Vietnamese goods get no love at home
It has been one year since the Ministry of Industry and Trade launched its "Vietnamese people use Vietnamese goods" campaign and, despite minor gains, Vietnamese products are still flagging in market popularity.
The country has always encouraged its residents to use locally-made goods, but the habit of using imported products is still common among many Vietnamese people.
Goods are plentiful in this country, from its large supermarkets to small street-side shops. The majority of goods sold here, however, are imported. Vietnam's trade deficit hit US$7.4 billion in the first seven months through July, almost twice the figure for the same period last year, according to the General Statistics Office.
Foreign products sell like hot cakes in Vietnam.
In Hanoi, the streets of Hang Duong and Hang Buom overflow with candy stores most of the products sold there are imported. Some consumers and sellers said that customers were attracted to flashy packaging, reasonable prices and the varieties of style.
"We sell domestically-produced confectioneries and jams mainly on traditional festivals such as lunar new year festivals (Tet), or mid-autumn festivals. On ordinary days, imported products with reasonable prices and good packing sell better," said Nguyen Thi Oanh, a shop assistant from a candy store on Hang Buom Street.
In Hanoi, imported garments and footwear are sold everywhere from fashion shops to supermarkets. Yet Vietnam remains one of biggest garment and footwear producers in the world.
"It's difficult to tap the domestic market," said Vu Thi Ngoc Lan, director of the garment producer Hanosimex Fashion. "Higher production cost has made local products less competitive than imported ones."
She said most input materials for her firm's production are imported, thus the production is strongly affected by the price in the world market. Meanwhile, since the beginning of the year, cloth prices have risen nearly 150 percent.
According to some experts, the shortage of strict regulations regarding import inspections also creates huge gaps through which low-quality foreign goods may infiltrate the domestic market and fiercely compete with local ones.
Cao Sy Kiem, chairman of an association of small- and medium-sized enterprises, said pricing is the biggest factor for consumers. However, local firms have not yet met consumer demand for both prices and quality, he said.
Some experts said a number of firms focus too much on export markets and ignore domestic buyers, particularly rural ones.
"Our main market is big cities (in Vietnam). We have recently been asked to sell products in the rural area under the campaign "˜Vietnamese people use Vietnamese goods," said Lan from Hanosimex Fashion. "However, we could not do it because our production costs are much higher than the retail prices suggested by the campaign organizers."
Vietnam's distribution system, especially in rural areas, has not yet fully developed. A number of rural people complain that they sometimes want to buy Vietnamese products, but most of the available goods are Chinese or have unknown origins.
A recent survey from ACNielsen, a global information and measurement company, showed that rural retail outlets account for only 47 percent of the whole country's stores, despite the fact that up to 70 percent of the population resides in these areas.
Phan The Rue, chairman of the Association of Vietnamese Retailers, said Vietnamese products reach consumers only after running through numerous distribution stages, so their prices have been pushed up, causing difficulties for consumers, especially those in the rural area.
Some experts attribute the small proportion of Vietnamese products that remain in the domestic market to weak advertising. Only Vinamilk, the domestic dairy conglomerate, and beverage producer Tan Hiep Phat frequently advertise on Vietnamese television programs.
Nguyen Minh Phong of the Hanoi socioeconomic research institute said the government should use the official media outlets to encourage Vietnamese people to use Vietnamese products.