Vietnamese businesses strive to export agricultural products to Thailand

Vietnam's export turnover to Thailand was reported to have reach 1.2 billion USD in the first 2 months of 2023. This is an increase of 12.4% over the same period in 2022.

Despite being a major agricultural products supplier worldwide, Thailand has considerable demand for imports of fresh fruits and vegetables. Thai consumers favor products such as seafood, vegetables, fruits, cashew nuts, coffee, pepper, and Vietnamese fresh fruits. On the other hand, Vietnam has many key products with a competitive advantage over that that of Thailand, such as lychee and dragon fruit. Many Thai businesses have imported Vietnamese dragon fruit and lychee to sell in large supermarket chains. In addition, Thai businesses import agricultural raw materials for processing, creating an excellent opportunity for Vietnamese businesses to export their agricultural products.

Furthermore, a convenient transportation system is established between Vietnam and Thailand owing to their close proximity. Active traffic routes such as the East-West economic corridor, the Southern economic corridor, etc. facilitate the transportation and storage of goods as well as cooperation in the development of logistics, and strategic partnership between Vietnam and Thailand.

With a wide variety of distribution channels, Thailand offers numerous options for Vietnamese products to reach Thai consumers. In addition, Vietnam, Thailand and other ASEAN countries have participated in many bilateral/multilateral trade agreements including the ASEAN Trade in Goods Agreement (ATIGA), Free Trade Agreements (FTAs) between ASEAN and partner countries. The most significant free trade agreement, the Regional Comprehensive Economic Partnership (RCEP), recently went into effect at the beginning of 2022. The RCEP agreement has helped removed the tariff barriers place on goods transporting between the countries, opening up numerous opportunities for import and export. Moreover, Vietnam and Thailand can cooperate in building supply chains, production chains and promoting exports to a third country.

However, the government must promptly establish methodical strategies for Vietnamese agricultural products and goods to reach Thailand, with special focus on products from small and medium businesses.

The Investment and Trade Promotion Center of Ho Chi Minh City (ITPC) coordinated with Central Retail Vietnam to organize a workshop on "Thailand's consumer trends and export standards in 2023" on April 5. Mr. Nguyen Tuan, Deputy Director of ITPC, remarked that Vietnam and Thailand share multiple similarities in terms of export goods structure, especially in the agricultural and aquacultural product groups. However, Vietnamese businesses have not fully studied the tastes, preferences and consumption habits of Thai consumers, so the processing and packaging stages have not met the needs of the Thai market for packaged and processed products.

Thailand has a varied system of distribution channels including traditional markets, convenience stores, supermarkets and hypermarkets among many others. Each channel is distinct in terms of price and packaging, so Vietnamese businesses also need to conduct market research thoroughly. Accordingly, they should focus on several key aspects such as technical standards, processes and conditions to apply for import certificates from the government, advanced technology application in processing and preserving products to maintain quality throughout the shipping process, etc.

“Vietnamese businesses attend more international trade fairs and exhibitions to promote their products and brands based on consumer's trust, seek out potential partners, establish the image of premium quality and competitive price for Vietnamese products and services", added Mr. Nguyen Tuan.

Ms. Van Thi Loan, General Director of Real Bean Coffee Co., Ltd commented on her success in exporting coffee products to the Thai market: the Thai consumer market is relatively similar to Vietnam in terms of products, but there are minor differences in terms of packaging, size, etc. Therefore, businesses need to conduct research in advance to meet the standards and enter the distribution system. Namely, businesses must provide complete and relevant documents for their products.

Real Bean Coffee is currently exporting to other countries around Asia and Europe in addition to Thailand.

Although Real Bean Coffee has only recently entered operation in April 2019, the company participated in the 2019 Vietnam Product Week in Thailand. The event has allowed the company to access the Thai market through Central Retail Group. “Vietnamese start-ups, small and medium businesses may find it difficult to export to Thailand individually. That is why the Vietnam Product Week in Thailand and trade promotion fairs are the most effective marketing channel to target Thai customers”, shared Ms. Van Thi Loan.

Mr. Paul Le, Vice President of Trade Promotion at Central Retail Vietnam, said that Vietnamese businesses need to establish a fundamental strategy, research and match consumers' tastes in additon to maintaining the originality of Vietnamese agricultural products and goods. “In order to sell goods in the Thai market, it is necessary to have products that are superior to those in Thailand; all while retaining Vietnamese traditions, culture as well as stories of Vietnamese businesses and products", Mr. Paul Le emphasized.

In addition, the design of the packaging must be delicate and meaningful so that any potential buyer can recognize the uniqueness of Vietnamese products with a glance. According to Mr. Paul Le, businesses must also pay attention to the diversification of product capacity and volume.

“We are always ready to accompany and support manufacturers, suppliers, small and medium businesses in approaching the modern distribution system in Vietnam as well as Thailand. We also aim to develop markets and establish brands through practical action programs.

Central Retail regularly cooperates with trade promotion agencies, organizes training programs and guides Vietnamese businesses in improving the packaging, design, and product quality to suit modern retail channels”, said Mr. Paul Le.

According to Long An Department of Agriculture and Rural Development, the total area of dragon fruit in the province is estimated at 12,000 hectares, with 600 hectares of VietGAP-certified production areas. Several areas in some districts such as Chau Thanh, Tan Tru, Tan An City have met the GlobalGap standard.

The province currently has 25 production cooperatives, 160 purchasing and processing cooperative groups with a total of 100 cold storage facilities. In addition, the province has 6 facilities to process dragon fruit into dragon fruit juice, dried dragon fruit, and so on. Local businesses have focused on developing sustainably and expanding their reach to the internation market. Long An province is currently developing a value chain of growing, processing and exporting dragon fruits by 2025 .