KẾ HOẠCH XUẤT KHẨU cà PHÊ của VIỆT NAM SANG THỊ TRƯỜNG TRUNG QUỐC e

KẾ HOẠCH XUẤT KHẨU CÀ PHÊ CỦA VIỆT NAM SANG THỊ TRƯỜNG
TRUNG QUỐC
THE EXPORT OF VIETNAM COFFEE TO CHINESE MARKET

I. RATIONALE FOR CHOOSING CHINESE MARKET
China is an attractive market for agricultural products of Vietnam. China is the
3rd largest exporting market of Vietnam, after the U.S. and Japan. Customs data
reveal that China imported 137,000 tons of coffee in the period of 2007- 2011,
worth USD 365 million. Only in 2011, China imported 43,000 tons, increasing
41.9% in comparison with that in 2010. In which, 103,900 tons of coffee were
imported from Vietnam in the period of 2007 – 2011, reaching the turnover of USD
195 million, accounting for 90 % of the total coffee imported from ASEAN
countries. In the first half of 2012, China imported 15,000 tons of coffee from
Vietnam, reaching the turnover of USD 31.88 million, accounting for 96.2% of the
total coffee imported from ASEAN.
China is a growing economy in the World; in the last few years, Chinese
economy has been growing at a high speed. In the 2nd quarter of 2010, with the
dislodgement of Japan from the 2nd position in the world economic map, China has
proved its significant rebound.


USA

USA

Japan

China

Germany

Japan

Englan
d

Germany

France

France

China

England

Source: vneconomy.vn
In terms of geography, China is a neighbor of Vietnam that is useful in saving
the costs of transport and preservation during the export. In addition, there are
many similarities in the food culture of Vietnam and China. Therefore, it is easy
for us to grasp the demands of China for this commodity.
In the tendency of integration, Vietnam and China signed an agreement on the
application of sanitary and phytosanitary measures in 2008, to create initial
favorable conditions for the export of Vietnam’s fruit into China. This is the
motivation for exporting businesses to pay more attention to products’ quality and
consider quality as the most important factor for the long-term survival for any
products.
II. CHINESE MARKET
1. Economic status:
- Living standards:
China is the second largest economy in the world with the GDP (in 2009) of

Yuan 33,500 billion, GDP (PPP) of 8.7%, the second latest foreign reserve in the
world. Per capita income in China is about USD 6,000.
- Goods distribution system in China:


In the goods distribution system in China, there exists many intermediate
distribution layers from the time when a product is produced until it is delivered to
retail stores. Between the retailer and producer in China, there are an average
number of 2.21 wholesales, two times higher than that in France (0.73) and in USA
(1). It is the closed and multi-layer distribution system that makes a good has its
price significantly increased before being delivered to the end user. The retail price
in China is 48% higher than that in USA and 55% higher than that in France on
average which limits the penetration of foreign companies into Chinese market.
2. Political status:
The Government of People's Republic of China is managed by the Chinese
Communist Party; in addition, there are other eight Parties. State uses monopoly
methods to deal with challenges as well as find ways to limit differences (political
opinions) by improving the economy, allowing people to express their grievance,
and tolerating people who have expressed their grievance if they are believed not to
be supported by other organizations. Many people are satisfied with the role of the
government in stabilizing the society, creating favorable conditions for the
continuous growth of the economy.
-

Vietnam – China relationship:
The total two-way trade turnover between Vietnam and China is increasing.

China is the second largest exporting market of Vietnam, after the USA.
Vietnam and China have adopted a series of economic cooperation program
aimed at improving the legal environment, business environment and software

infrastructure for the commercial development.
3. Legal status:
After accessing into WTO, China has made commitments to the standardization
of its legal system, particularly, in the commerce and investment. To be accepted to
access into WTO, China has agreed to sign agreements on free trade, tariff
reduction and custom transparence, etc. to gradually remove trade barriers to reach


free trade with countries in the region including Vietnam. Therefore, it will create
favorable conditions for businesses to penetrate into this market.
However, like other countries, along with the cooperation in regional and
international economic forums, China also has policies to protect its domestic
production through regulations on technical barriers and regulations related to
every specific product. This is also a challenge of Vietnam exporting countries in
the way of integration and trade liberalization.
4. Culture status:
China is one of the cradles of human civilization, is a multi-ethnic country with
around 56 peoples recognized to have very diverse culture.
- Culture in consumption
In general, Chinese has such common characteristics as: they do not need
durable products but products of short life cycle of high quality, nice appearance,
perfection and utility.
III. COFFEE
1.

The supply of coffee in Chinese market
It is estimated by leaders of Chinese industries that Yunnan harvests from 22,000

to 28,000 tons of Arabica every year. This is only a small amount in comparison
with around 900,000 tons of Vietnam – the second last coffee exporter in the world.

There are few chances to increase the coffee output as farmers prefer rice, rubber or
high-priced crops.
China is producing coffee to supply a small amount to the domestic market while
mainly depending on the coffee exported by foreign suppliers. Along with Vietnam,
Indonesia, Colombia and many other countries of various brands are exporting
coffee to Chinese market.
2. The demand for coffee in Chinese market
The current consumption of coffee in China is about 30,000 to 40,000 tons/ year
with the annual increase in the demand of 10 – 15%. According to the Coffee


Association of China, coffee consumption of this country will continuously increase
and may reach 120,000 tons by 2012 if businesses provide products suitable to the
budget and tastes of the local consumers.
Each year, a Chinese only drinks 5 cups of coffee on average. Chinese drinks
little coffee. There is a huge gap between coffee and tea in China when this country
annually consumes up to 700,000 tons of tea.
3. Coffee production status in Vietnam

Up to now, the coffee industry in Vietnam has about 500,000 hectares reserved
for growing coffee with the annual output of more than 900,000 tons; 10 to 15% of
this area is owned by State enterprises (including central and local enterprises)
while the remaining 80 - 85% is owned by farmers or households or owners of
small farms.
4.

Coffee exporting status in Vietnam
The average output of exported coffee is around nearly USD 2 billion/ year,

reaching USD 2.5 billion in 2011.

Export turnover:
Table 1.1. Coffee exporting status in Vietnam in the period 2007- 2011
Year
2007
2008
2009
2010
2011

Quantity

Increase

Average

Amount

Increase

(thousand

rate (%)

price

(billion

rate (%)

tons)

950
954
980
884
1200

+2.1
+2.7
- 5.2
+53.2

(USD/ton)
USD)
1768
1.8
2044
1.95
+7.7
1800
1.764
-10.5
1650
1.7
-3.7
1503
2.5
+32
Source: Vietnam national coffee

It can be seen from table 1.2 that the turnover of coffee exported to China only

accounts for around 1.5% of the total turnover of coffee exported to the world
market. The reason for the limited consumption of coffee of 1.6 billion Chinese is


the habit of drinking tea. However, this habit is gradually changing and this is a
good chance for us to change the figure of coffee exported to Chinese market.
Table 1.2. Status of exporting Vietnamese coffee to Chinese market in the
period 2007-2011
Quantity

Increase

Average

Amount

Increas

Year

(thousand

rate (%)

price

(billion USD)

e rate

2007
2008
2009

tons)
14179
14074
14627

19.7
-

(USD/ton)
1768
2044
1800

24615000
32000000
24732000

(%)
+30
-

22586000
29361000

22.62
-8.68

+29.01

2010
2011

13194
17910

16.87
- 1.17
28.22

1650
1503

Source: Vietnam national coffee
IV. PLAN ON COMPETITION
To be able to compete in the Chinese market, enterprises should pay attention to
methods to penetrate and establish a position in this market such as:
1. Penetrate into the retail system
Upon entering the Chinese market, enterprises will encounter difficulties caused
by the habit of drinking tea of the local consumers. Therefore, it is essential for
enterprises to find suitable ways to approach the end users to help them have a habit
of drinking coffee.
Travelling by train is the daily habit of Chinese, from ordinary people to
merchants. Initially, businesses should penetrate into the retail system on train by
inviting passengers to try their products. The trial can make passengers gradually
like the product and they can introduce to people they know. Accordingly, coffee
products can approach Chinese consumers, particularly, young ones.
2. Penetrating into supermarkets in China

Only by officially penetrating into the supermarket system of China, can
businesses control the output. Therefore, businesses need to negotiate and sign
contracts with big supermarkets to put their products into this distribution channel.
In order to increase the consumers’ awareness of the product and the consumption
volume, businesses should implement programs on product trial, promotion and gift
offering. Moreover, businesses should make specific packages for each product sold
in Chinese supermarkets along with registering for brand recognition in this market
to avoid counterfeit products.
3. Establish agents to sell products
Agency development is one of important factors in the policy on diversification.
It contributes to widely introducing companies’ products in a wide range of markets
to each end user to increase the goods output and annual turnover.
With a market of billions of people and millions of small and big brands such as
Chinese market, it is difficult for businesses to immediately gain a large market
share. Enterprises should know their own abilities to find a right target market to
have customers’ support of customers to gradually establish a network of
commodity distribution.
4. Actively take part in fairs for the brand promotion
Fair is a good chance for enterprises to promote its brand name and find new
counterparts and new markets for the company. Taking part in fairs helps affirm the
brand name and product’s quality to consumers. It is also an opportunity for the
company to find against counterfeit products when in each fair, the company has its
kiosk to explain the consumers about the way to recognize to avoid buying
counterfeit products.
Some of the prestigious fairs that are effective in goods promotion are Western
China International Fair (held in Chengdu City, Sichuan Province on 10th May every
year), Kunming Fair (Kunming City, Yunnan Province, in June), Fair China ASEAN (Nanning city, Guangxi, in October), etc.

V. GENERAL EVALUATION ABOUT COFFEE EXPORT TO CHINESE
MARKET
1. Strengths
- Vietnamese coffee has particular flavor and is cheaper than coffee of the same
kind of other countries. Moreover, Vietnamese coffee is evaluated by roasters in the
world as to be easy for processing, especially processing instant coffee.
- To be strategic exporting goods, coffee enjoys preferential treatment of the
State via policies on credit investment and export credit, trade promotion, as well as
other supports in research and development.
- The constantly increasing demand for coffee in the world, especially the change
in the consumption habits of Asian people including consumers in Japan and China,
two of our neighboring countries with large markets.
The bilateral trade agreement signed by two countries (July, 2000) is an
advantage for Vietnam to export coffee to such a market that accounts for a modest
market share for coffee in the world but is potential as China.
With the strength of Robusta coffee production, and the strong growth rate of
instant coffee, the coffee industry is expected to contribute USD 3 billion to
Vietnam's export in 2011.
2. Weaknesses
- The quality of our exported coffee is remained low and uneven; this is a major
disadvantage of Vietnam exported coffee. This is also the reason why the price of
Vietnam exported coffee is much lower than that of the world and Indonesia.
- The oversupply in the world coffee market in recent years also makes the
export of Vietnam coffee much difficult.
- According to statistics of the Vietnam Coffee and Cocoa Association (Vicofa),
there are about 150 businesses involved in exporting coffee nationwide with the
total output of 1 to 1.2 million tons / year. Of course, nothing should be discussed if
this industry is strong enough; however, the problem, as being recognized by

departments, is that every man for himself leading to the competition in selling and
competition in buying that has adverse impacts on the general reputation of the
coffee industry in Vietnam.
VI. BASIS FOR DECISION MAKING
- SWOT analysis to know the strengths, weaknesses, opportunities and threats of
businesses in Chinese market.
- Analysis of 5 competitive force model to know the features of the environment
of Chinese coffee industry.
Orientation of diamond model to analyze competitive strengths.



VII. REFERENCES
1. www.giacaphe.com, www.vicofa.org.vn, :

provide information about Vietnam coffee such as production status, export
status, pros and cons of Vietnam coffee
2. , , www.vneconomy.vn: provide

information about the features of Chinese market such as economic, political,
legal status, consumption culture and habits, consumers’ features.