Impressive Domestic Trade

9:59:32 AM | 7/24/2014

The Ministry of Industry and Trade of Vietnam said retail revenue was estimated at VND1,438,962 billion in the first six months of 2014, representing a year on year rise of 10.73 percent. The consumer price index (CPI) in June 2014 rose 0.3 percent over May.
Market stabilisation
Commodity market was relatively stable in the first six months of the year, without major fluctuations that could cause market destabilisation. Manufacturing performance was improved, encouraged by soft bank loans while commodity and real estate markets also had positive developments. However, tensions at the East Sea from the beginning of May worried many people and affected consumer and investor confidence.
In the first six months of the year, fuel and energy prices were regulated and increased with the least impact on commodity markets, especially amidst complicated development on the East Sea. Prices of essential goods were stable due to little-changed world prices, ample supplies and balanced demand. However, prices of agricultural products plunged on good harvests and abundant supplies, thus affecting farmers’ incomes. The Ministry of Industry and Trade coordinated with some localities to purchase farm produce for farmers to ease bad effects.
Pressure for trade promotion
As Vietnam gains deeper integration into the world economy, its locally made products have to face stiff competition from imported ones. Therefore, the construction and expansion of distribution systems requires all systematic strategies and substantial investments, which hinder Vietnamese small and medium enterprises (SMEs) trying to boost trade promotion to expand markets.
Besides, communication campaigns aimed at encouraging Vietnamese consumers to use local goods and boosting retail sales on mass media are too uncoordinated to form an effective media campaign. Hence, these activities have minor impacts on consumer psychology and behaviour, while some consumers are still keen on imported goods.
In major provinces and cities, the Departments of Industry and Trade have worked out their own trade promotion programmes but they lack coordination with other localities to enhance overall effectiveness.
Furthermore, local trade fair exhibitions fail to attract big businesses and poorly connect producers, distributors and consumers. Many events are only limited to display, introduction, wholesaling or retailing of goods rather than build brand names in the mind of Vietnamese consumers. Countryside vendor programmes lack sustainability and fail to set up solid distribution channels.
For their part, most businesses lack experience and salesmanship, especially customer care skills and trade promotion experience. Meanwhile, many fail to meet domestic consumers in quantity, quality, category and price and to compete with foreign imports, especially materials and specialised equipment for manufacturing. As many inputs depend on foreign prices, prices of locally made products are still high in the region. Some companies use trade fairs and exhibitions to commit trade fraud and sell stockpiled goods, knockoffs, counterfeits and nearly expired goods, thus weakening the consumer confidence in local products and undercutting the effectiveness of the campaigns.
State budgets for trade promotion activities are limited and unstable while the needs of enterprises are growing, the number of firms is increasing and the demands of consumers for Vietnamese goods are rising, especially in rural areas and industrial zones.
Market management forces face a lot of difficulties to deal with complicated trade fraud tricks as sanctions are considered not strong enough. Most violations are treated administratively, not criminally. Many victims even refuse to coordinate with authorities to handle violators. Equipment, means and resources of market management authorities, appraisal costs, expenses for demolition of counterfeit goods and pirated products are not guaranteed.
Huong Ly