The Chinese coffee bean and powder market is attractive to Vietnamese businesses
With strong growth and high profit margins, the coffee bean and powder segment in the Chinese market is attracting Vietnamese businesses.
Target market of many businesses
Mr. Duong Khanh Toan – Director of international business and import-export, Me Trang Coffee Joint Stock Company said: The Chinese coffee market has grown over 10 times over the past 10 years, including both coffee segments. Instant coffee, granules, and powder all increased. However, the profit margin of instant coffee gradually decreased, while it increased in the grain and powder segments.
The reason is that instant coffee is consumed largely in the popular segment in lower-level cities, consumers in core cities still prefer coffee beans and powder. In the future, the potential of the Chinese coffee bean and powder market segment will increase very rapidly, making it a fertile land for exploitation. It is important that businesses find a suitable penetration model.
Mr. Duong Khanh Toan also said: In the coming time, the business plans to conduct product marketing, open a representative office, have employees introduce, and build the Me Trang coffee brand in this billion-people market. The business has also taken steps to prepare for export expansion by developing the ODM segment for coffee, achieving a number of necessary certificates such as Halal, FDA…
Having become familiar to Chinese consumers, Trung Nguyen coffee has achieved significant success. Mr. Wilson Li Wuqiang – Representative of Trung Nguyen Coffee Group in Shanghai, said: Initially, Trung Nguyen mainly consumed coffee through border channels and 3-in-1 instant coffee products. Currently, based on customer needs, Trung Nguyen has additional black coffee and roasted coffee products.
China is currently Vietnam’s 10th largest coffee export market. According to preliminary data from the General Department of Customs, in the first 2 months of 2023, Vietnam exported over 8,617 million USD of this product to the Chinese market.
With a large population, convenient transportation, especially in early 2023, the Chinese Government has relaxed epidemic prevention measures and reopened the market, Vietnamese businesses are quickly implementing activities to promote strong export.
Accompanying businesses, since the beginning of the year until now, the Ministry of Industry and Trade has carried out many trade promotion activities, trade connections, and organized introductions to major specialized fairs in China for Vietnamese businesses. “The Ministry of Industry and Trade is highly focused on supporting Vietnamese enterprises to export officially to China, in order to sustainably exploit the market,” said Mr. Vu Ba Phu – Director of the Trade Promotion Department, Ministry of Industry and Trade.
Diversify consumption channels
This is a very large market with diverse consumer segments, so domestic businesses are recommended to apply many different consumption methods. Citing the specific case of Trung Nguyen coffee, Mr. Wilson Li Wuqiang informed: In Shanghai, Trung Nguyen coffee is not only sold in large distribution channels but also sold in small packages at mini stores and shops. grocery and retail products with the goal of reaching the most consumers.
Besides, e-commerce is also recommended as an effective channel to access the Chinese market. Not only exporting, e-commerce is also a marketing and trade promotion channel that is economical and has good spread. With Me Trang coffee, Mr. Duong Khanh Toan said: The customers e-commerce brings to businesses are not large, high-demand markets but small, emerging markets that are suitable for supply capacity and business response. This is also identified by Me Trang Coffee as the main consumption channel in the future.
To support businesses in realizing their export orientation, leaders of Me Trang Coffee Joint Stock Company also proposed: The Government should develop and introduce more practical credit incentive policies so that businesses can exploit exploit and take advantage to boost production.
Vietnam exports to China mainly Robusta coffee, however there are also some Arabica coffee products being consumed, proving that this product has a market share but is not yet diverse in product lines. “We hope that Vietnamese businesses have needs and orient their plans to develop high-quality Arabica coffee products to have opportunities to cooperate in bringing more premium coffee products to the Chinese market” – Mr. Ton Chinh – Vice Chairman of the City Coffee Association. Chongqing, and Deputy Director of Chongqing Coffee Trading Center expressed.
For imported coffee products, China has no special requirements for product packaging, no special requirements other than certification of origin. However, for Vietnamese coffee exported to third countries from China, Vietnamese businesses need to pay attention and meet the third country’s requirements.
