signing contracts