Nov 26, 2012

Vietnam - Manufacturers stop making high grade products, focus on popular goods

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VietNamNet Bridge – Food companies don’t intend to make high grade canned products for the Tet sale season, but they will concentrate in making products with reasonable prices to retain consumers.

Targeting the majority of consumers

A lot of enterprises have to change their business strategies to get adapted to the current difficult conditions.

Le Thi Thanh Lam, Deputy General Director of Saigon Food, said high grade products would be unsalable during Tet because consumers are not ready to spend money on luxurious goods. Therefore, instead of launching the Tet gift box with five seafood products, like it did in previous years, Saigon Food would only provide some seachip products to be packed in separated boxes.

Lam also said that the company does not believe the market demand would be high this Tet; therefore, it does not intend to introduce new products.

Saigon Food plans to market 500 tons of products of different kinds, the same as last year’s. Meanwhile, in previous years, the productivity was always higher by tens of percent year after year. The company would also store 200 tons of half-finished products, not finished products, to be sure that all the products can be sold out.

Nguyen Lam Vien, General Director of Vinamit, also said that the company would prepare 500 tons of goods for Tet sale, a slight decrease in comparison with last year’s, because he believes the demand would not be high.

Especially, Vinamit would not market high grade products, because luxurious things would be refused by consumers. It also thinks of using simple materials for the packs, such as nylon bags or plastic boxes, in an effort to reduce the production costs.

Meanwhile, Kinh Do, a big sweets manufacturer, tries to attract buyers with Cosy series products which have reasonable prices. The products would be packed with different weight levels so as to give more choices to customers.

Le Hoang Thanh, a senior executive of Tan Quang Minh, a drink manufacturer, said the company strives to diversify products to make them suitable to different classes of customers. Especially, he emphasizes that only the products with moderate prices can catch the eyes of consumers.

Keeping prices unchanged, expanding retail networks

Stabilizing the sale prices is the most important strategy followed by enterprises in order to make their products salable.

Nguyen Xuan Luan, Deputy General Director of Kinh Do Group, has also affirmed that no price increase would occur with Kinh Do’s products. Especially, it would try to expand the retail networks by bringing products to rural areas.

Phan Van Thien, Deputy General Director of Bibica, said Bibica’s prices would be 20-30 percent lower than the imports with the same quality. “If we have to raise the sale prices, the price increases would not be higher than 5-7 percent,” he said. Bibica’s products would be available at 60,000 sale points throughout the country.

Distributors have also foreseen the weak purchasing power this Tet. Bui Thi Hanh Thu, Deputy General Director of Saigon Co-op, the biggest retailer in the south, said that consumers now tend to buy popular goods instead of luxurious ones because they feel insecure about the performance of the national economy.

The enterprises, which are the members of the Vietnamese High-Quality Products’ Association, have been preparing for the Tet sale festival, expected to take place on December 4 in Continental Hotel in HCM City.

The organization board has said the event would gather 1000 guests, who are the manufacturers, suppliers, retailers, small merchants and consumers, bringing them the opportunities to boost sales and strengthen cooperation.


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