Dubai Exports, the export promotion agency of Dubai Economy, recently went on a trade mission to Vietnam as part of enabling exporters and manufacturers in the UAE to engage with high-growth markets and attracting further international attention to Dubai’s gateway advantage.
One of the top 25 fastest growing economies globally, Vietnam’s GDP (gross domestic product) grew 7.5% during the third quarter of 2017 and PricewaterhouseCoopers estimates the country to be the 20th largest economy in the world by 2050. Vietnam is also a member of ASEAN (Association of South East Asian Nations), which represents the 7th largest economy in the world with a combined GDP of over AED 11 trillion (US$3 trillion) and predicted to be the 4th largest by 2050.
Dubai Exports hosted two seminars in Ho Chi Minh City and Hanoi in Vietnam during the mission attracting a large number of buyers who heard about the UAE’s advantages as a source market. Speakers at the seminar also explained how Vietnamese companies could re-export to the Middle East, African and Central Asian regions competitively using Dubai as a hub. Vietnam is also an excellent gateway for UAE companies seeking to enter the smaller but important economies of Laos and Cambodia.
His Excellency Khalid Ibrahim Al Qahtani, the UAE Ambassador to Vietnam, stated: “With increases in foreign investment and consumption patterns, the Vietnamese market is set to grow further and offer greater opportunities for domestic companies to co-operate with those in the UAE. From the seminars and B2B meetings in Ho Chi Minh City and Hanoi it was evident that Vietnamese buyers are aware that UAE companies can produce to global standards and quality. The UAE companies definitely have a competitive advantage in the highly prized Vietnamese market.”
Engineer Saed Al Awadi, CEO of Dubai Exports, commented: “Dubai Exports has been working with a number of our counterparts to increase bilateral trade and investment with Vietnam. Although this was our first trade mission to Vietnam we have in the past hosted various groups from Vietnam and we are set to receive another of such groups in Dubai shortly.”
Al Awadi pointed out that consumer spending in Vietnam increased 80% between 2010 and 2016 – from AED 293 billion (US$80 billion) to AED 536 billion. He added that the projected GDP growth positively impact consumer spending in the country, presenting further opportunities for UAE manufacturers and exporters.
Badr Abbas, Senior Vice President Commercial Operations Far East at Emirates, commented: “As a global connector of people, places and economies, Emirates continues to play an important role as a bridge between the UAE and Vietnam. By offering three freighter flights on a weekly basis, adding to the two nonstop daily passenger services from Dubai to Ho Chi Minh City and Hanoi, we are delighted to contribute to the increasing trade and tourism flows between the two countries.
“Since we started services between Dubai and Hanoi in August 2016, we’ve transported more than 200,000 passengers between the two cities. In addition, the launch of our non-stop service to Hanoi in July 2017 has contributed to a 69% increase in passengers on the route to date.”
In terms of trade, Emirates SkyCargo has witnessed a significant increase in the volume of exports from Vietnam to the UAE in the past five years, especially the perishables industry, capitalising on the country’s huge comparative advantages in agriculture, and simultaneously, the penetration of UAE’s quality products into the potential market in Vietnam.”
The Dubai Exports delegation comprised UAE companies of all sizes, particularly attracted by the large population of young consumers – 70% of Vietnamese are aged between 15 and 64 – as well as the increasing disposable incomes, rapid urbanisation and rising living standards in Vietnam. Vietnam’s population of 94 million is the third largest in Asia and twice that of Spain. Currently, per capita income in Vietnam is higher than that of India, Dubai’s largest export and re-export destination. Vietnam also attracted over $20 billion in foreign direct investment (FDI) in 2016.
The mission focused on Ho Chi Minh City and Hanoi as the two cities together account for a fifth of the population in Vietnam. Studies indicate Vietnamese people are increasingly purchasing high-end products driven by rising disposable incomes and confidence in the economy and as a result foreign brands and suppliers are gaining a foothold in the market.
Mobile phones are the top category of Vietnamese imports to Dubai because South Korean manufacturer Samsung makes half of its handsets from Vietnam. Vietnamese textiles are also an important import category in the UAE chiefly because global brands such as Nike, Adidas and North Face source their products from Vietnam. Agricultural products is another important category –about 70% of Vietnam’s black pepper production worth over AED 367 million (US$100m) is imported to the UAE. As far as exports to Vietnam are concerned the key categories are sugar, aluminium, food & beverages, and lubricants.