Rice, cashews, coffee, exotic fruits… Interested in how to source these products from Vietnam? Business Advisor Luc Groot offers tips & tricks.
Luc Groot: “Well, the first thing you need to do if you’re interested in sourcing products from Vietnam is to call us! We’ll inquire whether the kinds of products, quantity, quality and certifications are available. It is important from the start to know that we’re in it for the long term, and so should our partners be. If you’re here to make a quick buck you should look somewhere else. I do believe that you will experience a cost reduction on the long term because you cut out the middle men and their margins. But; this takes a bit of time.
I’ve noticed that some companies and small and medium-sized enterprises (SME’s) are a bit hesitant to do business with cooperatives. Especially the issues of quality often comes up; can cooperatives guarantee a steady quality? My answer is: yes, absolutely. If you choose the right ones! But selecting the right cooperatives is often a tall order for SME’s looking to source overseas. Agriterra has trusted network of cooperatives in many countries that have passed our stringent application norms.”
“We can play a role if you’re looking for an equitable relationship with farmer cooperatives that can deliver on time, deliver quality, are financially transparent and are well governed. Long term partnerships also mean that you’re able to react more quickly to changing consumer demands with your cooperative partner. For high quality products or if you have a very specific wish with regards to certifications, direct partnerships with cooperatives is also a good idea
It is crucial to have people on the ground to check and guide your cooperative partners. For many Dutch SME’s this is practically impossible because of financial considerations. Agriterra can also help your business with this aspect. We’re a trusted local partner for these farmers. And it is much more efficient than getting on a plane from Holland every few weeks.”
“Vietnam has many interesting commodities for the Dutch market: rice, cashew, coffee, tea, fruits like lychies and dragon fruit are ubiquitous. They also export a lot of spices like pepper. Cooperatives especially offer added value if the product needs to be processed quickly after harvesting, like with coffee or cashew nuts. This is because of the processing facilities that are often integrated into the cooperative model.
Doing business in Vietnam is relatively straightforward. People truly are looking to deliver what they’ve promised. What is important to realize though, is that they will always say ‘yes’ to almost any request, as a way of being polite. This also applies to negotiations and price offers. It is not that the Vietnamese are unwilling, it’s just a different culture. It can take a bit of practice to find out whether a ‘yes’ is actually a yes. You’ve got to work around it. But once you’ve established a relationship and you’ve got a bit of experience doing business in Vietnam, this shouldn’t be a problem.
Also know that Vietnam is a very competitive market because of the relative ease of doing business. Many international companies are active, companies like Nescafe, Bayer, Unilever, Tradin Organic and Nedspice. There is also the factor of rising local demand; some products are so popular in Vietnam that are not allowed to be exported. Don’t think you’re the only one or that people are ‘waiting’ for your business. But cooperatives are looking for steady, long term partners which allow them to invest in their production facilities. And if you can offer this, you’ve definitely got a leg up on the competition.”