Vietnam - Poor Tet sales leave firms with stockpiles

Many companies that participated in HCMC's Tet price-stabilisation program are struggling to liquidate the stocks they had built up following unusually sluggish demand during the year's biggest festival.

The Ministry of Industry and Trade blamed the poor sales on the economic crisis and a change in people's consumption habits.

Unofficial figures from the Vietnam Plastic Association (VPA) showed that members only managed to sell two-thirds of their stockpiles, the association's vice president, Ho Duc Lam, said.

"With such large amounts of goods in stock, the enterprises will be facing difficulties in doing business because their money is stuck," he told Tuoi Tre newspaper.

Demand has been unusually low even for essential goods such as cookies and candies.

Tuoi Tre quoted a deputy director of a HCM City-based confectionery company as saying its stocks had increased by 5 percent compared to last year.

Garment companies were facing similar trouble after Tet demand fell by 30 percent, Nguyen Huu Toan, deputy general director of the Sai Gon 2 Garment Company, said.

Though the company reduced production compared to other years, it still had a hard time because of the low demand.

Many firms blamed the early arrival of Tet – too close to the New Year, which made it one extended shopping season – for the low demand.

Normally the Lunar New Year comes later, making it a distinct shopping season.

Lam said companies will be more cautious this year following the changes in consumption habits.

The director of An Phuoc Garment Company Ltd, Nguyen Thi Dien, agreed, saying that people tend to be cautious in their buying habits amid the economic difficulties, and so firms should review demand carefully.

They should distribute their products efficiently around the country to ensure sales, she added.

Phan Van Thien, deputy general director of Bibica Corporation, a confectionery industry leader, said firms should better research the market to understand consumers' needs.

VNA

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