“The price, the quality of the product are second tier factors, because in Vietnam the belief is that good marketing and strong relationships will sell everything. When we discuss market entry strategies with Polish companies, we see a lack of knowledge from both sides about the culture gap, and here is where we come in, to educate and explain. Here it takes 1 to 2 years of discussions to make the first deal, where in Europe it will probably take 2 or 3 weeks for the same deal.”
Vlad Savin: Innovation is one of the key growth drivers in an internationalized economy such as Vietnam, impacting all sectors and industries across the region. I would like to know what does innovation mean to you?
Piotr Harasimowicz: Innovation for me, for our industry where we operate as Polish Investment and Trade Office, is represented by the new technology potential and the new ideas that enter the public discourse, enabled by opportunities but also challenges in the market. For instance, under Covid-19, we see that Polish companies are thinking more and more about the Asian market, focusing on new technologies and solutions which they seek to bring in the market, especially Vietnam. Now they are trying to understand how to implement these efficiently, because the culture is different, the business environment is different and the expectations of the customers are also different, when looking at partnerships between Polish and Vietnamese companies.
Vlad Savin: Which are the top 3 innovation companies or sectors in Poland in your opinion and how can you bring more of their ideas to Vietnam?
Piotr Harasimowicz: Poland is extremely innovative in the gaming industry, and just a few years ago the total value of the gaming industry in Poland was approx. $USD 300 mil and it’s still growing. Export hits as ‘The Witcher” but others as well received many international awards in 2015, 2016 and we have other payers such as Techland, CI Games and 11 Bit Studio which created very successful projects. The sector is booming in Asia as well, the users are more and more interested in the technology, and we see other sectors leverage on the successful story of the gaming industry; I’m talking here about the e-commerce industry and the digital advertising that supports these sectors.
Smart cities solutions in Poland are a trend which is developing extremely fast, and we see a high potential in this area in Vietnam. I left Poland in 2006 and last time when I visited Poland two years ago I was impressed of how the cities’ digital structure changed, of the multitude of applications that are used for city management, starting with buses, transportation, it was almost a shock. In 2018 and 2019 we brought to Poland government delegations from major Vietnam provinces, visiting major technology hubs like Wroclaw and seeking to link these cities together with the the companies that can help implement innovative digital technologies.
Vlad Savin: What are some of the personal and business goals you have set out to achieve here at the Polish Investment & Trade Agency in Vietnam?
Piotr Harasimowicz: I’m in SE Asia since 2006 and in Vietnam for 9 years and I see the differences in cultures. We are the bridge, the moderator between these two partners. In Europe everything is visible, the law is transparent, everything is clear – we have a product, we have a price, we have a deal. But here in Vietnam, it’s totally different, everything is unexpected – the law is not as transparent as in Europe, always changing and overlapping in different provinces and cities. Most of the companies, undertake business by relations, the cast system is very visible and its applied with prevalence in commercial transactions. The price, the quality of the product are second tier factors, because here the belief is that good marketing and strong relationships will sell everything. When we discuss market entry strategy positioning with Polish companies, we see a lack of knowledge from both sides about the culture, and here is where we come in, to educate and explain. Here it takes 1 to 2 years of discussions and meetings to make the first deal, where in Europe it will take maybe 2 or 3 weeks for the same deal. That is why we have built many partnerships/MOUs with government bodies and local institutions like VCCI, ITPC and the Peoples Committee, to bridge these communication and trust differences.
Vlad Savin: What is the most important aspect about Polish Investment & Trade Agency that the business community in Vietnam should know about?
Piotr Harasimowicz: The Polish Development Fund. Let me explain. In 2016, when the Polish Government decided to separate the trade offices from the embassies, it became a much more flexible structure, focused on business only. Vietnamese and Polish business people can visit our office with no limitation, we can share with them current data and information from our experts, specialized on many sectors with deep knowledge about business in Poland and Vietnam. The feedback we received from the Vietnamese community was extremely positive, and we can notice a major change compared with the period prior to 2016.
The Polish Development Fund is linked with the Polish State Bank and we can give credit to businesses that want to collaborate, we can give them insurance facilities through the same State backed system. For instance, when Polish and Vietnamese businesses undertake a deal for the first time, we can intervene and apply an insurance policy for the deal. If a Polish company wants to invest in Vietnam through M&A or direct, we can loan them the capital or even become co-partner/shareholder in their project. We are also covering up to 80% of the cost for exhibition, marketing promotion of Polish companies and support also Vietnamese companies.
Vlad Savin: What are Poland’s strengths regarding sectors and industries and why are these relevant for the Vietnamese business environment?
Piotr Harasimowicz: In general, Covid 19 didn’t have so many negative impacts for Polish export in Vietnam, in fact in Q1 2020 we grew almost 3% yoy, in April 2020 we grew almost 10% yoy and the export from Vietnam to Poland is still stable. We see opportunities in the food sector, especially frozen meat (mostly pork – 17% of the total pork in Vietnam is coming from Poland), frozen fish, dairy products and poultry industries are doing quite well. We are going to finish soon the documents that enable Polish beef producers to enter Vietnamese market, and we can see eggs as a product gaining significant margin in the food export to Vietnam.
Vlad Savin: How can Polish and Vietnamese companies take advantage of the EVFTA and how do you foresee this implementation process taking place?
Piotr Harasimowicz: EVFTA is a progressive and comprehensive agreement, which will definitely help both sides. However, when we go through the details, we see issues with the paperwork, understanding the required certificates, product quality documents, certificate of origin etc. We need to spend lot of time to really understand the process implementation, for the first few months at least or even one year. The benefit is there, Vietnam needs to diversify its internationalized economy with Europe and the Vietnamese people like European products, therefore when there will be easy access to the market, the benefits will be significant. My recommendation to investors would be, before engaging in any deal, spend some time to understand the procedures, the customs requirements and provisions, policies, documents and choose a good logistic agent that can clear the stocks at the customs in an efficient and compliant manner.
Vlad Savin: How confident are you in the future of Vietnam on a scale of 1 to 10? And why?
Piotr Harasimowicz: Looking at the last months, I can say Vietnam did a good job. Firstly, within the domestic market the government did a great job in maintaining its position and stability. The domestic market is not strong enough to help the export companies, which target Europe and United States, however as a person living here for the last 9 years and experiencing this situation, I can see that everything was still running internally, inside Vietnam – the banking system, the production, even parts of the internal tourism.
In regard to the global market, and Vietnam’s positioning in the global trade and value chain, I can see that Vietnam is not strong enough to consume enough to maintain its GDP and growth projections, that is why the government has revived many infrastructure projects, to keep the momentum. For instance, last week the government has set up a special FDI task-force to boost and increase the confidence of the foreign investors. It is difficult to say a number, but I am confident in a good result. From a domestic perspective, I would give 10, and from a global standpoint, I would mark 8 in my confidence level in Vietnam’s future as part of the supply chain, because there are so many factors that the Vietnamese government cannot control. Overall, my confidence in recommending Polish investors in choosing a country from the region (i.e. Thailand, Indonesia, Malaysia etc) and expand their reach in the Asian market, I will give Vietnam 8.
