Thai businesses put strong pressure on domestic firms

Hanoi (VNA) – The Vietnamese market has drawn many Thai enterprises who are engaging in the market through different methods, which has put pressure on local firms.

One of the advantages Thai businesses have is that Vietnamese customers have long been fond of their products.

Thai enterprises have made good preparation for their penetration into the Vietnamese market by holding fairs to introduce their goods and food.

Competition from Thai products in the domestic market has grown fiercer. In the first three months of 2018, Vietnam imported nearly 2.6 billion USD worth of goods from Thailand, including 146 million USD worth of vegetable and fruits. Meanwhile, Vietnam only exported 1.3 billion USD worth of goods to Thailand.

Last year, Thailand was the largest trade partner of Vietnam among ASEAN countries with two-way trade reaching 15.11 billion USD, accounting for 30.5 percent of total trade revenue between Vietnam and ASEAN countries.

Recently, Vietnamese firms have made many efforts to export more products to Thailand, including “thieu” lychees.

According to the Ministry of Industry and Trade, although Vietnam’s exports to Thailand have increased in recent years, Thailand still has a trade surplus.

Along with promoting trade, Thai enterprises have set up production facilities in Vietnam. According to the Foreign Investment Agency under the Ministry of Planning and Investment, Thailand is the 10th largest foreign investor in Vietnam with 492 valid projects worth 9.48 billion USD.

In the first four months of 2018, Thailand climbed to ninth position, while Thai investment ranked fourth at 204 million USD.

Many big Thai players have conducted merger and acquisition deals with Vietnamese firms, leading to a concern that many Vietnamese brands will belong to Thai firms.

Specifically, ThaiBev, run by Thailand’s TCC Holdings, spent nearly 4.8 billion USD buying shares of the Sabeco company. Through F&N Bev Manufacturing and F&N Dairy Investment, the TCC Holdings bought a large number of Vinamilk’s share in the stock market. At the same time, another subsidiary of TCC Holdings, Berli Jucker, also acquired Metro Cash and Carry VN from Metro Group of Germany.

Another Thai power, the Central Group Thailand has expanded its business in Vietnam considerably in the last three years. According to the Central Group Vietnam, the firm owns 230 trade centres in Vietnam with big names such as Big C, Nguyen Kim and Lan Chi Mart, as well as two online retail channels.

Along with consumer goods, Thai businesses are present in other sectors such as construction material, thermal power and animal feed.-VNA