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SMEs and the changing trade landscape

Jeff McLean, General Manager, UPS Vietnam

In Vietnam, small and medium-sized enterprises (SMEs) account for nearly 97 percent of all businesses. Since it started operating here in 1994, UPS has helped numerous SMEs grow and adapt their business during a period of dramatic economic change.

Take for example An Viet Long, a manufacturer of high-quality parts for remote-controlled helicopters. The company began as a humble 10-person start-up, operating out of a 100sq.m workshop in bustling Ho Chi Minh City. As Vietnam's economy opened up to trade, with the help of UPS's global network and its own broad product portfolio and technology solutions, the company grew steadily while gaining a loyal following of satisfied customers. Today, An Viet Long employs over 300 people, manufactures in a 6,000sq.m factory, and ships model helicopters all over the world.

This is just one of thousands of success stories where UPS played a crucial role in strengthening an SME's chance of growing internationally. And we anticipate these stories will only become more prevalent in years to come.

Competitiveness no longer just about cost

When the idea of competition is discussed, it often tends to be in terms of pricing. However, with the entry of countries such as Cambodia and Myanmar into the regional market, low-cost products are no longer a clear advantage of Vietnam. Though product cost is still a significant factor, Vietnamese SMEs will need to find other points of difference to compete effectively when trade barriers are lowered. Issues such as innovation, product quality and ability to keep up with customer demand will be important.

At UPS, we make it a point to sit down with our customers to discuss, map out, and understand their specific supply chains. As a result of the process, our solutions experts develop end-to-end logistics solutions strategies which bring quantifiable value to customers. The ability to guarantee delivery dates and locations, as well as provide insurance on the actual quality of the delivered product, itself is a major selling point—particularly when trading within Asia where there are significant inconsistencies in export/import processes.

Help in navigating new markets

When exporting products internationally, firms are required to comply with the standards and regulations of importing countries—many of which are completely different to Vietnam's standards and regulations. To add to this, even within the same trading bloc, the level of technology and capacity within their export/import industry can vary widely.

SMEs may find it challenging to navigate all of these regulatory issues—which is where the assistance of a 3PL comes into play. A good logistics partner will be able to advise you from the outset about the importation requirements of your destination country, along with any barriers your product may face. Furthermore, many international logistics companies have technologies and processes in place that help to overcome inefficiencies in local markets—allowing businesses to manage their customers' expectations much more effectively.

Conclusion

There is a desire both inside and outside of the region for greater trade integration, and this will present SMEs in Vietnam with opportunities that had not been an option previously. However, that does not mean that opportunities do not exist right now.

UPS is the ideal strategic logistics partner that helps businesses succeed in an evolving Asia. With a reach of over 220 countries and territories globally and over 40 countries and territories in the Asia-Pacific, we have the expertise to identify and address customers' pain points and provide you with the most viable export and import options possible.

Source: UPS