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2023-08-23
Recently, in order to support the development of Chinese enterprises' overseas markets, Guangdong's provincial-level and municipal overseas policies have been continuously optimized. Following Malaysia and Thailand, the September 2023 Overseas Chinese Fair Vietnam Intelligent Technology Exhibition is about to begin, focusing on the upgrading of Vietnam's manufacturing industry, exporting China's advanced production equipment and product accessories, as well as intelligent technology products. As one of the fastest growing countries in the global economy today, Vietnam has the fastest growth rate in digital technology and e-commerce development in the Southeast Asian region. From the trade structure in recent years, it can be seen that the largest proportion of exports is terminal products. The driving force for the development of foreign-funded enterprises in Vietnam is to utilize the relatively cheap labor resources and favorable foreign trade environment to achieve export goals. The strong demand for manufacturing development has jointly given rise to a huge demand from the Vietnamese government and various types of enterprises for China's advanced technology, equipment, overall solutions, products, and spare parts. This is an important opportunity for Chinese enterprises to go overseas. So, can LED display screens usher in new development in the Southeast market represented by Vietnam?
1. Open Southeast Asian Market Opportunities
When it comes to Vietnam, many people will refer to it as the "next world electronics manufacturing center", and this title is not groundless. Under the influence of globalization, the industrial chain of electronic manufacturing has been constantly shifting. Taiwan, China and Chinese Mainland have become the "world factories" of the electronic industry chain by relying on demographic dividends and cost advantages. However, due to trade frictions and industrial transformation in recent years, Vietnam has become one of the beneficiaries of the global transfer of electronic manufacturing industry and gradually become one of the future centers of electronic manufacturing in the world.
In 2022, Vietnam's GDP achieved explosive growth of up to 8.02%, ranking first among Asian economies. Under the strong growth momentum, funds are pouring in. Vietnam will attract foreign investment of 27.72 billion dollars in 2022, of which Chinese Mainland's investment in Vietnam ranks fourth in the world. Optimistic players are already exploring this land full of opportunities. For Chinese investors, the attractiveness of the Vietnamese market comes not only from its close geographical location and less developed markets, but also from its highly similar political system and economic development path to China. The business growth model of Run Tong in China over the past decade can provide effective experience for investors to explore in Vietnam.
It can be said that many business models in Vietnam are in the ascendant, bringing new opportunities for Chinese screen companies to go overseas. And Vietnam's development in recent years is only a microcosm of the brutal growth of the Southeast Asian market.
The reason why the Southeast Asian market represented by Vietnam can bring huge development potential to Chinese enterprises is because Vietnam and China have high similarities in many aspects. In terms of economic growth, since joining the WTO in 2007, Vietnam has undertaken the transfer of global industrial supply chains and shifted its economic model towards an export-oriented one, which is similar to China's development model from 2001 to 2010. The Vietnamese economy has maintained stable growth in the past decade, especially in 2022, where the Vietnamese national economy achieved an unexpected growth rate of 8.02%, the largest growth rate in the past 12 years.
In terms of population, the internet population of the entire 11 Southeast Asian countries is about 400 million, exceeding half of the total population
2. To snatch food from a tiger's mouth
As one of the most concerned destinations for Chinese companies to go to sea, Southeast Asia has maintained rapid development in recent years. This market has attracted 10% of global foreign direct investment (FDI) and is expected to exceed $13 trillion in GDP by 2040. Its young and large population, as well as its growing consumption capacity, make people interested in this market. Although Southeast Asia is also one of the most dispersed markets in the world, with vastly different languages, cultures, and policies, it presents new challenges and opportunities for Chinese screen companies to go global.
According to relevant data, at present, Southeast Asia has become one of the most dynamic regions in the world's economic development, and has also become a "hot spot" for investment in Chinese LED display enterprises. Among them, Vietnam is one of the important economies in Southeast Asia. Thanks to its rapidly developing market economy and continuously implementing urbanization plans, the LED display market in the country has relatively large development and investment potential.
Let's take a look at the export situation of LED display screens in the first half of this year:
In the first half of 2023, the export value of China's LED display screens to the Asian market was 2.55 billion yuan, a year-on-year increase of about 13.1%. Among them, the export value to the Southeast Asian market was 1.01 billion yuan, a year-on-year increase of about 67.2%, and the export value to the Middle East market was about 377 million yuan, a year-on-year increase of about 39.4%. The Southeast Asian and Central Eastern markets are becoming emerging markets for China's LED display screen exports. In addition, the export volume of the African region was 100 million yuan, a year-on-year increase of 9.9%; The export value of the European region was 1.15 billion yuan, a year-on-year increase of 17.6%; The export value of the Americas region was 10.1 yuan, a year-on-year increase of 0.58%; The export value of Oceania was 137 million yuan, an increase of approximately 25.3% year-on-year.
In addition, the urbanization construction process in Southeast Asia has been continuously accelerating in recent years. Taking Vietnam as an example, according to data provided by the Vietnamese Ministry of Construction, the national urbanization rate reached 41.7% in 2022, a year-on-year increase of 1.2%, and is expected to increase to 53.9% by 2023. The rapidly developing market economy and continuously implementing urbanization plans have greatly released the demand for LED display products in the Vietnamese market, and the development potential of the LED display screen market is also relatively large.
How do Chinese LED display companies compete for food? Differentiated products, lower prices, efficient services, and long-term operations are all breakthroughs. In the international market, Chinese LED display companies generally have strong products. As comprehensive competitive factors such as price and service improve, they can gradually gain market share. In addition, the complexity and variability of policies are also one of the key points that Chinese overseas enterprises need to pay attention to. For example, government policies in various countries not only constantly affect the local economic development trend, but also often have an undeniable impact on overseas enterprises. Therefore, enterprises need to pay extra attention to recent economic policies in countries such as Vietnam and Thailand. Competition from international and local enterprises also requires overseas enterprises to make decisions from a more localized perspective.
In summary, the new development direction and opportunities have opened up new paths for enterprises going to Southeast Asia.
