Must research the market when bringing goods into China

(SGI) - Mr. ĐẶNG PHÚC NGUYÊN, General Secretary of the Vietnam Fruit and Vegetable Association, emphasized that while the Chinese market offers vast opportunities for Vietnamese fruits and vegetables, establishing a strong presence requires a focus on enhancing quality and design. Particularly crucial is the need for thorough market research.

Must research the market when bringing goods into China

JOURNALIST: - Sir, China has recently agreed to open its market to more key fruits from Vietnam, particularly avocados and passion fruits. How do you foresee this impacting Vietnam's fruit and vegetable exports in the near future?

MR. ĐẶNG PHÚC NGUYÊN: - Firstly, it's crucial to emphasize that any fruit gaining access to the Chinese market is positive news, given its immense consumption of agricultural products. However, when discussing the impact of opening the market for avocados and passion fruits on fruit and vegetable exports, there might not be a significant immediate effect. In the short term, the export scale for passion fruit is estimated to be around USD 100 million.

The relatively modest turnover can be attributed to the limited cultivation area for passion fruit in Vietnam, coupled with the fact that the current passion fruit varieties are more suitable for processed products than for fresh exports. To fully capitalize on the opportunities presented by China's market opening, Vietnamese passion fruit needs to enhance its varieties, focusing on creating a more appealing design to facilitate increased fresh exports.

Similar to avocados, our estimations suggest that when the Chinese market opens for avocados, the export turnover is anticipated to reach approximately USD 50 million. However, it's crucial to note that upon entering the Chinese market, Vietnamese products will face competition from similar offerings from various countries, many of which may have superior quality and designs.

This year, the fruit and vegetable industry is optimistic about the possibility of China signing a protocol for Vietnamese frozen durian and fresh coconut. If realized, this development could significantly boost fruit and vegetable exports in 2024. There are high expectations for an accelerated durian export, targeting a turnover of about USD 3-3.5 billion. This substantial contribution is expected to play a pivotal role in achieving the industry's overall target of USD 6-6.5 billion, with China being the major contributor to the turnover.

- It is known that China will also allow some other countries to export durian to this market. Will Vietnamese durian face much competition, sir?

- As mentioned earlier, China has a vast appetite for agricultural products, and despite achieving record durian exports in 2023, the supply still falls short of meeting the demand. The Chinese consumers' high demand for durian remains significant, and even if more countries such as Malaysia or the Philippines enter the market, it may not be sufficient to fulfill the needs of consumers in this densely populated market of over a billion people. Consequently, while the entrance of additional competitors may intensify the competition, it is unlikely to be overly fierce. Moreover, Vietnamese durian possesses several advantages that can contribute to maintaining a strong market presence.

Firstly, Vietnamese durian has the advantage of being harvested year-round, distinguishing it from countries like Thailand, which have seasonal harvests. Secondly, Vietnam's proximity to China ensures short shipping times, preserving product freshness, and maintaining a competitive edge in terms of logistics costs. While there is a recognized disadvantage in the design and quality of varieties compared to Thailand, careful selection of varieties in the future is crucial to enhance competitiveness.

It is noteworthy that Vietnamese growers and businesses are responding well to the higher demands on quality and technical standards set by the Chinese side. Positive initiatives are being undertaken to capture this lucrative market effectively. However, beyond continuous improvements in quality, standards, and designs, achieving deep-rooted market presence and stable exports necessitates a strong emphasis on market research.

Market research is not solely about understanding competitors; it also involves comprehending the seasons of Chinese domestic goods to prevent issues like excess inventory or product returns. Awareness of Chinese agricultural products with large outputs is vital to ensure timely deliveries in line with the right harvest seasons, avoiding potential challenges.

- Sir, this year, the fruit and vegetable industry has set ambitious goals, and it appears that there has been a promising start in the first month, with very positive export results?

- Based on our preliminary calculations using data from the General Department of Customs, fruit and vegetable exports in the first month of 2024 are projected to reach approximately USD 459 million. This represents an impressive growth rate, with an increase of over 89% compared to the same period in 2023 and over 12% compared to the previous month (December 2023). The surge can be attributed to China being in the peak shopping season for the Lunar New Year, leading to an uptick in demand for fruit products. Notably, durian, dragon fruit, and bananas are experiencing strong consumption during this period. Durian, selected as a valuable gift for Tet, is particularly popular, and both bananas and dragon fruits are currently in insufficient supply domestically in China, prompting an increase in imports from Vietnam.

In particular, at this time, continuous cold spells are limiting China's domestic banana supply, as the bananas on the trees turn black and cannot be sold. With a shortage in the Chinese market, Vietnamese banana export activities are gaining favorable conditions. Additionally, the Chinese dragon fruit season, which is typically abundant in the middle of the year, has concluded. Traditionally, Chinese people prefer to use dragon fruit as worship items during Tet, leading to an increase in demand. The consumption season for Vietnam's dragon fruit in the Chinese market usually extends from the beginning of the year to the end of May annually.

With positive developments in the first month of the new year, there is optimism about generating strong momentum for the vegetable industry to achieve new milestones in 2024. Apart from the primary market, China, which shows promising signs, other markets such as the US, EU, and Australia are also expected to open up further to Vietnamese fruits.

- Thank you very much.

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