Only 21% of Vietnamese SMEs join global value chain

A forum on supporting SMEs in joining the global value chain was jointly held by the Vietnam Chamber of Commerce and Industry (VCCI) and Facebook in Hanoi on October 19.

At the forum (Photo:
At the forum (Photo:

Speaking at the forum, Deputy Director of the SMEs Promotion Centre of the VCCI Tran Thi Thanh Tam said that the fourth industrial revolution, which is digitally based, can help SMEs to purchase goods and services in global value chains, opening up market access, attracting foreign investment, and accessing advanced production technologies.

However, most SMEs lack international customers and markets and only 21% of Vietnamese SMEs participate in the global value chains, she added.

SMEs were expected to have great opportunities to enter the global market in the digital economy, she said, noting that SMEs should take advantage of digital applications and minimise logistical and transactional costs by using the powerful tools of social media.

According to Le Ha, a representative from the Ministry of Industry and Trade’s Department of E-commerce and Digital Economy, in order to join the global value chain, e-commerce is an indispensable business. Currently, e-commerce in Vietnam is growing steadily and is forecast to reach US$20 billion by 2020.

The Ministry of Industry and Trade has deployed specific policies to develop e-commerce, helping businesses to access the global value chain, she said.

Phan Anh, an expert on Online Marketing said that SMEs, which make up 90% of businesses in Vietnam, should take advantage of new marketing tools such as social media in order to gain access to global value chains.

Vietnamese SMEs often encounter difficulties in accessing capital and technologies and lack management skills and connectivity, which are major hindrances when joining supply chains.

Links among producers and distributors in supply chains are weak and have created unhealthy competition, making it more difficult for Vietnamese enterprises to join large markets.

Although the Government has stepped up its reform of institutions and has improved the business environment, experts said that it should minimise administrative procedures to help firms to join supply chains.