Is Vietnam on the map when you plan for your company’s next export market? If it is not, Swedish media Dagens Industri has specified why Vietnam should be. Economic growth in the country is among the strongest in the world and Swedish exports to Vietnam have increased by almost 6 percent by 2020 – despite the pandemic.
Dagens Industry has spoken to Emil Akander who is Business Sweden’s acting country manager in Vietnam and according to him, the fact that exports are growing is due to several factors, not least that the purchasing power of the middle class in the country is growing rapidly. Emil Akander explains that 30 million Vietnamese will belong to the country’s middle class by 2025 which is almost a doubling since 2012. At the same time, major investments are being made in infrastructure and healthcare – in the order of SEK 165 billion a year.
“Airports and the subway in both Hanoi and Ho Chi Minh City are being expanded, the road network is expanding, new hospitals are being built and major investments are being made in new energy. These are areas where Swedish companies are very strong, and this can be seen in the increased interest we are seeing from Sweden”, says Emil Akander who is supported by Johan Fredriksson, country analyst at the Swedish Export Credit Agency, EKN.
“Vietnam was one of a handful of countries whose economies even grew during the pandemic year 2020. And according to forecasts from the World Bank and IMF, continued growth is expected at levels around 6-7 percent per year,” Johan Fredriksson says to Dagens Industri.
Today, several of Sweden’s global companies are in place in the country. H&M has stores in Vietnam, and ABB, Tetrapak, Sandvik, SKF, Ericsson, and several of Sweden’s large industrial companies are also there, both to sell and produce in the country. According to Johan Fredriksson, it also opens the door for small and medium-sized companies. “There are great opportunities to establish themselves in the country as subcontractors. In addition, large international technology companies such as Samsung, LG, Intel, and Google – as well as several Apple’s subcontractors – are also in place in the country.”
There are however many challenges in entering a new market but State-owned EKN exists specifically to help Swedish export companies. They have several solutions for export companies, among other things, during the pandemic they can take 80 percent of the bank’s risk when the bank gives you a loan linked to your export. In addition, you can ensure your invoices when doing business in a market such as Vietnam.
Carl-Johan Karlsson, business area manager for SME at EKN says to Dagens Industri, “EKN’s guarantee for accounts receivable means that EKN goes in and covers the risk of you not getting paid, the guarantee normally covers 95 percent of the insured amount. This way, you do not have to be afraid to say yes to the deal but can focus on doing more business”.