Importing from Vietnam to Australia: The Ultimate Guide + Vietnam Top Commodities
October 30, 2023 Uncategorized
Vietnam is one of the world’s success stories when it comes to economic development. Originally one of the poorest nations in the world, it has now become the third largest market in Southeast Asia with its 2021 GDP reaching more than $352 billion USD. Vietnam is an important trading partner to Australia. As the Southeast Asian export powerhouse continues to rely on Australia for supplies of raw materials and services, Australian consumers also continue to enjoy the high-quality products from Vietnam.
If you’re a business looking to import goods from Vietnam into Australia, then you’re in the right place. In this article, we’ll take a look at what the Vietnamese market has to offer, its primary imports and how your goods can be shipped to and from Vietnam.
Generally doing business with Vietnam
When doing business with Vietnam, knowing about the country’s culture and traditions is crucial to building and maintaining a strong reputation in the Vietnamese market.
The Vietnamese are strong believers in Confucius’ teachings, giving emphasis to the significance of obligation, responsibility, and most importantly, relationships. The business culture in the country is strongly relationship-oriented, so it’s important to know that trust is the key to good business. Make sure to act on your word and always keep your promises.
What the Vietnam market offers
Vietnam is one of Australia’s significant trade partners, with our Southeast Asian neighbour continuing to prioritise economic cooperation with Australia. In 2021, the two countries recorded a figure of $12.4 billion USD in trading, a 50% increase year on year.
Vietnam is known as a prime location for several industries. This includes not only textiles, but also some of the world’s key players in technology – companies like Nokia, Samsung and LG Electronics have made billion dollars worth of investments in Vietnam. Some of the country’s primary exports include machinery, textiles, phones, computers, footwear and electronic goods.
Below, we’ll look at some of the key imports coming out of Vietnam,
Key Imports from Vietnam
In 2021, Australian imports from Vietnam amounted to $5.37 billion USD as reported by the United Nations COMTRADE database on international trade. So what are the top commodities that the Australian market import from Vietnam, contributing to this amount?
Electrical machinery, and equipment: US$111.3 billion (33.8% of total imports)
Electrical items and equipment are the topmost import from Vietnam. Most of the electrical machinery being produced are consumer goods which are usually manufactured in the Northern provinces of Vietnam. Meanwhile, the company Intel has made considerable investments in Vietnam – including $475 million in its Vietnamese testing facility.
Machinery including computers: $28.8 billion (8.8%)
Vietnam has become a global hub for the production of computers and related components. The country is known to be strong in midstream activities of machinery. This means that Vietnam is recognised for manufacturing and assembling products like smartphones, laptops, and TVs for multinational companies such as Samsung, TCL, and Hitachi.
Plastics, plastic articles: $18.9 billion (5.7%)
Vietnam’s imports of plastics and plastic articles in the first quarter of 2022 have reached 1.39 billion USD which is a 28.9% higher than the amount attained in during the same period in 2021. This high turnover of plastic imports is brought by the increasing demand from large markets such as US and Japan.
Iron, steel: $14.2 billion (4.3%)
Remarkably, the imports of iron and steel have experienced significant increases of more than 500% year on year. In quarter one of 2022, Vietnam exported finished steel products by up to 75.41%. This includes hot-rolled iron or non-alloy steel products, iron or steel crap, and flat-rolled other alloy steel products. Analysts report that the Vietnam market for iron and steel is expected to become the fastest growing market in the world.
Optical, technical, and medical apparatus: $10.6 billion (3.2%)
Vietnam is also a top choice when it comes to optical, technical, and medical apparatus imports. In fact, the country is the 9th largest medical device market in the Asia-Pacific region. Ninety percent of these medical apparatus imports include surgery equipment, emergency resuscitation testing equipment, and diagnostic imaging equipment. Foreign-owned hospitals are large purchases of these products.
Mineral fuels including oil: $9.8 billion (3%)
Mineral fuels including oil also comprise the top goods imported from Vietnam such as petroleum gases, coal, and petroleum oils. The country exported approximately 3.1 million tons of crude oil in 2021.
Vehicles: $9.4 billion (2.8%)
Vietnam is a large producer of motor vehicle parts and accessories, motor cars, vehicles, and trailers. The country has become increasingly competitive in manufacturing and assembling high-end vehicle models such as electric vehicles which is a growing consumption trend.
Knit or crochet fabric: $7.6 billion (2.3%)
Knit or crochet fabric are also part of Vietnam’s top imports. In fact, the country has become the 34th largest exporter of crochet textile fabric as its export market continues to grow fast. This includes the markets of Indonesia, Mexico and the United States.
Organic chemicals: $5.4 billion (1.6%)
Organic chemicals are also a top Vietnamese export. These are usually oxygen-function amino compounds, heterocyclic compounds with oxygen hetero-atom only, and saturated acyclic monocarboxylic acids.
Cotton: $5 billion (1.5%)
Last but not the least, Vietnam is also a top exporter of cotton. The primary product categories are usually exported are pullovers, knitted cotton sweaters, and other clothing articles. As robust demand for cotton from large export markets such as the United States and China persists, Vietnam continues to increase its production and consumption as well.
Shipping methods to and from Vietnam
Importing goods from Vietnam to Australia requires deciding between two methods of transportation that will suit your business most appropriately: air freight and sea freight.
Ocean Freight Services
Shipping your goods from Vietnam to Australia via the ocean will definitely cost you less. It costs less than shipping by air but can take longer to arrive. This method is best when transporting bulky and heavy items.
General Transit Times
Cargo transported from Vietnam via ocean freight usually takes 18 to 30 days to arrive in Australia. This is dependent on various factors including the type of shipping container hired out and weather conditions at sea.
Certainly, shipping goods from Vietnam via air freight typically takes less time than ocean freight. But this method relatively costs higher than shipment by ocean.
General Transit Times
Shipment usually takes one to six days before arrival depending on the pick-up area, delivery points, and inland transportation required.
You can read more here about air freight and sea freight, and which type of transport is right for you.
Getting the documentation correct
Importing from Vietnam (and from any other country in the world) requires a lot of documentation. It is integral that all this documentation is correct. This will help create a smoother flow of transactions when importing from the country. So it’s critical to ensure you have each of the following documents:
A commercial invoice is one of the most important documents in shipping, showing essentially the shipping terms that have been agreed upon between the parties. It shows the quantity and description of the items/goods, the loading and destination port, method of transportation, the country which the goods originated from, and cost of goods. This document is required by customs authorities as it will be used to assess import taxes and duties.
Another document that needs to be completed is a packing declaration. This document provides information to Australian customs authorities about the material used to pack the goods. A packing declaration usually includes the declarations stating whether the packing material contains ‘unacceptable material’ and the items are clean and animal and/or plant material free.
A packing list is a list that provides the contents of a package. Hence, it typically shows the measurements, weights, and detailed list of goods inside the package. It is not usually required. However, it can help during customs clearance in Australia. This list will also help you check whether the correct number of items have arrived.
A Certificate of Origin (COO) is a form of declaration that provides details about the country from which the imported goods originate. This certification should show a government authority confirmation that states that the goods being shipped were manufactured in a particular country. A COO, which may be valid for up to one year, is applicable to a single shipment. It can cover one or more goods. However, it should not exceed 20 unique items.
Vietnam-Australia Free Trade Agreement
There is no bilateral trade agreement between Vietnam and Australia. The two country’s trade relations are underpinned by a number of multinational agreements, including the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) and the Regional Comprehensive Economic Partnership Agreement (RCEP)
In 2020, over 90% of tariff lines from Australian imports to Vietnam were tariff-free – covering over 99% of Australian exports to Vietnam. This means that under AANZFTA, specific goods have absolutely zero tariffs at entry when being exported or imported.
There is also an increased certainty of legal protections for investors from Australia when pushing through investments in ASEAN nations like Vietnam. This includes the provision of a robust investor-state dispute settlement mechanism.
With the strong complementarity in the trade structure between Australia and Vietnam, it is highly likely that more opportunities will arise from the free trade relationship of the two countries.
You can read more about Australia’s free trade agreements here.
Interested in importing? Get in touch with us.
Looking to bring goods from Vietnam to Australia for your business? We’re here to assist you with the process and see your business grow. The team at ICE Cargo have a strong network of partners in Vietnam, and our native-speaking staff can make direct contact with both your suppliers and buyers across the country.
With our unrivalled service and expertise in cargo movements, customs clearance, transport, distribution and all areas of logistics, our customs brokers and freight forwarders are well-positioned to seamlessly move your cargo in the most cost-effective way possible.
Get in touch with us or submit a query below.
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