This simple truth has only been discovered by Vietnamese businesses recently thanks to the weakened export markets during the global financial  crisis. They have  had to try to sell products within the domestic market and been pleasantly surprised at such high domestic purchasing power.

Vo Van Quyen, Deputy Director of the Domestic Market Department under the Ministry of Industry and Trade, said that the domestic market has been important in helping Vietnamese businesses overcome the economic downturn of 2009.

Economists believe that there are three factors that create GDP growth: investment, export and domestic trade. This year only one of these, domestic trade, has seen a  growth rate. At 10 percent it is the highest in Asia.

Phan The Rue, former Deputy Minister of Trade, now Chairman of the Vietnam Retailers’ Association, also said that the domestic market is now relatively large, with total retail turnover of goods and services accounting for 56 percent of GDP, it has become one of the most important factors which decide the economic growth.

Experts have estimated that if every Vietnamese consumer increases spending by 15,000 - 20,000 dong per month,  purchasing power will increase by 16,000-17,000 trillion dong, or nearly one billion dollars.

Businesses which once transported their products to rural areas for sale said that they were surprised about the high purchasing power of the areas which were previously thought were low income and unable to afford high quality products. The Hanoi Trade Corporation (Hapro), for example, earned 30 million dong in turnover in Ba Vi District, an outlying area of Hanoi, in just a morning.

Quyen from the Ministry of Industry and Trade said that it is a golden opportunity for businesses to boost sales on the domestic market. Vietnamese consumers have responded to the call by the Politburo ‘Buy Vietnamese goods’

However Do Gia Phan, Deputy Chairman of the Vietnam Consumer Protection Association, said that Vietnamese businesses need to be seen as prestigious to retain clients

Phan said that during a recent sales promotion held in Hanoi and HCM City many producers advertised price discounts of up to 50 percent. However the discounted rate was applied only to damaged items, whilst 99 percent of products sold at the original price. 

Quyen said that the Government is trying to support domestic businesses to boost sales on the domestic market. It is going to approve the decree on developing the market system in the country in which the State will give investment support to develop the markets in remote areas. Traditional markets are now undertaking the distribution of 45 percent of total goods.