Brand Vietnam makes Global Inroads; Exports Rise 88% in 4 Years
Brand Vietnam is steadily making its mark across the globe. The country’s export sector has been performing consistently well over the past several years. But the export data for the year 2019 reveals that the country has successfully scaled a new high in reaching out to the international market. Vietnam’s total export revenue for the year 2019 was US$304.3 billion. This represents an 87.8 percent increase in the four-year period from 2015-2019 and a 24.9 percent increase from 2018 to 2019. The resilience of Vietnam’s export sector during a period of global headwinds is a reason to cheer with a positive spillover effect for the rest of the economy.
Strengthening Demand for Vietnamese Exports
Commenting on the country’s strong export performance, Vinh Dang, the director of BM International Group, points out that the Vietnamese dong has depreciated by 6.2 percent against the US dollar since 2015. It further declined by 2% from 2018 to 2019. The decline in the value of the dong vis-à-vis the dollar has made Vietnamese goods cheaper in the international market. This has given a fillip to Vietnam’s export sector. The cheaper dong has strengthened demand for Vietnamese goods and helped the country to make inroads in the global market. Director Dang made these comments during a meeting with other experts held to discuss the country’s trade performance.
The Import & Export division of the BM International Group is involved in client/product sourcing, logistics & transportation, shipping, government & customs validation, quality assurance & checking. The company’s experienced logistics team, with their flawless coordination and critical knowledge of the sector, helps clients to efficiently deal with trade and shipping regulations.
Director Vinh Dang, along with other trade experts within Vietnam discussed at their quarterly business futures and impact meetings, agree that government reforms in industry, policy making and the trade sector have together created a synergy that has powered Vietnam’s export growth. An interesting statistic is that the export revenue of $304.3 billion in 2019 translates to roughly $3,200 for every resident. Vietnam has a population of 95.5 million people and booming exports will add to the economic prosperity of its citizens.
Breakdown & Analysis of Vietnam Export Performance
An area that needs more attention is the market spread for Vietnam’s exports. The final figures for the year 2018 indicate that around half of Vietnamese exports find their way to the Asian market. About 54 percent of Vietnam’s exports sailed to Asian shores. North America accounted for 22 percent of Vietnam’s exports, while 18.4 percent of the goods were shipped to Europe. Smaller percentages went to Latin America excluding Mexico but including the Caribbean (1.9%), Oceania led by Australia (1.8%) and Africa (1%). Trade experts, including Director Vinh Dang, discussed existing markets for Vietnam’s exports. The emphasis should now be on aggressively pursuing new markets and ways to achieve this objective.
Top 10 Performing Vietnamese Export Markets
The data in the table below indicates that the country’s top-10 exports accounted for over three-quarters (76.9%) of the overall value of its global shipments.
Vietnam’s Top 10 Exports
|Items||Export Value ($bn)||% Share In Total Exports|
|Clothing / Accessories (not knit/ crochet)||16.9||5.5|
|Machinery (inc computers)||16.7||5.5|
|Knit/Crochet Clothing & Accessories||16.1||5.3|
|Optical, technical, medical apparatus||5.8||1.9|
|Leather / animal gut articles||4.6||1.5|
|Plastic / plastic articles||4.5||1.5|
Growth Segments In The Vietnam Export Market
While electric machinery and equipment accounted for a substantial 41.7 percent of export shares, the fastest growing exports in the year 2019 was in the furniture, bedding, lighting, signs and prefabricated buildings segment. Exports in this area grew by an impressive 66.3 percent in the course of one year (2018 to 2019). The second and third fastest growth was seen in foot wear and electric machinery & equipment. While the exports of Vietnamese footwear grew by 47 percent from 2018-2019, electrical machinery & equipment increased by 46.5 percent. Experts feel that this represents a very encouraging trend. Even as electrical machinery & equipment retains its top position, the hectic pace of export growth in other sectors indicates the buoyancy in economic activity. The fact that footwear and furniture (et al) manufacturers are orientating themselves towards generating greater export revenue also spells good news for the Vietnamese economy.
A closer and more detailed breakdown of the various items mentioned in the table above indicates that Vietnamese phones are making rapid strides in capturing the world market. Phone system devices including smartphones are Vietnam’s most valuable exported product, accounting for 20.7 percent of the country’s total export value. This is followed, in descending order, by integrated circuits or micro assemblies (8.6%) trailed by textile footwear (3.9%), TV, radio or radar device parts (3%), leather footwear (2.4%), miscellaneous furniture (2.4%), insulated wire or cable (1.7%), printing machinery (1.5%), knitted or crocheted jerseys and pullovers (1.5%) then rubber or plastic footwear (also 1.5%). The worst among the top 10 performers was optical, technical and medical apparatus. The declining global demand for Vietnam’s optical, technical and medical apparatus is reflected in the 25.2 percent drop year over year.
Director Vinh Dang and other experts said that policies aimed at encouraging the growth segments like footwear, phones and furniture will help to further improve the country’s export performance.
Competitive Advantages In The Global Market
The country had a total trade surplus of $41 billion in the year 2019. This represents a massive 500 percent increase over the 2018* trade surplus of $6.8 billion of which $11.2 was with the US. Further analysis of the trade data indicates that the greatest trade surplus was reported in the electrical machinery/equipment segment. The country’s net exports of electrical machinery/equipment touched $49.1 billion in 2019, underlining Vietnam’s competitive advantage in this segment.
Vietnam’s export sector has performed exceedingly well in the year 2019 with the boom in export revenues resulting in a four-year high trade surplus. The US retains its position as Vietnam’s largest export market. Director Vinh Dang points out that the country’s export performance is noteworthy as it has happened in the backdrop of a global downturn. With the right policy focus, the country’s export sector can give additional thrust to Vietnam’s growth momentum. If you are considering moving your manufacturing operations to Vietnam, now would be the time before saturation or potential policy changes. If you would like to discuss your options, contact our excellent dedicated import and export team.