Japanese market wide open to local businesses

The Vietnam-Japan Economic Partnership Agreement (VJEPA) proves that the Japanese market is open wide to Vietnamese businesses, a conference heard yesterday.

Under the VJEPA, which took effect in October 2009, Vietnam has enjoyed a trade surplus with Japan during the last two years, while many Vietnamese producers have grabbed the chance to boost their growth in this strict market.

The statement was made at the joint conference held yesterday by the Ho Chi Minh City Department of Industry and Trade and the HCMC Institute for Development Studies to evaluate the impacts of the VJEPA on the country’s economy.

Speaking at the conference, Bui Huy Son, head of the Ministry of Industry and Trade’s Asia – Pacific Agency, said Vietnam has enjoyed a trade surplus worth $150 million to Japan in the first ten months of this year.

“Imports stood at $8.4 billion while exports reaped $8.54 billion,” he said.

For his part, Huynh Khanh Hiep, deputy director of the municipal Department of Industry and Trade, said that after the economic slowdown in 2009, the city’s export turnover to Japan recovered in 2010 with a 21.5-percent rise, topping US$1.81 billion.

Hiep said Japan remains the city’s second largest exporting market after the US.
Textiles and garments topped the list of export staples by earnings, which brought home $445.8 million last year, he added.

Meanwhile, Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Processors, said seafood also accounted for a large proportion in the country’s exports to Japan.

Hoe said Vietnam has shipped a total of 748,122 tons of seafood worth $4.9 billion to Japan in the year to October -- a 3.9-percent rise in volume and a 23.6-percent increase in value over the same period last year.

“Seafood export turnover to Japan is expected to reach a record $6 billion this year,” he said, adding that Vietnamese frozen shrimp exports to Japan were worth $1.7 billion, making Vietnam one of the three largest exporters to Japan.

Tadashi Kikuchi, economic attaché to the Japanese Consulate General in HCMC, said the two countries’ bilateral trade revenue this year has experienced a 20 percent year-on-year increase.

“Vietnamese exports to Japan will continue rising in years to come,” he said.

How to grow in Japanese market

Kikuchi said that, in order to further exploit the Japanese market, Vietnamese businesses have to develop long-run strategies, and to build and maintain long-term contacts with Japanese partners.

“Exporters should also increase their market research in Japan to study the Japanese business culture,” he advised.

Mai Dinh Kiem, director of Saigon Carpet Co, said local businesses had to have good knowledge of Japan’s contemporary popular product designs to enter and grow in the market.

“[Businesses] should also embed Vietnamese cultural values in their products,” Kiem said, adding that the products must be clean and environmental-friendly.

Nguyen Thoai Hong, deputy CEO of Vinh Khanh Cable Plastic Co, stated that keeping promises is the most crucial factor in doing business with Japanese partners.

Thus, he advised, Vietnamese should keep their word even when they may incur losses due to unexpected incidents.

Hong said there were cases when his company failed to manufacture the products on time due to a power shortage.

“To ensure the delivery time as contracted with the Japanese partners, we had to export the products via airlines instead of shipping, even though this increased expenses,” he said.

Sonof the Asia – Pacific Agency said Japanese importers also set many high requirements regarding environmental-friendliness, manufacturing facilities, and production ability.

“Thus, Vietnamese businesses have to put forth a serious effort to enter and develop in this market,” he concluded.