“Golden opportunity” for Vietnamese goods

Taking the initiative

This year’s consumer demand for Tet gifts is expected to increase by 20 percent compared to last year’s. The Ministry of Industry and Trade says that the booming domestic market and the increasing consumer power will provide a good chance for businesses to step up production and distribution. Such products as drinks, processed foods and garments will dominate the market thanks to their competitive prices and high quality.

At the moment, the “Vietnamese use Vietnamese products” campaign is already in full swing over the country. To improve the competitive edge of Vietnamese products and encourage domestic spending, the Minister of Industry and Trade has decided to spend VND51 billion on trade promotions in 2009 and 2010. Part of this sum will be used during the upcoming Tet to help businesses expand their sales networks, especially into rural areas.

Due to fluctuation in exchange rates, imported products are not as highly competitive as before. According to a recent survey conducted by the Agro Information Centre, the volume of imported frozen meat ordered for the Tet festival has fallen by 30 percent compared to last year as the price of imported meat has gone up sharply. The price of chicken wings imported from the US has risen by US$300 to US$2,200 per tonne. Furthermore, some imported processed foods and garments have been barred because they contain banned chemical substances.

Against this backdrop, domestic businesses plan to launch a huge volume of confectionary, processed foods, garments, and other consumer goods on the market.

A representative from the Bibica Company says that it will supply around 4,500 tonnes of confectionary during Tet, up 20 percent compared to last year.

Vietnamese products currently account for 70 percent of all goods available in the supermarkets and even 90 percent in Co.op Mart and Big C.

Tet-not just a short-term opportunity

With producers and distributors swinging into action, customers will have a good chance to access a wide range of Vietnamese goods at reasonable prices.

However, Vu Kim Hanh, Director of the Centre of Business Studies and Assistance (BSA), warns businesses that if they want to gain a firm foothold in the domestic market they should have a long-term strategy. They should not see Tet as a short-term opportunity to sell their unsold goods or to raise prices. Instead they should improve the quality of goods and services to enhance their reputation.

Many businesses consider keeping prices stable during Tet as an effective way of increasing their prestige. Bui Duy Duc, general director of Vissan, says that his company often supplies high quality products at reasonable prices. It tries to keep prices unchanged as often as it can.

Vu Vinh Phu, chairman of the Hanoi Supermarkets Association, says that to stabilise prices and encourage Vietnamese people to use Vietnamese products there needs to be closer coordination between the ministries and related agencies to deal with speculators, and traders in fake products and smuggled goods.

There will be no shortage of goods during Tet but more often than not prices will go up on account of poor trading methods, says Hoang Tho Xuan, head of the Domestic Market Policy Department under the Ministry of Industry and Trade. The most important thing is to closely monitor and keep the market under strict control, he concludes