Incentra Extending Vietnam-Russia Trade Bridge

What do you think about the status of previous Vietnam-Soviet cooperation and current Vietnam-Russia ties?
Vietnam and the former Soviet Union established a relationship in 1950. The support and assistance of the Soviet Union contributed significantly to the success of the cause of national liberation, reunification and construction of Vietnam and laid the solid foundation for Vietnam-Russia relations today. The two countries agreed to build the strategic partnership and the comprehensive cooperation in all fields of politics, military science and technology, economics, commerce, culture, education and many other fields to meet practical interests of both parties. In economic cooperation, Russia is a traditional market of Vietnam but its export value to Russia is still low. In 2016, its export turnover was just over US$1.5 billion. Given Russia’s double population size to Vietnam, its total import value of US$450 billion and its longstanding bilateral relationship, Vietnam’s export value to this potential market is very small.

 

Could you please tell us some remarkable activities of the Hanoi-Moscow Complex?
In the past time, acting as a focal point, Incentra is the rendezvous for over 100 trade promotion conferences, including many international events. From here, more and more Russian businesses get increasingly interested in developing and distributing Vietnamese products. In 2015, the “Moscow High-quality Vietnamese Goods Expo and Sale” at the Hanoi-Moscow Complex was a huge success with many records: For the first time, 163 Vietnamese enterprises attended an overseas trade fair; within one month, 120 tonnes of Vietnamese products were exported to Russia; more than 10 large-scale workshops and symposiums for Russian businesses provided an opportunity for Russian companies to initiate contacts, transact and experience the quality of Vietnamese goods. In 2016, Hanoi Goods Week Fair and Ho Chi Minh City Goods Week Fair in Moscow were held in September and October. The two weeks of fairs witnessed nearly 200 tonnes of Vietnamese goods sold to Russian businesses and consumers. The volume of Vietnamese goods imported into Russia via trade fairs in 2016 increased dramatically over 2015. This clearly showed the effectiveness of trade promotion activities at the Hanoi-Moscow Complex.

 

From your experience, what do Vietnamese companies need to pay attention to when penetrating the Russian market?
Currently, if Vietnamese companies want to successfully penetrate Russia, brand building is the first and most important step. Secondly, they must conduct market research and find out Russian tastes to determine the right market segments for their products. The shortest path to success is closely cooperating with the Vietnamese business community in Russia and utilising the important trade link: Hanoi-Moscow Complex because the complex brings together a number of effectively performing companies of Vietnam with their well-reputed, professional distribution systems throughout Russia. For example, Viethouse has successfully brought a lot of Vietnamese goods to Russian wholesale and retail systems.

Could you tell us more about opportunities and challenges facing Vietnamese goods in the Russian market after the Vietnam-Eurasian Economic Union (EAEU) takes effect?
The official enforcement of Vietnam-EAEU FTA opens up opportunities to access a market with a combined gross domestic product (GDP) of nearly US$2.2 trillion and 183 million consumers, while EAEU countries will have access to over 90 million people in Vietnam. Immediately after the pact enters into force, Vietnam's seafood, apparels, footwear and handbags enjoy a tax cut of nearly 90 per cent. Typical items include sports shoes, footwear made by natural leather, coconut milk, fresh coconut milk, copra, cashew nut, almond, walnut, shelled peanut, fresh/dried fruits, unroasted coffee, ceramic and porcelain sanitary wares, plastic household articles, bamboo products, men's and women's T-shirts, and most apparels. However, the pact also gives rise to numerous challenges. In fact, some are not ready to take advantage of this opportunity, leading to diminished investments.

The European market has the highest quality requirements in the world. Thus, to enter this market, companies must fulfil many quality inspection and quarantine procedures but some Vietnamese companies are reluctant to file for international quality certifications. This is a huge barrier. Therefore, they need to boldly invest, develop, expand the market and grasp the opportunity to confirm their position in the world market.

So, how will Incentra support the two countries' companies to seek business and trade opportunities when the FTA comes into effect?
The official enforcement of the FTA greatly facilitates Vietnamese businesses to expand their market to EAEU countries. Vietnamese companies need a trade centre to locate their representative offices or showrooms to introduce products directly to customers and rely on existing distribution networks run by Vietnamese people in the Russian Federation. The Hanoi-Moscow Complex is an ideal place for companies to set up their representative offices, showrooms, shops and offers solutions to bring Vietnamese goods to distribution systems in the Russian Federation and EAEU countries.

With the goal of being a bridge for trade and bringing Vietnamese goods to the Russian market, Incentra always creates favourable conditions, readily provides legal consultancy and information about Russian market and offer space rent exemptions for Vietnamese businesses.