Prioritizing export promotion through e-commerce

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Mr. Vu Ba Phu

How do you assess the effectiveness of trade promotion activities on Vietnam's export growth?

Trade promotion has seenmany activities in recent years, from the activities of the National Trade Promotion Program to the National Trademark Program as well as other activities to support capacity enhancement and information provision for enterprises. All have contributed to increase the export turnover for Vietnamese enterprises, especially small and medium enterprises in cases of limited resources.

Throughout the years, there have been thousands of training courses for small and medium enterprises across the country to improve the capacity of enterprises, development of products, development of models and brands. Similarly, there have beenseveral hundred training courses held throughout the country every year to provide skills on trade promotion and market access for enterprises. With foreign fairs and exhibitions, the support resources from the Government amount to hundreds of billions of dong per year. In addition, the socialization and capital contribution from the enterprises are 3-4 times higher than the amount of support from the Government resources. In general, the total budget for trade promotion activities is about 400-500 billion VND/year, which has generated export growth of about 10%/year. Thus it is possible to evaluate the operation quite effectively.

There are views that trade promotion through fair participation has not been effective. How do you feel about this?

This is an incomplete, unthorough review. Each year, in the framework of national trade promotion activities, the enterprises and the associations are allowed to attend a few dozen fairs around the world with Government support. The enterprises participating in these fairs are selected, and controlled with very strict criteria from the Ministry of Industry and Trade.For example, how much export turnover they generate,the English skills of theiremployees and the quality of business officers.

When participating in the fairs, although there are no statistics on how many contracts are signed at the fairs, participating in the fairs is also a process for the enterprises to access the market, customers and introduce products. The enterprises will be able to sign contracts with partners. Some enterprises attending the fairs reported that they only need to attend the fairsthat have orders for the whole next year.

Many experts assess the cost of trade promotion in Vietnam was not commensurate with the export potential.Is this true?

Compared with other countries in the region as well as the world, funds allocated from the State budgeton trade promotion activities arevery low.Specifically, for many years, Vietnam's trade promotion activities cost about 0.011% compared to countries like Thailand and Malaysia.For Korea and Japan, our fundingis still several hundred times less.This comes from the fact that the economy still has many difficulties and limitations compared to other economies, especially the economies of Japan and South Korea.In ordertosupport the enterprises and associationsbetterit is necessary to improve and spend more of the Government budget ontrade promotion activities.

Which issues will the trade promotion program, especially export promotion, focus on?

Vietnam participates in many new generation FTAs. In order to make the most of the benefits of FTAs as well as overcome the challenges of global trade, sustainable export development, trade promotion activities need to have some suitable orientation.

First, promote the application of information technology and e-commerce in export promotion.

Second, promote international cooperation in export promotion activities, focusing on finding partners for the domestic associations and enterprises, especiallysmall and medium enterprises. Because in the global context, trading partners will be more important than the market. Partners can invest in this market today but tomorrow can withdraw and invest in other markets. In the future, we will focus on supporting small and medium enterprises and associations in maintaining sustainable connections with trading partners.

Third, the orientation of trade promotion is to improve the market information system for the enterprises, especially small and medium enterprises, in order to create a smooth communication channel between Vietnam's affairs, Vietnamese representative offices on the world market and the Department of Trade Promotion and the Department of Import and Export inland, Trade Promotion Centers of localities, provinces and cities in all country, and with associations and enterprises. The goal is to have an information system aboutmarket opportunities,providing the enterprises with the most effective mechanisms.

Fourth, in the framework of the National Trade Promotion Program, we will have to make changes, find out focal points and find out activities that are truly nationalto supportenterprises widely, especially small and medium enterprises.Support trade promotion associated with activities such as building, developing and protecting brands of enterprises in the domestic market as well as the international market. By building, developing, protecting brands, the enterprises are valuable and have opportunities to increase value in the world market and domestic market;at the same time, through the maintenance of the brand name, the enterprises can maintain sustainable export turnover.

Could you analyze more clearly the role of export promotion through e-commerce?

E-commerce as well as digital development is very strong in international trade. For Vietnam, the growth rate of e-commerce as well as digital trade and the digital economy is expected to increase nearly 600 times in comparison with 2003. Therefore, promoting export through e-commerce as well as the digital economy is one of the priorities of the Ministry of Industry and Trade to support enterprises.

The support is implemented through improving skills and capacity for enterprises, improving understanding of trade promotion and export promotion through e-commerce.The Ministry of Industry and Trade connects with e-commerce service providers in the world such as Amazon, Alibaba, other digital companies such as Google so that these units can come to Vietnam, cooperating with the Ministry of Industry and Trade and supporting the enterprises, especially small and mediumenterprises. This is to help enterprises apply the tools of e-commerce anddigital economy the best promote exports.

Besides the efforts from the State management agencies, how would you advise enterprises to achieve better results in export promotion?

The enterprises need to be proactive in trade promotion and export promotion activities because the Government cannot do it all. The Government in the National Trade Promotion Program also has no fundsto cover all trade promotion activities. The enterprises need to share the costs and funding for trade promotion activities with the Government. In addition, the enterprises must also be very proactive in seeking markets, maintaining brand development in the international marketamd ensuring sustainable exports.

Thank you, Sir!