Domestic Market – Supporting Point for Enterprises

Advantages being on the home field Economic expert judge that domestic market will be a point of support for enterprises to grow given the global economy’s recession. Vietnamese enterprises have certain advantages when competing on the home field. First, they have better understanding of the market and consumption culture of Vietnamese than foreign enterprises. Second, 85 percent of Vietnamese population still opts to the traditional distribution channel while foreign distributors in Vietnam mainly develop modern distribution channels. Also according to experts, with a population of over 85 million, a majority of whom are youngsters, the consumption growth rate during the past years has been over 20 percent, which shows that the potentials of domestic market are huge. In order to stand firm in the home field, enterprises should attach importance to occupying domestic market, considering it the basis and overseas markets of importance in their sustainable market development strategy.

Besides, so as to succeed, it is also necessary that enterprises have strategies to classify market and correctly identify customers they will aim at. In his message at the beginning of 2009, the Prime Minister also affirms that expanding domestic market and accelerating consumption of domestically made products are not only urgent requests in the context export markets are narrowed, but they must be important development orientation in the process of establishing an independent economy in the globalization and economic integration process. Being fully aware of the importance of domestic market, the Government already puts forward stimulus programmes in order to help domestic enterprises maintain production. It is known that the Ministry of Trade and Industry is also in a hurry to complete its programme to stimulate consumption demand, accelerate consumption of domestically made products, expand and exploit home market. Each enterprise also needs to set up a business and production plan for itself in order to approach the domestic market. Besides, so as to make the best exploitation of domestic market, there needs to be harmony among state management authorities, enterprises and consumers. Promotional activities of the Ministry of Trade and Industry (MOIT) used to be aimed at export. However, the Government already approves that the MOIT implements policies and methods to accelerate trade promotional activities for home market. The MOIT is implementing the programme to sell Vietnamese goods to rural areas. The rural market with over 70 percent of the population is a place full of potential for development. Moreover, enterprises used to focus on export market only. It is urban area to be paid attention to if the domestic market is cared. Commercial activities to supply goods for the rural market have not been paid attention to for long. As such, the rural market has been a place for goods of low quality, faked goods and smuggled goods.

Create confidence for consumers In a recent seminar, Mr Cao Si Kiem, Chairman of the Association of S&M Enterprises, believes that Vietnamese enterprises currently have to face obstacles. However, given this situation, some enterprises quickly grasp demands of the market and meet them. According to Mr Kiem, if enterprises want to stand firm in this tough time, under any circumstances, the Management Boards have to be calm to seek for solutions. It is necessary for them to draw lessons from failures, identify strengths and weaknesses of their companies in order to improve and overcome. Besides, they also need to be sharp-witted to exploit new factors, such as government’s support and market demands. Last but not least, they need to seek for support from community and associations. Stimulating demand of the domestic market is not an easy task while purchasing power of the domestic market declines and competition with imported goods increases. Consumers now have lots of choices for the goods they want. To be selected by consumers, it is necessary that goods and services produced by enterprises need to be diversifying, of good quality, safety, low production and distribution costs, etc.

Representatives of Big C supermarket say that in 2009, apart from brand names which already prove their position, lots of new products which have good quality, diversifying designs, and reduced production cost become choices of customers. Big C also opts to co-ordinate with Vietnamese producers to launch unique products which are distributed by the supermarket only. WOW, a brand name which focuses on necessary products such as paper, cooking oil, washing powder and instant noodles, etc. of lower prices (from 10 to 20 percent) than products of the same types have gained good feelings of customers. Many other brand names are also making effort to gain positive response from customers. Vee Sendy, T-up, and Viettien are such examples.

According to market experts, domestically made products are being selected more and more by customers. However, in order to occupy the domestic market, enterprises need to pay attention to the middle-class and people of low income while guaranteeing quality of products and service they provide. If Vietnamese goods have guaranteed quality, design and acceptable price, they are sure to be selection of consumers.

Trung Dung