Vietnam has gained importance as an international sourcing market. However, this comes with challenges. Export Portal’s blockchain-based trading system provides solutions.
Vietnam has gained importance as an international sourcing market. However, verifying the origin of goods and frequent changes in business law are challenges for Vietnam’s trading partners. Export Portal’s blockchain-based trading system provides solutions.
Coffee, furniture, electronics, cashew nuts, clothing – Vietnam’s exports have doubled over the last five years. Exports were at an all-time high in 2018. The country is the world’s second largest coffee exporter and is among the top five textile exporters globally.
Vietnam has become an attractive sourcing market. The country is undergoing rapid economic growth, with a GDP growth rate higher than 7 percent in 2018.
The country has also been touted as a possible winner in the U.S.-China trade war, because of low-cost manufacturing. Currently, labor costs in Vietnam are 50 percent of those in China and around 40 percent of those reported in Thailand and the Philippines.
But despite Vietnam’s attractiveness, purchasing goods from Vietnam comes with challenges.
Supply chain provenance
Foreign buyers face difficulties when verifying the origin of goods purchased in Vietnam. Sometimes it’s even hard to confirm that products were manufactured in Vietnam.
This could become more problematic in the near future, as Chinese manufacturers might use Vietnam to bypass U.S. taxes imposed during the trade war.
Export Portal’s blockchain-based trade portal provides solutions. All relevant information is shared between producers, sellers and buyers directly via a private blockchain. The system’s verification process will conduct a background check and verify products on behalf of the buyer, preventing counterfeit and ensuring legal compliance.
Frequent changes in business law
Sudden changes in business law and trade regulations are common in Vietnam. Frequent legal changes increase the risks for foreign trading partners, especially as changes are often inconsistent with international best practices, says Adam Sitkoff, Executive Director of the American Chamber of Commerce in Hanoi.
That’s why Export Portal’s ecosystem provides country specific up-to-date import and export trade documentation. The service also includes legal assistance in all countries and updates on international laws and regulations.
Export Portal is no stranger in Vietnam
As Vietnam’s importance in international trade is increasing, it has become part of Export Portal’s worldwide expansion strategy.
In early 2018, Ally Spinu, CEO of Export Portal, and her team spent a week in Vietnam to meet with businesses and government leaders to discuss opportunities for cooperation.
"Machinery and automation are replacing farmlands across Vietnam and contributing to the nation's foreign trade and foreign affairs. Export Portal understands the innate desire to compete on the world stage and offer an alternative to rising manufacturing costs from other countries. We want the best of Vietnam to be a part of our success story," says Ally Spinu.