Vietnamese Producers Try To Win Locals Hearts

Vietnamese producers try to win locals' hearts

A report on Vietnamese goods released by the High-quality Vietnamese Product Business Association in early February showed a number of concerns. 

Domestic products are still dominant in the market with 51 percent of consumers favoring and 60 percent of consumers buying the products regularly. However, the proportions are much lower than in 2017.

The survey conducted by the association found that products with Thai, Japanese and South Korean origincemented their position in the domestic market after Chinese products became unpopular. 

In the previous survey, imports from Thailand, Japan and South Korea bought regularly by customers accounted for less than 3 percent. Meanwhile, the figure soared to 8-10 percent in 2017.

A report from the General Department of Customs (GDC) showed that enterprises spent more than $167 million in January 2018 to import fruits for the Tet holiday season, an increase of 70 percent over the same period last year. Thailand was the biggest source of supply with $73 million worth of import turnover.

According to the General Statistics Office (GSO), in January, Vietnam’s trade deficit was estimated to be $300 million, with imports increasing sharply by 47.4 percent compared with the same period last year. 

The director of a large distribution chain in Vietnam commented that imports from Japan, South Korea and Thailand have been rising rapidly.

“It is understandable. Foreign manufacturers are superior to Vietnamese in terms of technology which allows them to make high-quality products,” he said.

“Vietnamese enterprises also spend more money to upgrade technology, but most of them have problems in investment, either because of limited financial capability or lack of a long-term vision,” he said.

Meanwhile, foreign products’ competitiveness are empowered by foreign retail networks. 

Experts from the Vietnamese Product Business Association pointed out that the acquisition of retail chains has brought big advantages to foreign products. 

The four largest retail chains in Vietnam belong to foreigners. These include Mega Market with 19 supermarkets, B’s mart with 75 convenience stores, Big C with 32 supermarkets and Robinson’s. Japanese have Aeon Mall, Saigon Center and Family Mart, and 7-Eleven, while Koreans have Lotte, Emart and SG25.

Nguyen Lam Vien, general director of Vinamit, a dried fruit manufacturer, also commented that the disappearance of several domestic distribution chains and the pressure on existing chains have been factors in reducing the area for Vietnamese goods.

“Common consumers who go to traditional markets tend to choose cheap products, while those who go to supermarkets prefer imports. Vietnamese goods must have high quality to be able to find positions in Thai- and Japanese-owned distribution chains,” he commented.

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Mai Chi