Vietnam - Cheap domestic goods refused, expensive imports selling well

VietNamNet Bridge – Though having low sale prices, a great advantage in the hard times and when people have to fasten their belt, domestically made products still have been on a tottering position in the home market.

Imports flooding domestic market

Seventy percent of the sweets products displayed at CitiMarts are imports. The same proportion can be seen at Maximark.

Especially, the areas reserved for dairy products have been dominated by imports. In the past, domestic products gained an advantage over foreign ones in the liquid milk market segment thanks to the lower prices. However, the shelves at the supermarkets are now full of the products from New Zealand, Germany, South Korea and Thailand.

Not only dominating the modern distribution channels, foreign products have also reached out to every corner in big cities and rural areas, from schools, parks to children’s houses. Nabati, a product from Indonesia, for example, has been used everywhere by children, though the product just entered the Vietnamese market one year ago.

Retailers have all said that foreign products, especially sweets, have been selling better than domestic ones over the last three months thanks to the professional marketing campaigns, even though they are more expensive than domestic products.

A 120 gram box of Kinh Do’s wafer is priced at 14,000 dong, while the similar product imported from Thailand is selling at 19,000 dong. A 220 ml carton of pasteurized fresh milk, made by Nutifood or Vinamilk, is selling at 6000 dong, while an import product would be sold at 10,000 dong.

Domestic manufacturers on tottering position

Nguyen Minh Nhat, a senior executive of Vinamilk, has affirmed that Vietnamese goods have a lot of advantages over foreign ones. The products have the brands near to customers’ hearts, reasonable prices, and the formulas fitting the Vietnamese tastes.

However, Nhat admitted that foreign products still have been superior to domestic ones in terms of sales thanks to the big marketing campaigns. Financially powerful, foreign manufacturers or distributors can launch marketing programs to make their products well known to the majority of people.

That explains why the Lien Thanh fish sauce, which has existed for the last 100 years, has not been available at the big supermarkets in HCM City – the homeland of the wonderful fish sauce products.

A lot of Vietnamese brands have disappeared from the market because of the lack money for advertisement campaigns, or simply because they think “good wine needs no bush.”

In fact, foreign products have been selling better in the domestic market also partially because they are supported by domestic merchants.

In the clothes market, for example, retailers would prefer selling Chinese products to Vietnamese, because they can import Chinese products with easy conditions and make bigger profits when selling Chinese products.

Meanwhile, domestic manufacturers have not been warmly welcomed by domestic retailers. An executive of a garment company said that supermarkets always demand very high discounts from domestic enterprises, 15-30 percent of total turnover, thus making it impossible for domestic manufacturers to bring their goods to supermarkets.

Explaining this, Nguyen Thi Xuan, a merchant at Pham Van Hai Market in HCM City, said that Vietnamese merchants have been satisfied with the price policies applied by foreign brands. Therefore, the most advantageous positions at the markets or shopping malls have become the “inviolable positions” of foreign brands.

Nhat Nam

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