As global markets continue to evolve, Vietnamese enterprises are increasingly setting their sights on the burgeoning Halal sector. With its rich growth potential, this market offers significant opportunities for Vietnamese exports. DDA Vietnam, a company specializing in organic products, is one of the front-runners in this endeavor, actively seeking Halal certification to export its organic calcium products, derived from chicken eggshells, to the Middle Eastern market. This strategic move underscores the growing interest and potential for Vietnamese exports in the global Halal arena.
The Current Landscape of Vietnamese Exports in the Halal Market
Recent data indicates that around 60 provinces and cities in Vietnam have engaged in exporting products to the global Halal market. However, the number of Vietnamese enterprises with Halal certification is still limited, with approximately 1,000 companies currently holding this crucial designation. This limited certification highlights both the challenges and the competitive nature of the Halal market. While Vietnam has a wealth of advantages, including abundant raw materials and a favorable geographical location, its role in the Halal market remains relatively modest. The country’s current exports predominantly consist of agricultural products and raw materials, positioning Vietnam as a minor player among global suppliers.
The Halal market, which adheres to strict religious and quality standards, is relatively new for many Vietnamese businesses. Despite Vietnam’s potential, many domestic enterprises are unfamiliar with the intricacies of Halal certification and market requirements. This unfamiliarity presents both a challenge and an opportunity for growth.
Exploring the Global Halal Market Potential
Nguyen Minh Phuong, a representative from the Department of Asia–Africa Markets under the Ministry of Industry and Trade (MoIT), highlights the immense potential of the global Halal market. With approximately 25% of the world’s population identifying as Muslim, the market for Halal products is substantial, with an estimated total trade value of around $2.3 trillion. This figure reflects the growing demand for Halal-certified goods, which spans various sectors including food, cosmetics, pharmaceuticals, and fashion.
Halal products are known for their premium pricing, often 5-10% higher than their non-Halal counterparts. This price premium is accepted by consumers who prioritize Halal certification for religious or personal reasons. As such, the demand for Halal products continues to rise, driven by both consumer preference and increasing market size.
Challenges and Strategies for Vietnamese Exporters
For Vietnamese businesses aiming to tap into the Halal market, understanding and adapting to market dynamics is crucial. Experts stress the importance of gaining accurate knowledge about market trends, religious practices, and consumer preferences. Successful entry into the Halal market requires compliance with specific standards related to product packaging, labeling, and advertising.
Le Chau Hai Vu, a consultant specializing in Halal food quality, emphasizes the need for businesses to thoroughly understand market demands and consumer behavior. This includes adapting to local consumption cultures and ensuring that products meet Halal standards. Proper adherence to these standards not only facilitates market entry but also enhances the credibility and acceptance of Vietnamese products in the Halal market.
Practical Guidance for Exporters Entering the Halal Market
Tran Trong Kim, the Vietnamese Trade Counsellor in Saudi Arabia, offers practical advice for companies looking to enter the Halal market. He recommends conducting comprehensive market research to understand the regulations and quality management practices of target countries. For transactions with importers in the Middle East, Kim advises using letters of credit (LC) with a deposit to secure deals and reduce risks. He also warns exporters to avoid pre-paying fees related to contract brokerage or invoice issuance, as such practices are often associated with fraudulent schemes.
Kim’s insights highlight the importance of vigilance and due diligence in navigating the Halal market. By adhering to best practices in financial transactions and understanding local regulations, Vietnamese exporters can better position themselves for success.
Government Support and Strategic Initiatives
Recognizing the potential of the Halal market, the MoIT is developing initiatives to support Vietnamese exporters and producers. One such initiative is a project aimed at boosting exports of Halal products by providing resources and assistance to businesses. Additionally, the National Trade Promotion Programme serves as a platform for companies to engage in trade promotion and networking activities within the Halal market.
These government-led efforts are designed to address the challenges faced by Vietnamese exporters and to facilitate their entry into the Halal market. By providing support and creating networking opportunities, the government aims to enhance Vietnam’s competitive edge in this growing sector.
Strategic Focus for Sustainable Growth
Assoc. Prof. Dr. Nguyen Thuong Lang from the National Economics University emphasizes the need for Vietnam to focus on effectively and sustainably exploiting the Halal market. This involves leveraging the country’s strengths, such as its rich natural resources and strategic location while addressing existing challenges. A strategic approach to market entry, including thorough market research and adherence to Halal standards, will be key to Vietnam’s success in this sector.
Vietnam’s foreign trade development strategy should prioritize the Halal market, ensuring that businesses are well-equipped to navigate its complexities. By focusing on sustainable growth and capitalizing on market opportunities, Vietnam can enhance its presence in the global Halal market and contribute to its economic development.
The global Halal market offers significant opportunities for Vietnamese exports, with potential for growth and diversification. As Vietnamese enterprises like DDA Vietnam strive to enter this market, understanding Halal certification requirements, consumer preferences, and market regulations is essential. With government support and a strategic focus, Vietnam can expand its footprint in the lucrative Halal sector. This evolving market not only promises economic benefits but also highlights the importance of cultural and market adaptability in international trade. By embracing these opportunities, Vietnam can position itself as a key player in the global Halal market and drive its export growth.
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