Large scale partners

The Russian Federation, with a population of over 140 million people, has the 11th largest economy in the world, so the purchasing power of its people is up to 28,000 USD. Despite the large purchasing power, Russia's light industry has not been given much attention, so most consumer goods must be imported. Notably, most Vietnamese products can meet the needs of Russian consumers.

In order to exploit this market, in 2016, Vietnam and the Russian Federation signed the Vietnam - Eurasian Economic Union Free Trade Agreement (EAEU-FTA). After signing the EAEU-FTA, trade turnover between Vietnam and Russia increased rapidly, reaching 5.5 billion USD in 2021, an increase of nearly 90% compared to 2016. Of which, Vietnam's exports to Russia reached 3.2 billion USD, an increase of 100% compared to 2016.

Enterprises introduce Vinamilk milk products to Russian consumers. Photo: Hoai Nam

However, after the Russia-Ukraine conflict (February 2022), the unfavorable geopolitical-economic situation has negatively impacted Vietnam-Russia bilateral trade. Despite many difficulties, according to Director of the European-American Market Department (Ministry of Industry and Trade) Ta Hoang Linh, trade in goods between Vietnam and Russia in 2023 has had positive changes. Import-export turnover between the two sides reached 3.63 billion USD, of which Vietnam's exports to Russia reached 1.74 billion USD, up 12%. In the first 6 months of 2024 alone, export turnover to the Russian market reached 1.17 billion USD, up 44.2% over the same period last year.  

Director General of the General Department of Customs Nguyen Van Can informed that in the first 6 months of 2024, most of Vietnam's exported goods to this market increased compared to the same period last year. Specifically, textiles and garments reached 398.5 million USD, up 86%, accounting for 34% of the export proportion, agricultural products such as coffee reached 189.7 million USD, up 35.5%, cashew nuts increased 58.8%; pepper increased 98.3%; confectionery and cereal products increased 102%; rice increased 72.5%... "Currently, Vietnam is the largest coffee supplier to the Russian Federation, accounting for 31.2% of the country's imported coffee market share" - Mr. Can shared.

Recognizing the opportunity to consume Vietnamese goods that the Russian market brings to businesses, Recently, within the framework of the 33rd Vietnam International Trade Fair (Vietnam Expo 2024), Director of Vietfood DV Company (official agent for Trung Nguyen coffee brand in Russia) Do Van Phuong informed that Trung Nguyen is the coffee brand with the largest consumption in Russia, in 2023 alone, the company imported about 700 tons of Trung Nguyen coffee for consumption in this market.

Vietnamese enterprises introduce agricultural products at the Hanoi Goods Week event in Moscow organized by HPA. Photo: Hoai Nam

Similarly, Director of Foodzone Company Pham Van Anh said that over the past 6 years, the company has brought soft drinks, sauces, vermicelli, pho, and rice vermicelli produced in Vietnam, labeled Foodzi for consumption in the Russian market. "This is also a market that will help Vietnam's strong export products enter the European market in the near future," said Ms. Van Anh.

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Find ways to expand market share

Although Vietnamese goods have entered the Russian Federation market, economic experts say that in order to increase the export turnover of products in which Vietnam has advantages, Vietnamese enterprises need to carefully research the market. At the same time, take advantage of the incentives of the EAEU-FTA Agreement to invest in production and consumption of goods in Russia.

At an online discussion with businesses and organizations of Vietnam-Russia trade cooperation recently organized by the Vietnam Private Entrepreneurs Association, Vice President of the Russia-Vietnam Friendship Association Regina Budarina shared that the opportunity for goods to enter the Russian market is very open, especially agricultural products, food, and beverages. However, many Vietnamese products are not yet known to consumers in Russia, mainly because they are mainly exported as raw materials.

Agreeing with this opinion, Commercial Counselor in the Russian Federation Duong Hoang Minh said that although the Trade Office has connected many Vietnamese enterprises to export agricultural products to the supermarket chain of the Russian Federation, the number of Vietnamese goods available in the retail system is not much because the stable and long-term supply of large quantities of goods has not met the needs of partners. "To overcome this problem, enterprises need to continuously have goods in stock in warehouses (in Russia) to regularly supply to supermarket chain stores" - Mr. Minh suggested.

Enterprises introduce Vinamilk milk products to Russian consumers. Photo: Hoai Nam

In order for Vietnamese goods to exploit the Russian market extensively and limit the export of raw materials, representative of X5 Group (a group with a fairly large retail network in Russia) Tatiana Aptel shared that X5 Group currently has over 17,352 convenience stores across Russia. Currently, X5 Group is very interested in products of Vietnamese enterprises such as fresh food, tropical fruits, dried fruits, seafood, etc.

To bring Vietnamese products into the store system of consumer enterprises, Vietnamese enterprises need to take the shortest path, which is to promote trade activities and research the market. At the same time, they should study the option of transporting goods by rail to China to reduce transportation costs.

In order to support Vietnamese enterprises in exploring the Russian market and finding business partners, Minister of Industry and Trade Nguyen Hong Dien recommended that enterprises should register to attend trade fairs and exhibitions to explore the market and find customers in Russia.

“In the coming time, the Ministry of Industry and Trade will focus on researching and taking measures to support businesses to proactively organize trade promotion activities to participate in specific specialized exhibitions. For example, garments, wooden furniture, consumer goods, food, beverages, coffee, tea, mechanical engineering industry in Russia in 2024. Thereby, helping businesses increase exports to the Russian market to grow sustainably" - Mr. Dien informed.

Thuy Linh