11.01.2022, 17:51

VinFast cars rolling in Netherlands and lessons for agricultural exports

VinFast cars rolling in Netherlands and lessons for agricultural exports

VinFast cars were first launched in Europe. Photo: TGCC.

We cannot deny the attraction of electric cars in recent years. It is not an exaggeration that electric cars will become a new trend and can replace the traditional ones using fuel.

In the Vietnamese market, VinFast is proud to be a pioneer in producing electric cars. In the near future, VinFast will export its products to new markets such as the Netherlands and Europe.

Questions are nearly answered

In July 2022, the first VinFast cars will appear in Europe in general, and the Netherlands in particular. By November 2022, VinFast will officially show off its models in these markets. It is actually not a surprise to foreign consumers.

In early 2018, the Vietnamese brand introduced its first two models, VinFast Lux SA2.0 and A2.0 at a Paris trade fair. Despite being identified as a copy of the BMW X5 and 5-series, about 25,000 of these products have been sold. This has proved the interest of Western consumers for the Vietnamese car company.

Interestingly, the Chinese luxury electric car model that has attracted a lot of attention will also be officially sold in Europe at the same time. So, what will be the attitude of Dutch potential customers towards these two models? Can Vietnam's VinFast cars compete with foreign products? Is “Made in Vietnam” popular in Europe?

In the context that both VinFast models from Vietnam and China are offered for sale at the same time, consumers' impressions on them will be different.

The image of Vietnam in the eyes and thoughts of Europeans is a beautiful country with friendly and diligent people. However, Vietnam is also an underdeveloped and backward country of which most products are from agriculture and rudimentary industry not yet able to catch up with world trends.

Such initial views about Vietnam had made a majority of Europeans welcome Vietnam's VinFast car products with a curious and somewhat respectful attitude. A goodwill attitude of consumers is a good sign for the launching of the product but still not enough for it to conquer the market.

A VinFast electric car was first announced in the Netherlands. Photo: TGCC.

The challenge is that we should not follow in Chinese footsteps or it will affect Vietnamese brands.

Personally, I have worked in the field of trade, import, and export between the Netherlands and Vietnam for nearly 12 years. I believe and hope that we will not do the same (like China). Creating and preserving the prestige and brand of a country is the responsibility not only of a corporation, even if that corporation is at the top of the country, but also of all businesses, even each individual in that country.

Up to now, the quality of VinFast cars has been confirmed through its attractiveness in domestic markets and the number of loyal consumers. We have reasons to believe that VinFast and its car lines will help Vietnam strengthen and promote its brand name, bringing "Made in Vietnam" products closer to world consumers, and in this case, it is specifically the Dutch market.

Solutions for Vietnamese products entering European markets

For competitive strategy, what is the right direction in the Dutch and European markets? Although Chinese goods appear everywhere, most of them are manually manufactured and outsourced without brand names for some well-known EU and US firms; or have to accept fierce price competition.

An important factor for consumers when deciding to buy a product is "Pride" because they will spread this “Pride” far and wide, to create a community for those who use the same product. This pride is built mainly on a "brand story". Sometimes, they buy the product simply because they want to be part of that “brand story” and experience the feeling of sharing.

On the contrary, when buying cheap products with average quality, consumers will have no or very little “pride” to spread this product or encourage others to buy it. Especially for European consumers who have a high living standard and stable income, most of them tend to look for quality products and good brand names instead of saving to buy cheap but not with quality.

Therefore, price competition is always a difficult and sometimes unwise choice for some products and customers. To find a suitable direction for the strategy, it takes more analysis and experience than just focusing on cheap prices.

Rice and coffee that Europeans or Dutch people are still using every day with foreign brand names are very likely originated from Vietnam. Products with the label "Made in Vietnam" are almost absent in the Dutch people's subconscious. Vietnam's lychee was exported at about 1 - 2 EUR/kg but when it reached the Netherlands, the price was up to 15 - 18 EUR/kg and it was only sold in Asian supermarkets, not in Dutch natives’ supermarkets.

Lychee cost about 12 EUR/kg at the cheapest in a Dutch supermarket. Photo: TGCC.

The price of Vietnamese products is often forced to very low when exporting to the Dutch or EU markets under the "Made in Vietnam" label mainly because a majority of Vietnamese exporters have to go through many intermediary channels that make the price be quite high when reaching the consumers.

Some exporters only have a short-term business plan without listening to feedback from consumers so that to have a strategy to increase product value meeting market demand in reality. The situation of Vietnamese agricultural products is an example. When the harvest is good, the price is lo but when the crop is bad, the price is high. Orders are irregular and not long-term, making farmers unable to have a suitable production plan. This is why our competitive advantage is lost.

There is no universal formula for all products’ export and import activities. Enterprises need to have the right strategy to be suitable for consumers' demands in the targeted markets. Specifically, in the European market, the consumption habits and customers’ feedback on different products are also different.

To properly understand and get the right direction, business enterprises need a consultant partner who has lived, worked, and really understands the commercial culture in the Netherlands in particular and Europe in general. At the same time, the consulting company should have relationships and experience in the field of import and export, so it can support and closely cooperate with the enterprises with necessary without through other intermediaries. This will help them reduce business risks to a minimum and shorten investment time and cost.

Author: Nhu Nguyen

Translated by Linh Nguyen