BASEAFOOD: Wakening Potential Market

Mr Tran Van Dung, President and Director of Baseafood, said, the company had to weed out many export batches due to short quantity although the quality was extremely good. Or, the company had to accept to sell at lower prices to other customers because the fish size was smaller than the specification in export orders. Each year, the company had to throw away many tonnes of such fish. To avoid losing more loss, he decided to find a niche on the domestic market.

 

This category of product features direct advantages like deliciousness, cheapness, sanitation, fast processing and instant use. When the company organised market survey programmes, customers immediately accepted its products and agents ordered more categories. This was good news when a company make a start a new market.

 

The initial success revealed that Baseafood had disregarded the potential domestic market for a long time. This further prodded Baseafood to conduct researches to introduce more products made from shrimp, fish, squid etc. to diversify its seafood items.

 

Another advantage was Ba Ria - Vung Tau province did not have local speciality to sell to tourists. This fact also inspired Baseafood to add determinations to create locally characterized products. Mr Dung added that the company initially started with small scale and simple packaging but gradually upgraded production scale, packaging process and designs. Interestingly, the company realised domestic consumers also accepted higher than export prices.

 

To exploit advantages and develop the local market, Baseafood decided to build up the ISO quality management standard and ensure all required standards like HACCP and CODE Europe, and standards in Japan, South Korea and other markets as well. Therefore, the prestige of the company’s products on the domestic market was quickly uplifted.

 

Happily, disqualified export products (size, weight) are sold very well in the domestic market. As a result, domestic sales increase high year after year. Before the company focused on the domestic market, its sole export reliance was affected by global developments. Previously, each year, the company earned an annual turnover of less than US$7 million and a profit of VND300 million. After tapping the domestic market, even in the first year, Baseafood saw an increase of 5 percent in total sales and the revenue increment rose to 7 percent, 10 percent, 15 percent and 20 percent in the following years. At present, domestic sales account for over 20 percent of its annual revenues of VND300-400 billion. The rate of profits in the domestic market is higher than that in export, standing at 50-10 percent. Moreover, the company creates more jobs and ensure stable incomes for its staffs. Specially, when export orders slump as in the recent global economic crisis, the domestic market becomes the last straw for Vietnamese companies to survive and develop. In 2008 and 2009, exports tumbled 50 percent and selling prices dropped 15-35 percent but the domestic market helped the company weather the storm, keep staffs and strengthen ties with material suppliers.

 

To expand domestic sales, Baseafood set up enterprises responsible for this business, which supervises product quality and boosts marketing activities. To date, in Ba Ria - Vung Tau province alone, the company has four distributors and 10 agents. It also widens its presence in surrounding provinces. For instance, in Dong Nai province, the company has distribution points in Long Thanh, Bien Hoa, Long Khanh and Vinh Cuu distracts. It has also made presence in Ca Mau, Dak Nong, Ho Chi Minh City, and other localities. Last but not least, at trade fairs in Dong Thap, Can Tho, Hanoi and other places, Baseafood’s products are warmly welcomed by customers. Many customers purchase Baseafood products to present friends and relatives, especially foreigners. From initial 5 - 10 products, the company now has more than 200 products packaged in different weights to meet diverse demand of customers.

 

Perhaps, after only five years of exploring, Baseafood has won the absolute trust of domestic customers. Director Tran Van Dung the company continues to conduct researches to introduce more products for customers. The firm targets to drive the domestic sales to 25 percent of its revenues and equate domestic and export turnovers.