Vietnam - Consumer product another foreign-dominated market

In addition to their dominance in the textile and garment and plastic and mechanics sectors, foreign-invested companies have also prevailed in the consumer product segment.

Confectionaries, processed food, instant noodles, and beverages under the brand names of FDI companies are now available in almost every grocery and supermarket across the country.

International manufacturers such as Acecook, Uni President, Maggie, and Unilever have increasingly become familiar to local consumers, with their nationwide distribution chains rapidly expanding.

While local manufacturers have had to struggle to maintain their market shares, the international players have on the contrary posted strong growth year by year.

In the instant noodle industry, for instance, FDI manufacturers have enjoyed annual growth of 20 to 30 percent, and dominate the local market, which is ranked the world’s fourth largest noodle consuming nation.

“We inherit the modern manufacturing technologies and experience from the foreign investors, which creates huge advantages when it comes to research and development for new products,” revealed Hoang Cao Tri, deputy CEO of the Japanese-invested instant noodle maker Acecook Vietnam.

On the other hand, Vietnam’s Colusa – Miliket food company said local firms also have modern production technologies, but the main obstacles are limited financial ability, and inadequate administrative management.

“Vietnamese businesses are thus inferior to foreign-invested companies in media matters such as advertising and brand building,” a company representative said.

Impressive growth

Nguyen Phuong Thao, director of HCMC-based Maximark Cong Hoa, said her supermarket has to restrict the amount of shelf space given to foreign brand names, as some are willing to hire entire rows of shelves only to display their products.

Cleaning products, confectionaries, and instant noodles shelves in many supermarkets are in fact already full of foreign products, while locally-produced goods only occupy a modest amount of space.

Acecook currently spreads its presence to some 90 percent of the instant noodle market with more than 500 dealers countrywide, its representative said.

Twenty years after arriving in Vietnam, the Japanese firm has become the country’s No.1 noodle manufacturer with annual revenues of more than VND4.5 trillion (US$215 million).

Deputy CEO Tri said the average growth of the company over the past few years is 10 percent, and reached 30 percent in 2011.

“Our success is the result of our ability to catch consumers’ tastes and introduce many new products,” he said.

Acecook Vietnam has recently pumped an additional $10 million into increasing the total number of its Vietnam plants to 13, up from the current 11.

Stiff competition is also present in the confectionary market, with the Filipino Universal Robina Corporation posting impressive average growth of 300 percent over the last seven years.

Meanwhile, biscuit maker Orion Vina Co Ltd enjoyed $3 million in revenue last year, when most of its local counterparts had to struggle to empty unsold stocks.

TUOI TRE

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