How USAID is Expanding Economic Opportunities for Small and Growing Businesses in Vietnam
Shallots are prized around the world for their unique flavor and aroma, and Vietnam produces some of the best.
“Our shallots are special. They are very aromatic and a little spicy thanks to the land,” says Ms. Nguyen Thi Chau, founder of the Nhon Hai Shallot Cooperative.
She continues, “The tough conditions here actually improve the quality of the shallots.” Ninh Thuan is located on Vietnam’s southern coast where high winds and hot temperatures are the norm. Shallots grow faster in high heat, providing up to five crops a year. Even given the high quality of her products, Ms. Chau resorted to selling to traders and middlemen who are not consistent in their buying and pay lower prices. Realizing that she was not alone in facing this challenge, in 2022 she formed the Nhon Hai Farmers Cooperative with seven other farmers. Their goal was to work together to increase the market presence of Ninh Thuan shallots.
Small and growing businesses (SBG) are an essential contributor to Vietnam’s economic growth, accounting for more than 90% of the country’s private sector, employing over 50% of the workforce, and contributing roughly 40% of GDP. However, their continuing success is hindered by a lack of business knowledge, and limited access to capital and markets. USAID partners with Vietnam to address policy, market, and firm-level constraints faced by SGBs. In doing so, USAID is expanding economic opportunities in Vietnam through diversified supply chains.
“Our products were not well-known in the domestic market and we had no choice but to sell at low prices to compete,” said Ms. Chau about the economic pressures the farmers were facing even after forming the cooperative.
Looking for ways to promote her cooperative’s shallots, Ms. Chau learned about USAID’s work, done in collaboration with Vietnam's Ministry of Planning and Investment’s Agency for Enterprise Development (MPI), expanding economic opportunities for SGBs in Vietnam. Ms. Chau participated in USAID-supported training programs, one-on-one coaching, and in programs that expand business-to-business linkages to develop a feasible and comprehensive digital transformation roadmap for the cooperative.
One of the biggest challenges they were facing was getting information about their products to the public and buyers. Through their new roadmap, they created a global trade item number, a unique number to identify a product, for Nhon Hai shallots and incorporated QR labeling into their marketing, so that customers can access product information easily online. They also expanded online sales, selling shallots on popular social media platforms. Not only did sales increase, but Ms. Chau successfully promoted Ninh Thuan’s shallots internationally in markets in Canada, the United States, Korea, and Japan where on average they can sell their shallots for 30% more per kilo. Since digitizing their marketing tools, buyers from the U.S., Germany, and Korea have visited and conducted quality assessments of the shallots, giving them positive reviews.
“We could not have succeeded in introducing Ninh Thuan’s shallots to the world without USAID and MPI’s assistance,” said Ms. Chau, speaking about the cooperative’s success. She continues, “Higher revenue from domestic and international sales offers better returns and more opportunities to members of the Nhon Hai Cooperative.”
Nhon Hai Cooperative is ambitious and has expanded its product line to include crispy fried shallots and is actively developing the means to make shallot oil, a valuable health product. The cooperative is just one of more than 3,000 small and growing businesses, of which more than half are owned or led by women, that received customized training programs to improve their business skills
Nhon Hai Cooperative is an inspiring example of how the U.S. Government partners with the Government of Vietnam to leverage digital business tools, supporting these businesses to grow and expanding economic opportunities in Vietnam.
“From a modest number of eight members in 2022, we are expanding our business and scaling up our production with 23 members, creating more jobs and stable incomes for local farmers which is positively impacting our entire community,” says Ms. Chau about the future of Ninh Thuan shallots.
ABOUT THE AUTHOR: Benjamin Ilka is a storyteller and visual media specialist at USAID’s Mission in Vietnam.
