While Vietnamese enterprises just focus on bringing their products abroad to sell and deal with a lot of barriers, from technical to tariff imposed by import countries, the home market is being opened for foreign products with no considerable barrier. Foreign-made products have even been welcomed by Vietnamese consumers.

Vu Thi Kim Hanh, Director of the Business Supporting Associates (BSA), said that Vietnamese enterprises remain incapable to install the barriers to stem the flow of foreign products. However, she said, they can use another ‘weapon’ in the rival with foreign colleagues – the national pride.

Hanh related that some South Korean businesses told Hanh they were really surprised when hearing that Vietnamese consumers favour South Korean-made products. The businesses said that South Korean people always have the consciousness of protecting their products made by the enterprises of the country.

However, Hanh said that one cannot attribute the inferiority of Vietnamese products to the Vietnamese consumers’ habit of favouring foreign made products. Hanh said that Vietnamese people love their country and feel the need of sharing experiences with businesses; however, they have the right to choose good products for use.

“Vietnamese consumers are ready to install the barrier to protect domestic products. However, before doing that, they will raise the question if domestic products deserve to be protected,” Hanh said.

She went on to say that the slogan “Vietnamese consumers use Vietnam-made products” proves to be not suitable to current circumstances any more. Vietnam has entered a new period of development, as it has joined the World Trade Organisation and has to open the retail market to foreign retailers.

Former Minister of Trade Truong Dinh Tuyen also said that enterprises need to become more competitive to launch good products and services to receive the support from customers.

Tuyen emphasized that enterprises have not paid the appropriate attention to developing products and services on the domestic market. While foreign retailer groups consider Vietnam as the market of full potential, Vietnamese enterprises have only been focusing on export.

Tuyen said that it proves to be impossible for Vietnam to maintain the high export growth rate of several tens percents for a long time as China and Brazil can. The garment export turnover to the US, which once amounted to 55% of garment exports, saw the record decrease of 20% in the third and fourth quarters of 2008. Other markets like Japan, EU, and the Middle East have also seen sharp decreases.

In such a condition, enterprises have realized the importance of the domestic market. Selling goods on the home market has become the vital job for Vietnamese enterprises, if they want to survive and develop.

Tuyen said that Vietnam’s retail market after January 1, 2009 can be described as a battlefield, and the winners will be the ones who can attain the support of people.

Tuyen also said that retail points can be described as the ‘entrenched fortifications’ on the battlefield. Even if enterprises have good products and reasonable prices, their products will not reach out to consumers if they cannot use the retail network.

Vietnam proves to be the retail market with great potential. In recent years, the retail turnover growth rate always reached over 20% per year, which is even higher than the annual GDP growth rate.

Tuyen joked that he has never set foot in the Metro supermart, and this provides another reason to keep optimistic that a lot of Vietnamese people still love domestically-made products and remain faithful to the domestic distribution network.

Source: VNE