Vietnamese businesses have been warned they may lose home market

Trade experts have repeatedly criticized Vietnamese exporters for their unreasonable business strategy – exporting products with the best quality, while reserving lower-quality goods for domestic consumption.

Exporters can expect higher profits from exports rather than the products sold in the domestic market. In addition, foreign markets are choosier than the domestic market, so lower-quality exports will not be accepted.

Pham Tat Thang, a senior researcher of the Ministry of Industry and Trade (MOIT), commented that many products for domestic sale cannot satisfy the standards, blaming this on bad state management and unreasonable business views.

“If the situation cannot be improved, we will lose the home market,” he warned.

While Vietnamese manufacturers ignore the domestic market, foreign enterprises find the Vietnamese market very attractive.

Thai enterprises were cited by Thang as an example.

Thailand opens trade fairs every year to popularize its products, sending a message to Vietnamese consumers that Thai products have high quality and reasonable prices. 

Thai distributors bring Thai products to supermarkets and their distribution chains to approach Vietnamese consumers. They also bring their goods to traditional wholesale markets in Vietnam, including Dong Xuan, the largest wholesale market in the north, Han Market in Da Nang City, Dong Ba in Hue City and Ben Thanh Market in HCMC. They encourage the establishment of convenience stores which are located in residential quarters.

An analyst, agreeing with Thang, noted that Thais have been following a very professional way to penetrate the Vietnamese market.

“Thai sell Thai goods in Vietnam, using facilities in Vietnam, Vietnamese workers and Vietnamese capital. And they have succeeded,” he commented.

“Vietnamese women, who decide what to buy for their families, tend to buy Thai goods when they want anything, from kitchenware, household-use electronics to clothes and cosmetics,” he said.

He said that ASEAN has become a single market with the establishment of AEC, and if Vietnam cannot take full advantage of AEC, it would lose the home market and fail to penetrate other markets in AEC.

“Coming back to conquer the home market is vital for Vietnamese enterprises,” Thang commented.

Some businessmen recently complained that it is too difficult to conquer the home market, though their exports have been accepted all over the world.

On this issue, Thang said the problem lies in the state management and the relation between manufacturers and distribution chains.

He also said Vietnamese enterprises do not pay appropriate attention to how to make products for Vietnamese. 

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