Thai goods have a great advantage in terms of competitiveness in the Lao market due to cultural similarities and good product quality.

Laos belongs to the group of developing countries and is a market that is attracting investment and access from many countries, including Vietnam. Regulations on goods and product quality standards are not too high. Laos accepts most certifications from countries exporting goods to this country. Moreover, to serve domestic consumption activities, Laos imports many Vietnamese goods.

Statistics from the Ministry of Industry and Commerce show that during the first five months of 2022, trade between Vietnam and Laos totaled 708.2 million USD, of which 247.2 million USD was exported from Vietnam to Laos. Products made of iron and steel, vehicles and spare parts, machinery, equipment, tools, other spare parts, fertilizers of all types, plastic goods, and vegetables are among Vietnam's top exports to Laos.

Although there are many advantages for export, Vietnamese goods are currently weaker than Thai products in the Lao market. The reason is explained by Ms. Le Thi Phuong Hoa - Commercial Counselor, Vietnam Trade Office in Laos: The geographical location of Laos and Thailand is very close to each other, from the northeast of Thailand to the capital Vientiane of Laos can travel during the day. The south of Laos is close to the provinces of Thailand, which is convenient for shipping with low cost and fast time.

At the end of 2021, the Laos - China high-speed railway has been put into operation, goods transported to Northern Laos are more convenient, so Thai goods are popularized faster. While Vietnamese goods want to go to Northern Laos, they have to go from the border to the capital Vientiane, then they can use this railway to transport. Thus, Vietnamese goods were 1 beat slower than Thai goods.

With this railway, moving from the capital Vientiane of Laos to the Laos-China border gate takes just over three hours, transporting goods is very fast and cheap. Vietnamese goods, in addition to competing with Thai products, also face the risk of competing with cheap Chinese goods. Currently, China is implementing a zero Covid policy, the level of competition is not high, but when this country controls the epidemic and opens its doors, Vietnamese goods will surely meet a "heavyweight" competitor.

On the other hand, Lao and Thai languages ​​are quite similar. Lao people watch Thai TV channels and Facebook regularly, so there is a closeness and easy to understand. Moreover, the marketing and sales strategy of Thai businesses is very flexible, and the distribution channel is professional. For example, in Vietnam, where there is a BigC supermarket system, in Laos, there is a BigC mini supermarket chain that meets the right segment and consumption capacity of the Lao people.

The distribution system of Vietnamese goods in Laos has not been paid attention, the goods are still mainly sold at a number of small stores. "There are now businesses investing in the Vmart supermarket chain in Laos, but there are not many Vietnamese goods sold in it, Thai products still dominate due to the price advantage," Ms. Hoa said.

According to Ms. Hoa, in the past, Vietnamese people did a lot of business in Laos, which was a channel to sell Vietnamese goods, but during Covid-19, people returned to Vietnam to avoid the epidemic. When the epidemic stabilized, the people who came back faced difficulties because of the high cost of entry and the expensive stay.

On the other hand, the low population density, after two years of epidemic effects plus the Russian-Ukrainian conflict, made fuel prices in Laos high and scarce, leading to rising consumer prices and rising inflation. This makes it even more difficult for people to bring Vietnamese goods to the Lao market.

Despite many challenges, the representative of the Vietnam Trade Office in Laos still affirmed that Vietnamese goods have the ability to expand exports to Laos. To do this, businesses need to understand the consumption habits and culture of Lao people.

Accordingly, in order to solve the problem of language differences, when going to Laos, goods need to be stamped and labeled in Lao language so that consumers can read the product's name, uses, and how to use the product. This is also to meet the provisions of the Law on Consumer Protection of Laos: Goods circulating in the country must be labeled in Lao language, specifying the type of goods, brand, place of production, raw materials, etc. importer, distributor, country of manufacture, price, expiry date; logos of products and goods circulating on the market are regulated by the Ministry of Culture and Information.

Businesses also need to make a brand to eat into the consumer habits and create prestige and trust with Lao consumers.

In the search for new partners, the representative of the Vietnam Trade Office in Laos suggested: Enterprises participate in trade fairs to promote trade and not only participate in national-scale fairs but should also participate in fairs. The local level will help Vietnamese goods penetrate deeper into the lives of Lao people.

For interested businesses that do not have the conditions to go to Laos to promote their products, the Vietnam Trade Office in Laos periodically compiles a list of businesses and sends it to the focal agencies of Laos to inform businesses in the host country..