Looking for an up-and-coming market with a strong GDP and opportunities for long-term growth? Look no further than Vietnam. With more than 96 million consumers and the fastest-growing middle and affluent class in Southeast Asia, Vietnam has become an attractive market for U.S exporters.
As we transition to a post-pandemic economy, West Virginia exporters should consider opportunities in Vietnam’s dynamic market. Here are four reasons why.
Vietnam’s Industry Opportunities Align with West Virginia’s Economy
West Virginia’s economic output and Vietnam’s demand are in alignment. Products and services in demand include those in the energy, hardwoods, building products, aerospace and defense sectors.
According to the U.S. Commercial Service, 38 percent of Vietnam’s electricity comes from coal-fired power plants. That number is expected to decrease over the next decade as the country uses more natural gas and renewable energy sources. Meantime, Vietnam is upgrading electrical infrastructure and aims to double capacity to 125-130 gigawatts by 2030, up from about 54 gigawatts. This means West Virginia companies with equipment and services focused on the energy sector could have increased market potential in Vietnam.
Hardwoods and Building Products
Vietnam’s growing economy has created a need for infrastructure improvements across the country. One of the largest infrastructure project is the North-South Expressway, which will span over 1,300 miles and connect Hanoi and Ho Chi Minh City. Investment in Vietnam’s real estate industry is also projected to increase as the country’s housing industry is expected to recover in 2021. This growth will increase demand for building products and lumber, which could provide incredible opportunities for West Virginia’s wood industry.
Due to an increase in tourism, increased trade from inclusion in several Free Trade Agreements and the implementation of the ASEAN Open Skies policy, Vietnam is one of the fastest growing aviation markets in Southeast Asia. And the sky’s the limit for this growing industry. By 2030, Vietnam plans to spend $15.4 billion to develop 28 airports. Market demand for maintenance and repair services is expected to increase significantly, which will create many opportunities for West Virginia’s aerospace sector.
The United States lifted an embargo on arms sales to Vietnam in 2016, which has created opportunities for defense companies previously locked out of the market. Vietnam is focused on modernizing its maritime defense capabilities along its 2,000-mile coastline and opportunities exist for equipment suppliers for naval combatants, aerial defense, intelligence systems and surveillance and reconnaissance equipment.
Vietnam‘s Pandemic Response Was Effective
According to news reports and other economic reports, Vietnam ranks near the top of lists for countries to best handle the COVID-19 pandemic. Metrics used to determine this include immediacy of government response to mitigate the spread of the virus, death rates and time in lockdown. In all areas, Vietnam performed well. To date, Vietnam has reported 2,500 COVID-19 cases and 35 deaths. It lifted lockdowns in May 2020 and only imposes restrictions on specific villages where cases of the virus spike. Due to rapid response in the early stages of the pandemic and minimal impact of the virus, Vietnam is poised to quickly resume normal trade relationships.
Connecting to Buyers Is Easier Than Ever
Thanks to the Internet, businesses are finding new ways to stay connected. Many companies are using digital tools to meet with clients and customers. This digital shift has expanded opportunities in markets such as Vietnam. West Virginia exporters can use this to their advantage and reduce travel expenses by meeting prospective customers in Vietnam through Zoom and Microsoft Teams. Traveling to the market to develop business relationships is still encouraged, but conducting initial meetings virtually can help you prioritize the best partnership opportunities before an in-person visit.
A New MOU
On February 24, 2021, West Virginia Gov. Jim Justice and Vietnam’s Vice Minister of Industry and Trade, Do Thang Hai, marked the beginning of a formal relationship between the two governments with the signing of a Memorandum of Understanding. MOUs outline areas of cooperation with a focus on trade, education and tourism. Facilitated by U.S. Rep. Carol Miller, this agreement opens additional doors for West Virginia exporters to sell goods and services and produce new leads for direct investment.
Still not sure Vietnam is the right market for your products? Take advantage of customized market research reports through the WV RAISE Initiative. Learn more at westvirginia.gov/export-assistance. You can also learn more about market entry and STEP grant funding opportunities to support your export marketing efforts by contacting a West Virginia Department of Economic Development trade representative.
By Caitlin Ashley-Lizarraga
International Trade Representative
Caitlin works with the West Virginia Department of Economic Development’s Export Promotion Program. She helps introduce the world to the hidden gem of West Virginia one export at a time.