Taiwanese ties ever stronger as companies alter strategy

09:25 | 17/06/2019
As the US-China trade war drags on, Vietnam is emerging as an alternative favourite for Taiwanese companies to venture into its profitable industries and consumer markets. Wu Chun-Tse, director of the Strategic Marketing Department at the Taiwan External Trade Development Council (TAITRA), shared with VIR’s Thanh Van his insights into the trend of Taiwanese brands flocking to Vietnam.
taiwanese ties ever stronger as companies alter strategy
Wu Chun-Tse

How important is the Vietnamese market for Taiwanese brands, ­especially amid the ongoing US-China trade dispute?

For foreign companies in general and Taiwanese brands in particular, Vietnam has become an attractive business and investment destination. This is thanks to its notable advantages including a high economic growth rate, political stability, and its strategic geographic location. Additionally, the size of the Vietnamese consumer market is showing rapid and vibrant growth, with an expansion of the upper and middle classes, adding that with regards to the business climate, Vietnam has continuously reformed its institutions and policies aiming to create optimal conditions for foreign investors, including those from Taiwan.

As the US-China trade war takes place, Vietnam continues to be a potential market for regional and international businesses. According to figures from a trade diversion report by Nomura, the ongoing dispute is likely to benefit Vietnam the most (gaining 7.9 per cent GDP from trade diversion), followed by Taiwan (gaining 2.1 per cent GDP). As a result, tariff hikes have especially affected many importers and made Vietnam an alternative favourite for international companies looking to bypass the tariffs.

With the rising tensions between the two countries, in the short-term, there has been a significant increase in companies exploring new horizons in Vietnam, from the Western world to South Korea, Japan, and even Taiwanese businesses. This shows that the trade war does not obstruct Vietnam–Taiwan trading relations, and on the contrary, we believe it will actually become even stronger.

TAITRA has actively promoted ­Taiwanese brands under the ­Taiwan Excellence programme in Vietnam over the past few years. How many Taiwanese brands have entered the Vietnamese market under this assistance?

To TAITRA, Vietnam is the brightest star among emerging economies in the ASEAN. It is proven through our 10 consecutive years of campaigning in this market, and we always hope that Taiwan will remain a valuable trading partner for Vietnam as it moves on to its next stage of economic development. With all of our efforts, TAITRA has actively introduced a variety of leading Taiwanese brands certified with the Taiwan Excellence Awards to Vietnamese consumers, and given them opportunities to approach future living standards through our experiencing zone in a series of major events, such as the Taiwan Expo, Taiwan Excellence Pop-up Store, Ho Chi Minh City Marathon, and especially Vietnam ICT COMM.

With these efforts, there have been quite a number of Taiwanese names introduced, and they keep on increasing. At ICT COMM this year, with 22 leadings brands in the information and communications technology (ICT) sector besides familiar names with Vietnamese consumers like Asus, BenQ, and Transcend, we also introduced new faces such as Gigo and Marson. Each name promises to bring even better and more diverse experience with their cutting-edge products.

taiwanese ties ever stronger as companies alter strategy
Vietnam is in a favourable position with its economic results and projects, and Taiwanese businesses want to take full advantage

How do you see the potential of Vietnam's ICT industry for ­Taiwanese companies?

ICT is one of the best prospect industry sectors for Vietnam. Last year was a successful one for Vietnam in terms of ICT industry development. Industry revenue is expected to rocket in the coming years since Vietnam has a good foundation and the elements to flourish further.

The sector will continue to be a driving force for growth and transformation in the Vietnamese economy, especially in delivering Industry 4.0 ambitions, as this will secure the country’s strong competitive regional position in the coming decades. With a steady business environment, the local market is suitable for Taiwanese investors looking to use Vietnam’s favourable environment to trade in the ASEAN and larger Asia Pacific region.

So far, we are proud to say that besides the US and Japan, Taiwan is one of the key suppliers in the hardware market in Vietnam. Moreover, as a result from the US-China trade war, US import substitution has especially benefitted Vietnam and Taiwan in electronics products.

What is the aim of the 22 leading Taiwanese companies partaking in Vietnam ICT COMM 2019?

Joining the event, TAITRA brought over 20 leading Taiwanese brands from ICT-related sectors including mobile apps, technology solutions, wireless technology, and other internet services. They are awarded with Taiwan Excellence, which was an initiative of the Bureau of Foreign Trade in 1992, as a symbol to honour Taiwan’s most innovative products that provide tremendous value to users worldwide. All products carrying this symbol have been selected as winners of specific Taiwan Excellence Awards based on outstanding research and development, design, quality, marketing, and Taiwanese-made merits.

Learning Vietnam’s culture and market conditions, Taiwanese companies took this event as a great opportunity for outreach and ­exposure of their high-end products, which are equipped with the latest technology from “Asia’s Silicon Valley” to Vietnamese consumers. Therefore, local users have direct access to an innovative modern lifestyle, inspired to experience high living standard by using Taiwanese supply. Gradually, ­companies from Taiwan can become familiar with local practices which align them with Vietnam’s particular business environment and ensure their ­businesses are able to reap a return on investment.

Notably, efforts by both the public and private sectors to boost economic exchanges between the two economies have borne fruit over the years. Taiwanese companies actively boost their connection with Vietnamese enterprises and facilitate a new investment wave into Vietnam. Through taking part in Vietnam ICT COMM, leading brands find potential partners from whom they can seek for international knowledge exchange and industrial co-operation business deals, making the world a better place to live when everyone can enjoy the convenience technology brings.

What are TAITRA's plans and ­initiatives to promote Taiwanese companies in Vietnam going ­forward?

Vietnam’s consumer market has been growing at an annual rate of 10 per cent in recent years and has plenty of room to expand in the next three decades.

TAITRA believes it is necessary to boost our profile in order to strengthen the bilateral trade relationship with Vietnam through promotional activities. Particularly in 2019, within the framework of the Taiwan ­Excellence campaign, the Taiwan Excellence Pop-up Store officially returned to Ho Chi Minh City in April and May with the ­participation of 15 outstanding ­Taiwanese brands from consumer-friendly sectors and industries.

In August, TAITRA will ­organise the Taiwan Expo as a large-scaled impactful activity in order to promote Taiwanese companies since they are increasingly turning to ­Vietnam as a destination for ­investment and trade. Interestingly, there is also another activity series that will take place this year, with the purpose of promoting Taiwan ­Excellence’s image, as well as ­introducing Taiwanese cutting-edge brands and products to Vietnamese people.

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