KẾ HOẠCH XUẤT KHẨU cà PHÊ của VIỆT NAM SANG THỊ TRƯỜNG TRUNG QUỐC e

KẾ HOẠCH XUẤT KHẨU CÀ PHÊ CỦA VIỆT NAM SANG THỊ TRƯỜNG TRUNG QUỐC THE EXPORT OF VIETNAM COFFEE TO CHINESE MARKET I RATIONALE FOR CHOOSING CHINESE MARKET China is an attractive market for agricultural products of Vietnam China is the 3rd largest exporting market of Vietnam, after the U.S and Japan Customs data reveal that China imported 137,000 tons of coffee in the period of 2007- 2011, worth USD 365 million Only in 2011, China imported 43,000 tons, increasing 41.9% in comparison with that in 2010 In which, 103,900 tons of coffee were imported from Vietnam in the period of 2007 – 2011, reaching the turnover of USD 195 million, accounting for 90 % of the total coffee imported from ASEAN countries In the first half of 2012, China imported 15,000 tons of coffee from Vietnam, reaching the turnover of USD 31.88 million, accounting for 96.2% of the total coffee imported from ASEAN China is a growing economy in the World; in the last few years, Chinese economy has been growing at a high speed In the 2nd quarter of 2010, with the dislodgement of Japan from the 2nd position in the world economic map, China has proved its significant rebound USA USA Japan China Germany Japan Englan d Germany France France China England Source: vneconomy.vn In terms of geography, China is a neighbor of Vietnam that is useful in saving the costs of transport and preservation during the export In addition, there are many similarities in the food culture of Vietnam and China Therefore, it is easy for us to grasp the demands of China for this commodity In the tendency of integration, Vietnam and China signed an agreement on the application of sanitary and phytosanitary measures in 2008, to create initial favorable conditions for the export of Vietnam’s fruit into China This is the motivation for exporting businesses to pay more attention to products’ quality and consider quality as the most important factor for the long-term survival for any products II CHINESE MARKET Economic status: - Living standards: China is the second largest economy in the world with the GDP (in 2009) of Yuan 33,500 billion, GDP (PPP) of 8.7%, the second latest foreign reserve in the world Per capita income in China is about USD 6,000 - Goods distribution system in China: In the goods distribution system in China, there exists many intermediate distribution layers from the time when a product is produced until it is delivered to retail stores Between the retailer and producer in China, there are an average number of 2.21 wholesales, two times higher than that in France (0.73) and in USA (1) It is the closed and multi-layer distribution system that makes a good has its price significantly increased before being delivered to the end user The retail price in China is 48% higher than that in USA and 55% higher than that in France on average which limits the penetration of foreign companies into Chinese market Political status: The Government of People's Republic of China is managed by the Chinese Communist Party; in addition, there are other eight Parties State uses monopoly methods to deal with challenges as well as find ways to limit differences (political opinions) by improving the economy, allowing people to express their grievance, and tolerating people who have expressed their grievance if they are believed not to be supported by other organizations Many people are satisfied with the role of the government in stabilizing the society, creating favorable conditions for the continuous growth of the economy - Vietnam – China relationship: The total two-way trade turnover between Vietnam and China is increasing China is the second largest exporting market of Vietnam, after the USA Vietnam and China have adopted a series of economic cooperation program aimed at improving the legal environment, business environment and software infrastructure for the commercial development Legal status: After accessing into WTO, China has made commitments to the standardization of its legal system, particularly, in the commerce and investment To be accepted to access into WTO, China has agreed to sign agreements on free trade, tariff reduction and custom transparence, etc to gradually remove trade barriers to reach free trade with countries in the region including Vietnam Therefore, it will create favorable conditions for businesses to penetrate into this market However, like other countries, along with the cooperation in regional and international economic forums, China also has policies to protect its domestic production through regulations on technical barriers and regulations related to every specific product This is also a challenge of Vietnam exporting countries in the way of integration and trade liberalization Culture status: China is one of the cradles of human civilization, is a multi-ethnic country with around 56 peoples recognized to have very diverse culture - Culture in consumption In general, Chinese has such common characteristics as: they not need durable products but products of short life cycle of high quality, nice appearance, perfection and utility III COFFEE The supply of coffee in Chinese market It is estimated by leaders of Chinese industries that Yunnan harvests from 22,000 to 28,000 tons of Arabica every year This is only a small amount in comparison with around 900,000 tons of Vietnam – the second last coffee exporter in the world There are few chances to increase the coffee output as farmers prefer rice, rubber or high-priced crops China is producing coffee to supply a small amount to the domestic market while mainly depending on the coffee exported by foreign suppliers Along with Vietnam, Indonesia, Colombia and many other countries of various brands are exporting coffee to Chinese market The demand for coffee in Chinese market The current consumption of coffee in China is about 30,000 to 40,000 tons/ year with the annual increase in the demand of 10 – 15% According to the Coffee Association of China, coffee consumption of this country will continuously increase and may reach 120,000 tons by 2012 if businesses provide products suitable to the budget and tastes of the local consumers Each year, a Chinese only drinks cups of coffee on average Chinese drinks little coffee There is a huge gap between coffee and tea in China when this country annually consumes up to 700,000 tons of tea Coffee production status in Vietnam Up to now, the coffee industry in Vietnam has about 500,000 hectares reserved for growing coffee with the annual output of more than 900,000 tons; 10 to 15% of this area is owned by State enterprises (including central and local enterprises) while the remaining 80 - 85% is owned by farmers or households or owners of small farms Coffee exporting status in Vietnam The average output of exported coffee is around nearly USD billion/ year, reaching USD 2.5 billion in 2011 Export turnover: Table 1.1 Coffee exporting status in Vietnam in the period 2007- 2011 Year 2007 2008 2009 2010 2011 Quantity Increase Average Amount Increase (thousand rate (%) price (billion rate (%) tons) 950 954 980 884 1200 +2.1 +2.7 - 5.2 +53.2 (USD/ton) USD) 1768 1.8 2044 1.95 +7.7 1800 1.764 -10.5 1650 1.7 -3.7 1503 2.5 +32 Source: Vietnam national coffee It can be seen from table 1.2 that the turnover of coffee exported to China only accounts for around 1.5% of the total turnover of coffee exported to the world market The reason for the limited consumption of coffee of 1.6 billion Chinese is the habit of drinking tea However, this habit is gradually changing and this is a good chance for us to change the figure of coffee exported to Chinese market Table 1.2 Status of exporting Vietnamese coffee to Chinese market in the period 2007-2011 Quantity Increase Average Amount Increas Year (thousand rate (%) price (billion USD) e rate 2007 2008 2009 tons) 14179 14074 14627 19.7 - (USD/ton) 1768 2044 1800 24615000 32000000 24732000 (%) +30 - 22586000 29361000 22.62 -8.68 +29.01 2010 2011 13194 17910 16.87 - 1.17 28.22 1650 1503 Source: Vietnam national coffee IV PLAN ON COMPETITION To be able to compete in the Chinese market, enterprises should pay attention to methods to penetrate and establish a position in this market such as: Penetrate into the retail system Upon entering the Chinese market, enterprises will encounter difficulties caused by the habit of drinking tea of the local consumers Therefore, it is essential for enterprises to find suitable ways to approach the end users to help them have a habit of drinking coffee Travelling by train is the daily habit of Chinese, from ordinary people to merchants Initially, businesses should penetrate into the retail system on train by inviting passengers to try their products The trial can make passengers gradually like the product and they can introduce to people they know Accordingly, coffee products can approach Chinese consumers, particularly, young ones Penetrating into supermarkets in China Only by officially penetrating into the supermarket system of China, can businesses control the output Therefore, businesses need to negotiate and sign contracts with big supermarkets to put their products into this distribution channel In order to increase the consumers’ awareness of the product and the consumption volume, businesses should implement programs on product trial, promotion and gift offering Moreover, businesses should make specific packages for each product sold in Chinese supermarkets along with registering for brand recognition in this market to avoid counterfeit products Establish agents to sell products Agency development is one of important factors in the policy on diversification It contributes to widely introducing companies’ products in a wide range of markets to each end user to increase the goods output and annual turnover With a market of billions of people and millions of small and big brands such as Chinese market, it is difficult for businesses to immediately gain a large market share Enterprises should know their own abilities to find a right target market to have customers’ support of customers to gradually establish a network of commodity distribution Actively take part in fairs for the brand promotion Fair is a good chance for enterprises to promote its brand name and find new counterparts and new markets for the company Taking part in fairs helps affirm the brand name and product’s quality to consumers It is also an opportunity for the company to find against counterfeit products when in each fair, the company has its kiosk to explain the consumers about the way to recognize to avoid buying counterfeit products Some of the prestigious fairs that are effective in goods promotion are Western China International Fair (held in Chengdu City, Sichuan Province on 10th May every year), Kunming Fair (Kunming City, Yunnan Province, in June), Fair China ASEAN (Nanning city, Guangxi, in October), etc V GENERAL EVALUATION ABOUT COFFEE EXPORT TO CHINESE MARKET Strengths - Vietnamese coffee has particular flavor and is cheaper than coffee of the same kind of other countries Moreover, Vietnamese coffee is evaluated by roasters in the world as to be easy for processing, especially processing instant coffee - To be strategic exporting goods, coffee enjoys preferential treatment of the State via policies on credit investment and export credit, trade promotion, as well as other supports in research and development - The constantly increasing demand for coffee in the world, especially the change in the consumption habits of Asian people including consumers in Japan and China, two of our neighboring countries with large markets The bilateral trade agreement signed by two countries (July, 2000) is an advantage for Vietnam to export coffee to such a market that accounts for a modest market share for coffee in the world but is potential as China With the strength of Robusta coffee production, and the strong growth rate of instant coffee, the coffee industry is expected to contribute USD billion to Vietnam's export in 2011 Weaknesses - The quality of our exported coffee is remained low and uneven; this is a major disadvantage of Vietnam exported coffee This is also the reason why the price of Vietnam exported coffee is much lower than that of the world and Indonesia - The oversupply in the world coffee market in recent years also makes the export of Vietnam coffee much difficult - According to statistics of the Vietnam Coffee and Cocoa Association (Vicofa), there are about 150 businesses involved in exporting coffee nationwide with the total output of to 1.2 million tons / year Of course, nothing should be discussed if this industry is strong enough; however, the problem, as being recognized by departments, is that every man for himself leading to the competition in selling and competition in buying that has adverse impacts on the general reputation of the coffee industry in Vietnam VI BASIS FOR DECISION MAKING - SWOT analysis to know the strengths, weaknesses, opportunities and threats of businesses in Chinese market - Analysis of competitive force model to know the features of the environment of Chinese coffee industry Orientation of diamond model to analyze competitive strengths  VII REFERENCES www.giacaphe.com, www.vicofa.org.vn, http://www.agritrade.com.vn: provide information about Vietnam coffee such as production status, export status, pros and cons of Vietnam coffee http://vnics.org.vn, http://www.ttnn.com.vn, www.vneconomy.vn: provide information about the features of Chinese market such as economic, political, legal status, consumption culture and habits, consumers’ features ... the economy, allowing people to express their grievance, and tolerating people who have expressed their grievance if they are believed not to be supported by other organizations Many people are... change the figure of coffee exported to Chinese market Table 1.2 Status of exporting Vietnamese coffee to Chinese market in the period 2007-2011 Quantity Increase Average Amount Increas Year (thousand... as: Penetrate into the retail system Upon entering the Chinese market, enterprises will encounter difficulties caused by the habit of drinking tea of the local consumers Therefore, it is essential