Dr Dang Thao Quyen, Senior Program Manager for International Business at RMIT Vietnam, said the majority of Vietnam’s involvement in global value chains lies in low-value-added segments.
For example, while Vietnam is the world’s largest exporter of cashew kernels, most of these are exported as raw nuts.
Similarly, Vietnam’s textile and garment industry is one of the leading global exporters, but many businesses focus solely on outsourcing.
She said: “As a result, only modest revenue remains within Vietnam.”
On the other hand, Switzerland provides a contrasting example.
“Although Switzerland cannot grow raw cocoa beans due to its climate, the country is world-renowned for its premium chocolate brands such as Lindt and Toblerone,” said Dr Quyen.
To elevate Vietnam’s economy and improve GDP per capita, Dr Quyen believes local businesses should adopt innovative approaches by building long-term capabilities from day one, enhancing competitive advantages, and expanding into global markets.
Many people hold the traditional view that businesses should be well established in the domestic market before considering international expansion.
However, Dr Quyen presented a different perspective.
"Why not work on both simultaneously, or consider expanding internationally soon after establishing a foothold in the domestic market?
“Having made-in-Vietnam brands present in global markets may not be far-fetched if we change our mindset and act accordingly”.
Ms Natalie Thuan Ngo from Amazon Global Selling Vietnam said: “These brands don't necessarily have to come from large enterprises. Small and medium-sized enterprises can also build home-grown products that appeal to global consumers.”
Le Thanh Hoa Fashion, one of the speakers at RMIT Global Business Forum 2024, could be an exemplar. Only breaking the global ground recently, Le Thanh Hoa’s costumes have become favourites of many world celebrities at critical events such as Oscar, Grammy and Cannes.
“By combining the traditional values and stories with modern creativity, the flexibility in production and competitive pricing, as well as high quality craftmanship, Le Thanh Hoa and other Vietnamese fashion brands have a lot of opportunities on the international markets”, Dr Quyen shared.
Echoing Dr Quyen, RMIT Senior Lecturer in International Business, Associate Professor Abel D. Alonso said: “Many Vietnamese companies are increasingly paying attention to value-adding as a tool to gain international exposure.
“They carve their space in an extremely competitive business environment.”
Professor Alonso shared the example of DACE Vietnam, a company that collaborates with thousands of local food growers to achieve high quality control, leading to significant improvements in their final products. This approach led to international interest in DACE’s organic offerings.
Only two years after its establishment in 2013, DACE began selling to Japan and South Korea. In 2018, the company obtained various key certifications (JAS Organic, EU Organic, and USDA) which helped open doors to more demanding consumer markets and elevated Vietnam's image internationally.
Associate Professor Alonso said “Research highlights the importance of export performance in value-adding activities such as product development, market intelligence, bargaining, negotiation skills, distribution, and promotion.
“Surprisingly, however, after-sales service was not identified as a significant factor.”
According to Associate Professor Alonso, businesses in the cashew industry are investing in modern processing technologies to address new and stricter international standards.
For instance, Organic Viet Food, a speaker at the Global Business Forum 2024, adds value to cashew nuts by creating appetising flavours and convenient packaging to export through e-commerce platform Amazon. The company has quickly captured the interest of the US market.
While Vietnam has opportunities to strengthen its position in value chains globally, it must also address various challenges.
Dr Vu Thi Kim Oanh, RMIT Lecturer in International Business said that the lack of skilled and unskilled staff can hamper efforts to elevate industries. Additionally, aligning with the green transformation trend, producing vast amounts of energy needed due to rapid economic development, and bottlenecks in infrastructure facilities could pose unprecedented challenges.
