Linkage for more Domestic Market Share of Aquatic Products

Though all Vietnamese enterprises recognized the importance of domestic market of 85 million people, they have in fact invested inadequately in the local market. According to representative of Cholimex food processing company, although the turnover of domestic market increased 20 percent a year (VND2 billion a month), only 10 percent of its output are for domestic consumption and 90 percent are for export. For its part, Saigon aquatic products company APT specialized in canned, frozen and fresh products could maintain only a turnover of VND3 billion a month in local market. Meanwhile Vietnamese customers prefer fresh fish, squid and shrimp over frozen products, local companies failed to develop a distribution network to meet the demand.

 

Experts have warned that the vacant home court can be exploited by foreign investors and in the conditions of world economic crisis, it is important to develop both domestic and foreign markets to ensure sustainable growth. They have also pointed out that frozen products are only available in supermarkets and big cities and Vietnamese enterprises still focus on export for higher profit (Export price of a kilogram of tra fish is US$2.7-3 while only US$2 in domestic market).

 

Mr. Dang Kiet Tuong, Director of Ben Tre Frozen Products Export Company, said that it is even more difficult for later comers as local market share has already been occupied by earlier companies. It is also difficult to develop a local distribution network as exporters get used to foreign orders and long-time customers. Presently imported products such as salmon, basa, etc. have been present in local market, Vietnamese managers and associations still could not introduce a list of substituting products.

 

According to Mr. Truong Dinh Hoe, Secretary General of Vietnam Aquatic Products Processing and Exporting Association (VASEP), if in the initial stage Vietnamese enterprises develop its strength and linkage, they can compete successfully with foreign companies. Mr. Hoe also believed that foreigner distributors cannot possibly develop a distribution chain without the assistance of local enterprises. In Vietnam, they have to rely on Vietnamese enterprises for certain period of time. In the new conditions, Vietnamese enterprises have to accept new business environment and compete in equal term with foreign companies. Vietnamese enterprises must develop suitable business strategy, inter-sector linkage with larger scale and higher competitiveness and stronger cooperation with foreign companies to dominate important markets.

 

Besides, related authorities must develop mechanism and policy   promoting production and distribution, service and trade partnership for long term cooperation. They must also improve the management of distribution, product quality, market forecast and prices.

 

For their parts, Vietnamese businesses must organize themselves in production, developing trademarks, distribution network, products and services with high quality and reasonable prices to ensure sustainable development.