Going International Analysis Project Asia Tea In Uzbekistan Market Entry Analysis.pdf

Group: Group 4 Target Market: Uzbekistan Product: Black Tea Hanoi, June 2025... Weighted Scaling of Factors Total 1.00 3,16/5.00 Table 1.1: Weighted Scaling of Factors of Uzbekistan

GOING INTERNATIONAL ANALYSIS PROJECT

ASIA TEA IN UZBEKISTAN: MARKET ENTRY ANALYSIS

Class: TAN403(2425-2)GD.2.3

Instructor: Ms Vu Thi Phuong Dung, M.A

Group: Group 4

Target Market: Uzbekistan

Product: Black Tea

Hanoi, June 2025

GROUP MEMBER

6 Nguyễn Yến Nhi 2214710073

7 Nguyễn Vũ Phương Nga 2211710069

§ Nguyễn Thị Tĩnh Nhi 2214710072

9 Trần Thị Ly 2214710065

TABLE OF CONTENTS

PART ONE: EXECUTIVE SUMMARY 1

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B Overview of Vietnam's Black Tea Export Performance to the Uzbekistan Market 11

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PART ONE: EXECUTIVE SUMMARY

1 Company Overview: Asia Tea Co., Ltd

Founded in 2004 and headquartered in Phu Tho province, Asia Tea Co., Ltd is one of

Vietnam’s leading tea manufacturers and exporters With an impressive annual capacity of over 20,000 tons, the company sources fresh tea buds from more than 1,200 local gardens, ensuring consistent quality and sustainability Asia Tea specializes in producing Orthodox Black Tea (a traditional method of tea processing that preserves the whole leaf and nuanced flavors) and CTC Black Tea (short for “Crush, Tear, Curl” — a method that produces strong, quick-brewing tea ideal for tea bags), with two main factories in Phu Tho operating at a total capacity of 90 tons per day

In addition to its production bases, Asia Tea operates two refining factories and a modem packaging facility in Hanoi, equipped with advanced technology from Japan, Korea,

India, and Vietnam Certified by RA, ISO 22000:2018, and HALAL, Asia Tea has been

recognized as Vietnam’s No.1 tea exporter since 2018 (Vietnam Yellow Pages, n.d; Asia Tea Company Limited, n.d.) With a strong presence in over 40 countries and proven experience in expanding to emerging markets, Asia Tea is well-positioned to meet international standards and adapt to diverse customer demands in dynamic markets like Uzbekistan

2 Target market: Uzbekistan

Tea drinking is deeply rooted in Uzbekistan’s culture, where green tea (kok cha?) is a staple of daily life and a symbol of hospitality (Uzbekistan Travel, n.d.; People Travels, n.d.) This cultural attachment helps sustain strong and consistent domestic demand for tea

However, Uzbekistan is a net importer of tea, relying heavily on foreign supply to meet this demand Notably, the country’s tea import share has grown faster than the global average, signaling strong market momentum and rising consumer demand (International Trade Centre,

2024, Trade Map database) In contrast, global tea export growth remains below 7%, indicating general stagnation

Despite this global slowdown, Uzbekistan’s high import value and rapid growth present

a clear opportunity for Vietnamese tea producers to penetrate a dynamic and expanding market

Asia Tea Co., Ltd is well-positioned to enter this promising market segment

3 Weighted Scaling of Factors

Total 1.00 3,16/5.00

Table 1.1: Weighted Scaling of Factors of Uzbekistan

Source: Heritage Foundation (2024)

4, Recommendation: Monitor

Based on a Weighted Scaling of Factors score of 3.16 out of 5, Uzbekistan presents a relatively open trade environment (Trade Freedom: 80.6) but significant risks in transparency and governance (Government Integrity: 31.2) Therefore, the company should not proceed with exporting immediately, but instead monitor the market closely over the next 6-12 months Special attention should be given to improvements in transparency and trade support policies If positive developments occur, Uzbekistan could become a promising target for international expansion

PART TWO: FACTORS FOR ANALYSIS

Section I Country Overview

A Factual data

1 Geographic location & population

Uzbekistan is located between the Amu Darya (Oxus) and Syr-Darya (Jaxartes) Rivers

It lies at the heart of central Asia Covering an area of 500,000 square kilometers and being situated in the heart of Central Asia, Uzbekistan provides a strategic hub for trade Along its

borders are Afghanistan to the South, Turkmenistan to the West and South, Kazakhstan to the

North, and Tajikistan and Kyrgyzstan to the East (CountryReports, 2025)

Uzbekistan ranks number 43 in the list of countries (and dependencies) by population

As of 23/05/2025, Uzbekistan has an estimated population of 36,973,750 people with 48.14% of the population being urban (17,835,913 people in 2025) (Worldometers, 2025)

2 Natural resources and main industries within country

Uzbekistan is rich in natural resources, with significant mineral deposits and reserves of oil and natural gas Uzbekistan possesses the world's fourth-largest gold reserves and some of

the world's largest reserves of uranium, zinc, lead, tungsten, and molybdenum (Invest

Uzbekistan, 2025)

Agriculture plays an important role in the country's economic growth Uzbekistan is one

of the world's largest producers of cotton, and agriculture accounts for a significant proportion

of the country's GDP Another key driver is the manufacturing sector The country has a well-developed manufacturing industry, with a focus on textiles, food processing, and machinery (CountryReports, 2025)

B Background

Uzbekistan was a vital part of the Silk Road, the ancient trade route connecting the East

and West This historical significance has fostered a culture of trade and commerce in major cities like Samarkand and Bukhara, making the country familiar with various goods, including tea The tradition of tea drinking is deeply rooted in social customs and hospitality, which creates a strong domestic market for tea products In the 19th century, Uzbekistan became part

of the Russian Empire (Britannica, 2025) After gaining independence in 1991, The transition to

a market economy was challenging, but the country has since implemented various economic reforms aimed at modernization and attracting foreign investment (Britannica, 2025) Section II —_— Political and Legal Analysis

There are some political features that can affect Vietnamese Tea exporters considerably, including political ideology, political risks, legal system and international relations

2 Political transition

Since 2016, President Shavkat Mirziyoyev has initiated reforms aimed at modernizing governance and improving human nights (SDP EU, 2024) These changes may increase confidence for foreign investments, including Asia Tea's export activities in Uzbekistan

In conclusion, Asia Tea Co must navigate Uzbekistan's political landscape, despite potential challenges like authoritarian regime and lack of transparency, to build partnerships and enhance market confidence, while remaining adaptable to regulatory changes

B Political risk

1 Political risk

Uzbekistan has a relatively low CPI score of 32 out of 100, ranking 121st globally This indicates a high level of perceived public sector corruption, which poses a significant political risk for foreign businesses (Transparency International, 2025) Since 2023, the score has decreased by 1, which means the problem of corruption in Uzbekistan is becoming more serious In Uzbekistan, there are terrorist groups like: /slamic Jihad Union (1JU); Islamic Movement of Uzbekistan (IMU) Therefore, businesses exporting like Asia Tea have to consider these sources of political risk while doing business in this country

2 How to adapt to the political risk

Vietnamese companies can adapt to political risk in Uzbekistan through three key strategies: forming joint ventures with local partners to navigate the political landscape, regularly monitoring political developments from reliable sources, and developing government relations (GR) strategies to engage transparently with policymakers These approaches will help mitigate risks and create a stable environment for exporting Asia Tea

C Legal system

Uzbekistan’s legal system plays a crucial role in shaping the investment and export environment, especially for Vietnamese businesses seeking opportunities in this market

1 Legal system overview

Uzbekistan's civil law system, rooted in continental traditions, includes codified statutes

and regulations like the Civil Code, Tax Code, and Customs Code The country is undergoing judicial reforms to improve the investment climate and strengthen court independence, enhancing transparency and reducing legal uncertainty for foreign exporters (Uzbekistan - United States Department of State, 2025)

2 Property rights, product safety and liability laws

Effective IP enforcement is critical for consumer goods like packaged tea.Uzbekistan has improved its intellectual property (IP) enforcement regime, reducing official fees for patents, trademarks, utility models, and industrial designs by approximately 75% (Editor, 2024)

In 2024, Uzbekistan was removed from the USTR’s Special 301 Watch List, reflecting

improvements in IP enforcement (2024 Special 301 Report, n.d.) This offers a favorable legal environment for Vietnamese companies such as Asia Tea to register trademarks and packaging designs

Uzbekistan enforces strict product safety and labeling laws, requiring food imports to undergo lab testing, obtain Certificates of Conformity, and display Uzbek-language labels As of January 1, 2025,mandatory food labeling applies to all imported goods, protecting product credibility and consumer confidence, especially for tea products (UzDaily, 2020)

3 Level and focus of taxation

Uzbekistan’s tax structure offers both opportunities and challenges for foreign exporters

In 2025, duty-free import privileges were extended on 60 essential goods, including tea and coffee, until 2026 The steady 12% Value Added Tax supports affordability without heavy tax pressure, benefiting Vietnamese exporters like Asia Tea (PwC Uzbekistan, 2023) Overall, the temporary tax relief provides a favorable window for Vietnamese exporters like Asia Tea Uzbekistan is reforming its legal system to align more closely with international standards and promote trade liberalization, particularly through its anticipated accession to the WTO in 2025 This presents long-term opportunities for Vietnamese tea exporters However, several structural challenges remain The most pressing include bureaucratic complexity inherited from Soviet traditions, which causes delays in customs and licensing (World Bank, 2024) Inconsistent legal enforcement, especially outside Tashkent, creates uncertainty for foreign exporters Thereby, to fully capitalize on these prospects, businesses must proactively comply with legal requirements, monitor policy developments regularly, and collaborate with local partners, as gaps still remain between legal regulations and their practical enforcement

In summary, Uzbekistan's open and structured regulatory landscape presents potential for Asia Tea, with improved IP enforcement and growing demand for high-quality consumer goods Success depends on complying with product safety laws and overcoming tariff barriers, with strategic steps like trademark registration, product certification, and local partnerships

D International relations

Since 2017, Uzbekistan has expanded its relations with regional and international markets, focusing on its relationship with Vietnam and its ties with leading tea-exporting countries like China and Russia, which may influence Vietnam's decision to export tea to Uzbekistan

Russia: 9/2022 a strategic partnership between Uzbekistan and Russia was established, with Uzbekistan being Russia's key ally in Central Asia The two countries cooperate bilaterally and within multilateral frameworks Russia has consistently ranked first or second in

Uzbekistan's foreign trade volume, and if it increases tea exports, it may receive preferential

treatment, positioning Russia as a potential competitor to Vietnam in the Uzbekistan tea market (Bao Tin Tức, 2024)

China: China and Uzbekistan have upgraded their relationship to an "all-weather

comprehensive strategic partnership" in 2024, with bilateral trade reaching a record high in

2023 China is the largest tea exporter to Uzbekistan, accounting for 62.88% of the market, strengthening its dominance in the tea trade (Global Times, 2024)

Vietnam: Vietnam and Uzbekistan have established diplomatic relations in 1992 and have developed positively in various fields, including economy, science, and technology They signed an economic and trade cooperation agreement in 1994 and implemented a joint oil and gas cooperation program Vietnam is Uzbekistan's largest trading partner in Southeast Asia Chairman Pham Tan Céng emphasizes strengthening trade and utilizing Vietnam's export products like tea and coffee (Tap chi Cong Thuong, 2023)

Section ITI Economic Analysis

2 Fiscal and monetary policies

Uzbekistan's fiscal policy for 2024 aims to reduce the fiscal deficit to 4% of GDP, with a medium-term target of 3% The government is implementing growth-friendly measures like cutting energy subsidies, improving social spending efficiency, and reducing policy lending However, revenue-to-GDP has slightly declined due to tax exemptions and rate reductions Uzbekistan is strengthening debt management through a new public debt law, which supports domestic demand and investor confidence

Uzbekistan's monetary policy aims to reduce inflation and align expectations with the central bank's medium-term target Inflation is declining, real interest rates remain high,

structural excess liquidity decreases, and household lending moderates

B Economic development

Over the past decade, Uzbekistan’s economy has maintained stable growth reflecting improved living standards The current market shows strong potential for imported products like black tea, though inflation and limited purchasing power In higher-end segments should be considered

1 GDP and GDP per capita

The country’s GDP growth and GDP per capita have shown stable and positive development

Indicator 2015 |2016 |2017 |2018 |2019 | 2020 2021 12022 2023

GDP growth |7.2 5.9 4.4 5,6 6.8 1.6 8.0 6.0 6.3 (annual %)

GDP per | 6799.6 | 6919.3 | 7818 | 8128.8 | 8544.1 | 8,451.7 | 9247.6 | 10292.5 | 11107 capita(Billion

3 Macroeconomic indicators