When the export markets are narrowed, enterprises automatically think of expanding the domestic market. However, the question has been raised now is that how to stimulate the demand and how to push up sales on rural markets.

Acting Director of the Vietnam Economics Institute Tran Dinh Thien said that expanding the domestic market proves to be the right move. However, he has warned that once export markets are faced with difficulties, it would be not so easy to develop the domestic market.

It would be reasonable to focus on rural markets, but enterprises need support programs in bringing products to rural areas due to the high uncertainties.

“The Government, for example, can give support with interest rat subsidy to help boost farm produce consumption instead of giving money directly to farmers,” Thien said.

He went on to say that the focus on rural markets should have been done for a long time. It is necessary to have suitable policies on developing the rural economy in general, not only on developing agriculture.

Sharing the same view, Deputy Director of the Market and Price Research Institute under the Ministry of Finance, Dr. Vu Dinh Anh, said that the rural markets are being dominated by foreign products, while there are very few domestic commodities.

Anh said that with 70% of population living in rural areas, it would be more effective to stimulate demand in rural areas than in cities. As the demand proves to be very big in the market, domestically made commodities will be selling well here.

Until now, Vietnamese enterprises have ignored the domestic market, partially because the production cost of domestic enterprises is always higher than imports, while the quality of domestic products is also lower than imports.

However, Anh said that enterprises would be defeated in rural markets if they only try to sell products in rural areas after they cannot sell abroad.

“In conquering the domestic market, enterprises need to have methodical strategies to access the market and consider domestic market as long term goal,” Anh said.

Anh suggested that one of the ways to conquer the domestic market is to offer the same preferences for selling commodities on the domestic market like the preferences applied to exports.

Vo Van Quyen, Deputy Director of the Domestic Market Policies Department under the Ministry of Industry and Trade, which is compiling the project on domestic demand stimulus, also stressed the need to focus on the domestic market at the difficult moment.

Quyen said that he does not agree with the viewpoint that the habit of favouring foreign made products instead of domestic products will hinder the implementation of the project on domestic demand stimulus, emphasizing that this is not a problem to worry about.

Quyen said that the State will support enterprises in surveying the domestic market, organizing trade fairs and in selling products, especially rural areas.

It is expected that the Ministry of Industry and Trade will join forces with Vietnamese enterprises to organize three delegations which will make mobile sales at the centres of districts and communes. The main products on sale will be essential goods which have the quality and prices fit to local residents.

The sale program is scheduled to be carried out in March 2009 and last until the end of 2010.

Source: VietNamNet/TP