“Made in Vietnam” Brands Thriving

The resolution of Vietnam’s trade sector is reflected by the total value of goods and social consumer services at VND1,994 billion in 2011, up 29.2 percent from 2010. Given the current context, the growth of roughly 30 percent is very impressive. This result indicates that the domestic market is a real locomotive of the national economy and major contributor to GDP growth.

 

Vietnam’s trade sector has adopted plenty of effective solutions in 2011 like continuing the “Buy Vietnamese” campaign – a government-backed campaign that encourages Vietnamese people to prioritize buying Vietnamese goods; launching countryside vendors; and organising sale programmes.

 

Ms Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, said: "In 2011, domestic difficulties cause direct adverse impacts on production and business operations of enterprises. Meanwhile, the budget for national trade promotion programmes in general and trade promotion contents for domestic and countryside markets in particular is limited. However, to date, with the efforts of localities and enterprises, domestic trade promotion has produced encouraging results. The distribution of Vietnamese goods in rural, mountainous and remote regions catches the attention of authorities and enterprises. Sales programmes attract a lot of buyers and initially build up the trust of consumers in domestically manufactured products.”

 

According to reports submitted by Departments of Industry and Trade in 33 provinces and cities, 156 countryside sale programmes were launched in 2011 with the participation of more than 1,600 enterprises. Notably, sale programmes in border provinces also attracted consumers in neighbouring countries like Laos and Cambodia.

In 2011, 35 provincial and municipal Departments of Industry and Trade also organised 32 promotion programmes and attracted 3,649 companies to take part. The promotion value of these campaigns exceeded VND100 billion.

 

The Departments of Industry and Trade organised many trade fairs and exhibitions to introduce products to consumers. These events help change the habits of local consumers. In 2011, the Departments of Industry and Trade hosted 128 trade fairs and exhibitions, bringing together 11,026 companies and generating revenue of VND1,495 billion. Besides, the Departments coordinated with event organisers to supervise 373 trade fairs which drew the participation of 21,535 businesses.

 

It is clear that after two years, the “Buy Vietnamese” programme has produced initial positive results. Made-in-Vietnam goods dominate shelves in supermarkets. In particular, Saigon Co-op supermarkets report to sell nearly 95 percent of made-in-Vietnam goods, said Deputy Minister Ho Thi Kim Thoa.

 

Vietnamese consumers generally have a better assessment of local goods. According to recent research on consumer trends conducted by Nielsen, up to 90 percent of citizens in Ho Chi Minh City and 83 percent of citizens in Hanoi said they would possibly or absolutely buy more Vietnamese goods.

 

Ms Vu Kim Hanh, President of the Vietnam High Quality Goods Association, said: "Trade promotion programmes will continue to be the stepping stone for the objective of selling Vietnamese goods in every corner of Vietnam in the coming time. The people are now very careful with goods without clear origin. According to our surveys, even low-quality Chinese products have to be illegally labelled as “Made in Vietnam” to sell in Vietnam.”

 

As they understand the significance of those programmes, companies proactively take part in and creatively develop strategic products for long-term sustainable development. Obviously, good design and quality of Vietnamese goods are building the trust of consumers.

 

The “Buy Vietnamese” campaign has become a lifeline for exporters. Mr Le Tien Truong, Vice President of the Vietnam Textile and Apparel Association (Vitas), said: Garment and textile are always the top forex earner for the country in the past years. Nonetheless, declining demand from traditional customers like the United States (US) and the European Union (EU) are putting pressure on Vietnamese producers. When Vietnam National Textile and Garment Group (Vinatex) focused more on the domestic market, its revenues rose 15 percent year on year in 2011 to VND17,200 billion. Many garment and textile companies like Phong Phu and Viet Thang earned trillions of Vietnamese dong on the local market.

 

According to a recent survey by the Ministry of Industry and Trade, two years after the “Buy Vietnamese” campaign was organised, the localisation ratio in inputs, materials and equipment rose 25 percent on average. Mr Vu Thanh Binh, General Director of State-owned Vietnam Paper Corporation, said the localisation rate in paper production increased, bringing down the ratio of imported materials from 74 percent to 50 percent and the ratio of foreign equipment from 36 percent to 12.9 percent.

 

“Vietnamese companies have never been as determined to build their brands and advertise on the local market as now," said Mr Le Tien Truong. "Previously, they regarded the domestic market as the secondary one or a backyard, and they exported all the best products. Now, they return to the local market, they understand the potential of a market with nearly 90 million people.”

 

The domestic market is more active in the first days of 2012 as the Lunar New Year or Tet, which falls in late January, is coming. This is a peak shopping season for the year. Most companies have stockpiled goods for Tet; thus, the supply is guaranteed. Commercial centres and producers have launched New Year promotion programmes to catch the attention of consumers. In 2012, local sales revenues are estimated to rise 20 percent.

 

To create a good impression among consumers about Vietnamese goods, State management over commercial activities need to be strengthened to bring an end to trade fraud, smuggling, illicit trade, counterfeiting, and trading of knock-offs and substandard products, said Mr Nguyen Van Dong, Deputy Director of the Department of Industry and Trade, Hanoi. Goods are tagged prices and sold at quoted prices. Markets, supermarkets, trade centres and general stores need to be decorated to make buyers more relaxed, in addition to having better security, environmental protection and fire safety.

 

Mr Huynh Khanh Hiep, Deputy Director of the Department of Industry and Trade, Ho Chi Minh City, recommended that local market watchdogs cooperate with the police force to conduct patrols to nip smuggling and trade fraud in the bud.