Vietnam has since the mid-1980s showed a strong growth rate, with an average of 6.5 percent, and been one of the fastest growing economies in Asia. After a few years of more modest growth the trend last year changed and turned up again, and in 2015, expectations are set on a growth rate of 6 percent. Behind the good growth figure lays a steady increase in private consumption which partly depends on the stable prices and real wage increases. Foreign direct investment in the Vietnamese manufacturing sector is also one reason.
Vietnam pursues an active policy to attract foreign direct investment (FDI) through the establishment of economic zones and tax incentives for foreign companies that has established their business in the country. A sector that has seen a real expansion in recent years is the electronic industry, and as an example Samsung can be mentioned, they currently produce 75 percent of its smart phones in Vietnam.
Sweden has had a long relationship with Vietnam, and was in 1969 the first Western country that established diplomatic relations with Vietnam. The core of the relationship was for a long time the development cooperation, but has now switched to a commercial relationship. In 2014 Sweden exported goods for 1.2 billion SEK to Vietnam and imported goods for an amount of 6.7 billion SEK. The Swedish export products mostly consist of engineering products, particularly machinery and equipment, and medical and pharmaceutical products. The relatively modest exports to Vietnam indicate that there is great potential for growth, especially when the free trade agreement that is under negotiation between the EU and Vietnam has been implemented. About half of the imported goods from Vietnam are appliances for telecommunications, due to large manufacturers, like Samsung, that have put their production in the country. Sweden also imports clothes, shoes and food from Vietnam.
In recent years, several Swedish companies have successfully established their business in the region. A growing middle class has led to increased demand for Swedish goods. At the same time the political leaders invest billions on improving infrastructure, particularly in telecommunications, transport and manufacturing industries. According to Business Sweden’s numbers there is about 50 Swedish or Sweden related companies that have some kind of presence in Vietnam.
Business Sweden has been active in Vietnam since 1999 and has, along with the Bangkok office, responsibility for the Mekon region (Thailand, Vietnam, Myanmar, Cambodia and Laos). The office is located in the Swedish embassy premises in Hanoi, and consists together with the team in Bangkok of ten people. Over the years, we have built a strong and successful network of local business leaders and policy makers in order to promote Swedish competitiveness in the region.
Business Sweden has several years of experience in supporting Swedish companies in their growth on the Vietnam market. We have for example supported in evaluating market attractiveness, identifying high potential customer segments, key stakeholders and local partners, defining market entry and growth strategies, understanding the competitive and regulatory landscapes, provided consultation and support in setting up companies, and arranging meetings with local businesses and policy makers.
Contact us to find out more about the Vietnamese market and how we at Business Sweden can help you to grow your business in Vietnam.