Tet purchasing bustles amid economic recovery

TN News

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Surrounded by shelf upon shelf of brightly colored candy boxes, Tran Quynh Hoa's shopping cart was already full.

But that didn't stop her from selecting two more boxes of chocolates and placing them precariously atop her haul of fruits, rice, and confectionaries.

"I'm buying almost everything for Tet (the Lunar New Year Festival, which falls in mid-February this year) now," she said, while waiting to pay at the crowded Intimex Supermarket. "Closer to Tet, supermarkets will be much more crowded, and prices may be higher."

But the number of customers flooding supermarkets and shops to purchase goods for Tet has already surged, and things get especially crowded on the weekend.

Purchasing demand this Tet is expected to increase amid the economic recovery. A number of firms have reinstated old salaries and bonuses or even increased them after slashing them at the height of the recession earlier in 2009.

Vietnam, like several other countries, is bouncing back from the global crisis, said Hanoi-based World Bank country director Victoria Kwakwa.

Its economy expanded at 5.3 percent last year. The nation's gross domestic product grew 6.2 percent in 2008 and growth is likely to accelerate this year to 6.5 percent.

According to the Hanoi Department of Industry and Trade, the city's purchasing power next month is expected to increase 30 percent to VND12 trillion (US$631.57 million). Demand for most essential foods is thus expected to rise.

Nguyen Thai Dung, vice general director of supermarket BigC Thang Long, forecast that consumers' purchasing demand, especially for items such as electronic products, garments, food and beverages, will sharply increase 1-2 weeks before Tet.

Traders and producers have actively prepared goods to meet the increasing demand. A representative from Intimex Supermarket said the supermarket had raised the amount of goods in stock by 30-40 percent compared to the previous Tet.

Meanwhile, Tran Quoc Viet, general director of confectionery producer North Kinh Do Company, said his company has planned to increase its production by 35 percent this Tet. "The consumption increase is mainly due to the economic recovery, and a government policy encouraging Vietnamese people to use Vietnamese products."

Domestic products dominant

 Locally-made products, especially confectioneries, have so far held the upper hand on the Tet buying market. Viet of Kinh Do said competitive prices and new designs had helped locally-produced items.

Higher US dollar prices over the Vietnamese dong, which makes the import of products more difficult, and the "Buy Vietnamese" campaign were also creating advantages for local items, he said.

At a Hanoi Trading Corp. (Hapro) shop, locally-made goods accounted for 80-90 percent of the essential items for Tet, such as confectioneries, coffee, tobacco and beverages.

Duong Thi Quynh Trang, Manager of External Affairs at BigC Vietnam, said local producers such as Kinh Do, Bibica, Hai Ha were the main suppliers of confectionery products for her supermarkets this Tet. "Domestically-produced confectioneries account for 90 percent our sales. Imported products, mainly from Malaysia, Singapore and Thailand, make up 10 percent only."

Price hikes prevention

According to the Department of the Industry and Trade of Hanoi, most items have seen Tet price hikes, a traditional market trend around this time of year, from 3-20 percent, mainly due to higher input costs. To stabilize the market, Hanoi has spent VND250 billion ($13.16 million) subsidizing big traders so that they can access bank loans with zero percent interest rates and keep some prices 5 percent lower than the market.

Some traders have also committed to not increasing prices during this Tet. Dung from BigC said, "We are working with some producers to ensure volumes and quality. Up to 70 percent of our suppliers have committed to keeping product prices stabile this Tet."

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