Economists urge VN firms to diversify markets, understand post-pandemic trends

Economists urge VN firms to diversify markets, understand post-pandemic trends

Pham Chi Lan, an economist who was an advisor to the Government in the past, said firms would need to join hands with industry business groups to study new market trend and changes in consumer habits after the pandemic to identify large and niche markets and reshape their business strategies.

“The market will never return to the old normal that existed before the pandemic but to a new normal. New normal will have new abnormalities. Therefore, research should be conducted.

“Businesses that are in associations should sit together to discuss what they can do and should not wait for the Government. Based on their requirements, they can propose policies.”

Nguyen Thi Thu Trang, director of the Viet Nam Chamber of Commerce and Industry’s WTO and Integration Centre, said: “The demand for IT products will increase to meet the new way of working. Demand for green products will be further boosted. After the end of social distancing, there will be demand for products and services that were not available before.

“This is a change in consumption trends as people realised what is essential for life when they stayed at home.

“If we want to seize the opportunity, we will have to change too.”

Viet Nam’s exports depend on two factors: global demand and competition with similar products, according to Trang.

Demand is very low, leading to a reduction in the exports of many products in the second quarter.

But Viet Nam still has a chance to promote exports. Firstly, during the epidemic, Viet Nam improved its reputation by controlling the epidemic well and donating face masks and other medical stuff to support its partner countries.

Secondly, demand for items such as food, medical supplies and computer equipment in which Vietnamese firms have export strengths has increased globally.

“The EU-Viet Nam Free Trade Agreement, which will come into effect this year, also offers opportunities for Vietnamese firms to export to the EU,” she said.

"The EU has over 400 million people and the second largest purchasing power in the world. Other major exporting countries to the bloc, such as China and Thailand, do not have FTAs with it," she pointed out.

She said local firms should pay more attention to their domestic market.

“Vietnamese enterprises should promote exports but meanwhile increase consumption in the domestic market.”

Lan said Viet Nam should continue to develop sectors such as medical products and pharmaceuticals for both the domestic and export markets. Many countries were worried about another wave of the pandemic, and so demand for these products would still be high, she explained.

FDI attraction

Delegates at the seminar also agreed that Viet Nam was set to benefit from an acceleration in the movement of manufacturing out of China.

Phan Huu Thang, former director of the Foreign Investment Agency, said Viet Nam’s outstanding record in containing the pandemic could strengthen foreign investors’ trust in it.

Besides, the free trade agreements the country has signed would offer incentives to manufacturers based in Viet Nam.

But to compete with other countries in attracting investment, Viet Nam would need to do a number of things like devising methodical strategies, prepare soft and hard infrastructure and train human resources.

Delegates suggested that the Government should focus on foreign investors who can bring value-addition to Viet Nam.

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