Industry news

A number of market characteristics and import demand for Australian textiles

28-05-2018

First of all, the signing of the agreement on March 8, 1818 in Chile, with a commitment to open the market, is a strong message against the current protectionist trend in the world. as well as promising to bring economic benefits to the 11 member states. The deal will create one of the world's largest free-trade areas with a market of 499 million people and gross domestic product of $ 10.1 trillion, or 13.5% of GDP. gender.

Australia is a developed economy of the G20, with a population of about 24 million, a gross domestic income of $ 1.390 billion, per capita incomes in purchasing power parities of about $ 50,000 per person per year. , is a market with considerable purchasing power and potential for textile products.

Currently, Australia is one of the important trading partners of Vietnam in the Asia-Pacific region. Trade exchanges between the two countries have grown satisfactorily in recent years. In 2017, Vietnam-Australia import turnover reached $ 6.46 billion, up 22.2% over 2016, the highest increase in seven years, of which, Vietnam's export to Australia reached 3.3 billion USD, up 15.1% compared to 2016, Vietnam imports from Australia reached 3.17 billion USD, up 30.1% compared to 2016. In recent years, Australian business community increasingly interested to the Vietnamese market and vice versa. On the occasion of the official visit to Australia by Prime Minister Nguyen Xuan Phuc on March 15, 2018, the Prime Ministers of the two countries signed a joint statement on the establishment of a strategic partnership between the Government of Vietnam and Australia.

In 2017, Australia imported about $ 9.32 billion worth of textile and apparel products from the world, including $ 173 million from Vietnam (accounting for about 1.9% of total textile and apparel imports from the world). Australia). Australia's largest imports of textiles and apparel products consist mainly of textiles of chapters (in the HS tariff table), Chapter 62 (garments and knitted or crocheted apparel 61 (garments and knitted or crocheted garments), 63 (other textile articles, rags), 57 (carpets and other textile floor coverings), 56 (quilts, fibers, nonwovens, special yarns), 54 (artificial filament yarn), 65 (hats and other headgear). Imports of these seven chapters reached $ 8.7 billion, accounting for over 90% of total Australian apparel imports. In addition, Australia imports textiles of Chapters 59, 55, 60, 67, 52, 51, 58, 66, 53, 50 with turnover from tens of millions to $ 200 million.

With Chapter 62, Australia imports $ 3.1 billion, mostly in HS 6203 (suits, uniforms, jackets, blazers, trousers, shorts for men or boys). ); HS 6204 (suits, uniforms, jackets, blazers, dresses, skirts, breeches, shorts for women and girls); and HS 6205 (boys 'or boys' shirts), HS 6206 (blouse, shirt or girl). Vietnam currently accounts for 4.3% of the import market, equivalent to $ 127 million. Competitors include China (import share 65%), Bangladesh (7.6%), Indonesia (4.3%), India (3.8%), Turkey , 3%).

Under Chapter 61, Australia imports about $ 3.09 billion, mainly in HS 6109 (T-shirts, knitted or crocheted t-shirts or hooks), HS 6110 (bundles, pullovers, buttoners). knitted or crocheted), HS 6104 (suits, uniforms, jackets, blazers, dresses, skirts, breeches, shorts for girls and girls, knitted or crocheted ), HS 6108 (dresses, bathrobes, indoor and outdoor coats for women and girls made of knitted or crocheted fabrics) and HS 6114 (knitted or crocheted apparel). Vietnam currently accounts for 2.4% of the import turnover, equivalent to $ 85 million. Competitors include: China (import market share 66.2%); Bangladesh (import market share 12.3%); Cambodia (2.5%); Indonesia (2.4%); India (2.1%); Thailand (1.4%).

With Chapter 63, Australia imports about $ 1.36 billion, mostly products in HS 6302 (bed linen, table linen, toilet linen, kitchen linen); HS 6307 (other wipes); HS 6306 (waterproof fabric, tent, sunshade ...). Vietnam currently accounts for 1.2% of import, equivalent to turnover of 13.3 million USD. Competitors of Vietnamese products are China (64% of import market share); India (9.6%); Pakistan (6.1%); Bangladesh (3.4%); The United States (3.1%), Thailand (1.3%), Indonesia (0.8%).

With Chapters 57 and 54, Vietnam does not export much to Australia. With Chapter 65 on head cap, in 2017, Australia imported about $ 208 million, of which import from Vietnam was about $ 4.7 million, equivalent to 2.3% of import. Vietnam's competitors are China (64%), United States (10%), Bangladesh (3.4%), Japan (3.1%), Italy (2.4%).

As committed in the CPTPP, Australia will reduce its import tax to 5% in the first year, the second and third years from the date of entry into force of the Agreement, and 0% from the fourth year from the date of its entry into force. For many HS 6205 products, Australian import duties will be 0% from the first year of the Agreement. At the same time, MFN import duties on these products are 10%. The reduction of tariffs on HS 6104, 6108, 6109, 6110, 6114 products is also likely to be zero in the fourth year. For HS 6302 items, the import duty will be 0% on the whole in the fourth year, and items with HS 6306 and HS 6307 will be 0% from the first year of the Agreement (MFN tax). is 5%). Information on Australia's tariff commitments can be found at VCCI's WTO Center website.

Some examples and figures show that Australia is a potential market for Vietnam's textile and garment products. Meanwhile, Vietnam now accounts for a relatively small share of Australia's import of textiles and clothing, and continues to expand.

The import value of Australian textiles in the last five years has been growing steadily, with an annual average of 3-4% a year. One advantage is that the Australian market has the advantage that retail prices of Australian goods in general and textiles in particular are much higher than prices, even with luxury goods that can be as much as 9-10 times. Vietnam prices for customers. At the moment there is a tendency for Australian firms to import and order processing in the Vietnamese market, as labor costs in Vietnam are more competitive than in China, and they enjoy preferential treatment as a whole. The two countries that are members of the AANZFTA Agreement have entered into force and in the time to come the CPTPP Agreement.
Promoting product promotion, including increased participation in trade fairs and exhibitions, is essential to increasing large contracts and increasing exports. Despite the size of the Australian market for textiles and clothing, China's textile and garment market has been overwhelmed for a long time. Over the past years, Australia's apparel import turnover from China has more than 60%. The main reason is that Chinese enterprises have access to Australian market sooner than ours, so Vietnamese enterprises are not easy to compete with Chinese origin goods. Apart from China, India is also aggressively penetrating the Australian market.

For many years now, China has always had a dedicated section within the framework of the International Textile Apparel Fair held annually in mid-November in Melbourne. At the fair, more than half of the participants were from China and one fourth from India, while few Vietnamese companies attended the event.

In order to penetrate more effectively into the Australian market, Vietnamese businesses must not only have to actively promote and market, but also understand the characteristics of the Australian market. Australian companies usually place orders with relatively small start-ups to understand the supply and market acceptability. There is a segment of Vietnamese businesses that is ignoring the Australian market for this reason. However, when initial test shipments are successful, larger contracts will be signed and export prices to Australia will outperform some other major markets. In addition, once trusted, Australian importers will be long-term, less likely to change their suppliers. Therefore, the Australian market is a potential market for Vietnam's textile and garment products and there is plenty of room for extraction.

Source of Australian textile imports