Dragon revealed: Opportunities abound for New Zealand business in Viet Nam

If you were asked to guess which global economy grew at a rate second only to China over the last 25 years, and is expected to be amongst the top three between now and 2050, would you have said Viet Nam?

Watch the Hihiko webinar here

The impact of this rising economy and regional power of almost 100 million people in Southeast Asia has been steadily increasing in recent years. What’s more, its disciplined and effective response to Covid-19 means Viet Nam will be one of only two economies in Asia expected to record positive growth in 2020.

While images of dramatic scenery, conical hats and delicious cuisine are now well known, the extent of Viet Nam’s dynamic economic transformation is not always appreciated - hence the title of the third Hihiko Asia business webinar co-presented by the University of Canterbury Business School and the Asia New Zealand Foundation: “Hidden Dragon: New Zealand Business Perspectives on Viet Nam”.

The timing of this event coincided with the release of the Foundation’s latest research report, “Viet Nam and New Zealand: Let’s Go!” Together, the message to New Zealand business is clear – building on our longstanding and warm bilateral relationship, which continues to diversify, it’s time to explore Viet Nam.

The full webinar, available here, is crammed with insights and well worth watching in full. Challenged to come up with just five key points, ours were: 

  • Viet Nam is growing fast, with a population of talent and drive. Our stereotyped images of the country and its people need updating – Vietnamese are increasingly tech-savvy and globally connected. Viet Nam hasn’t seen a rapid acceleration of e-commerce in 2020 in response to Covid-19 because Vietnamese consumers were already online – it was more a continuation of an existing trend.
  • Viet Nam is now a major exporter of both agricultural products and manufactured goods and has worked hard to secure free trade agreements with a wide variety of partners, three of which include New Zealand, and negotiated deals with the EU and UK. Because Viet Nam is now probably the second most connected county in the region, according to former ambassador to Viet Nam, Haike Manning, with labour costs one third to one quarter of those in China and cheap industrial property, it is well placed to benefit from global supply chain diversification.
  • New Zealand exporters need to improve brand awareness in Viet Nam. According to business analyst Linh Nguyen, we are known in general terms as a distant agricultural island associated closely with Australia. In many cases, our products are not recognised or prized; possibly a decade behind Australia in terms of market development. Linh identified Rockit apples as an example of an established, recognisable kiwi export, but Haike Manning agreed that New Zealand sometimes sits “in our own little echo-chamber”, so more work is required.
  • The nature of opportunities for New Zealand business is changing. Beyond the usual primary produce exports, Viet Nam is emerging as an important link in global manufacturing and supply chains. The work of Plant & Food Research to “re-imagine” dragonfruit with Vietnamese partners was shared as an example of a new approach, but New Zealand companies need to think carefully about how to engage. While stepping up market engagement, they should not assume that Viet Nam is the same as other Asian markets.
  • Doing business in Viet Nam is not without risk. The market can be “complex and competitive”. Linh Nguyen posed other questions worth considering: Will next year’s leadership reshuffle result in significant policy changes? Is corruption still a serious problem? But generally, panellists noted Viet Nam’s political stability as a positive factor, with no dramatic changes in direction expected in the short or medium term.

A big thank you to our experienced webinar panellists who shared their perspectives on this topic: Warrick Cleine, Chairman and CEO of KPMG Viet Nam and Cambodia; Haike Manning, former NZ Ambassador to Viet Nam and founder / Managing Director of LightPath Consulting Group, who authored the Foundation report; and Linh Nguyen, Associate Director and Viet Nam Lead Analyst at Control Risks Ltd. Dr Anna Earl, Department of Management, Marketing and Entrepreneurship at UC Business School facilitated the discussion.