Jan 1, 2013

Vietnam - Unofficially imported products yield super-profits

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Vendors of hang xach tay, or portable products that are unofficially imported to the country, are raking in whopping profits during the high-demand season of the New Year as the goods are sold at a far higher price than their original value.

Hang xach tay is a local term to describe portable goods that are brought to Vietnam as personal belongings, and thus are not subject to any import tariffs.

While the vendors are enjoying super-profits, consumers have little information about the real quality and expiry dates of the products, and the government loses a considerable amount of state budget collection.

Whopping profits

A store specializing in cosmetics and food supplements on Hoang Van Thu Street in Ho Chi Minh City’s Tan Binh District is introducing a number of products from the US, Australia, and Japan.

The Super Thin Body Slim, a weight-loss product, is said to be from the US and available at VND1 million a can, while the wholesale price for a 10-product order is only half that rate.

Insiders, however, revealed that the real price of the product is only some VND300,000 a can.

Similarly, a store on Le Hong Phong Street is selling an Australia-imported royal jelly product at VND1.2 million a box, but the wholesale price is only VND700,000.

Nguyen Phuong Thao, an imported cosmetics wholesaler in the city, said there are adequate supplies of hang xach tay, and under the ‘imported’ labels, they are sold at exorbitant prices.

“A Nuskin skin care product can cost between VND5.4 million and VND9.4 million, depending on the type,” she said.

Although some stores admitted that their products were distributed by the TS JSC, but there are no receipts or invoices, and the vendors always tell customers that the products are hang xach tay.

“We can only yield profits with hang xach tay, while profits from officially imported products are just modest,” said an attendant of the TS Co.

Dubious quality

Vendors only guarantee the product's quality for those whose prices are more than VND1 million, while consumers have no source of reference other than those who sell them the costly products.

Some consumers said the xach tay cosmetics are always advertised with flowery words but the goods, in fact, are not effective.

“The shop assistant insisted that I could have 50 percent of my skin melasma reduced after using 2 – 3 boxes of the product,” said Le Bich Nga, who regularly buys Japanese ginseng cream at a store in Binh Thanh District.

“But when I said the product had no effect, even though I have been using it for two years, the assistant told me to remain patient,” Nga added.

Some customs officials said the quality of hang xach tay is unknown, as officially imported products always have to pass quality tests before receiving customs clearance.

They added that some importers have added hang xach tay into their official import batches to evade taxes.


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