Supply chain strategy is “critical” for doing business in Vietnam

In a recent briefing at the San Francisco offices of law firm SNR Denton, Hong-Phong Pho, the U.S. Commerce Department’s commerce desk officer for Vietnam, Laos, and Cambodia, said shippers should approach the market with a strategic supply chain goal.

“Companies that seek sharp and clear profit objectives from quarter to quarter will not do nearly as well as those that go in for the long haul and are prepared to gather and carefully analyze information,” he said.

The non-profit California-Asia Business Council (Cal-Asia) held a breakfast briefing for American companies seeking to enter or expand existing operations in the Vietnam market. Stephen Potash, a prominent Cal-Asia member, provided SCMR with this account.

According to Pho, having a local partner who can help navigate the shoals, including dealing with lingering corruption, “will be critical.” He further advised that shippers contact the U.S. Commerce Department for assistance.

A good bit of shipping and port development has occurred in recent years and Pho said there is strong demand for additional shipping infrastructure and capacity.

“Market need translates into real opportunity,” he said.

Vietnam’s economic growth has held up well, although there is a need for the government to balance that against inflationary pressures.

He noted that since implementation of the recent bi-lateral accord, Vietnam’s exports to the US have been strong. But the U.S. government is also committed to expanding the export of American goods to Vietnam, as well as services. Trademark and copyright protection infringements are still issues with U.S. exporters, and Commerce Department strongly advises U.S. firms to register their marks in Vietnam for local protection.

One indication of consumer market growth in Vietnam, said Pho, is “teledensity,” meaning the concentration of telephone connectivity in the population, has increased from four or five percent in recent years to more than 150 percent. (This reflects the fact that some people maintain more than one telephone.)

Cal-Asia’s Executive Director, (Ms.) Jeremy Potash, pointed out that the membership-based group strongly supported the post-war renewal of commercial relations with Vietnam and has taken several trade and investment delegations into that and other Asian markets. Through regular seminars and briefings, the group provides strategic contacts and market information for U.S. companies doing business in China and the rest of Asia.

For further information, visit http://www.CalAsia.org or call 415-986-8808.

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