Burgeoning Home Trade

 

In 2006, the domestic market encountered numerous difficulties such as changeable climates, frequent storms, an outbreak of foot & mouth disease, the return of avian flu and rice disease in southern provinces, causing higher prices of food products in late 2006. In the fourth quarter of 2006 alone, the price of foodstuff grows 9-10 per cent, pork 12-14 per cent, beef 7-8 per cent, chicken 10-12 per cent, seafood 13-15 per cent and the price of vegetables increased VND1,000-2,000 a kg.

 

However, purchasing power will rise even more strongly late this year and in the Lunar New Year of Dinh Hoi 2007 although the prices of goods are high. According to Mr. Vu Vinh Phu, Former Director of Hanoi Department of Trade and Chairman of Vietnam Supermarket Association, the soaring demand is partly due to the psychology of the people after Vietnam became a WTO member and successfully hosted the APEC events. More importantly, the people are full of hope about the future prosperity of the nation.

 

According to the forecast by the Hanoi Department of Trade, the sales during Tet months in Hanoi will grow 30 per cent against other months of the year and 15 per cent against the same period of last year. According to Vu Vinh Phu, Chairman of Vietnam Supermarket Association, the people tend to buy more commodities in supermarkets. If the average daily sales turnover of Metro Cash & Carry is VND2-3 billion, it will jump to VND10 billion a day during months of Tet. This is also the case for other supermarkets like Intimex.

 

Mr Nguyen Xuan Hong, a representative from Northern Food Corp., said the price of foodstuff will not go strongly as the Government has decided to suspend the export of several staples to stabilise the domestic market. Commodities manufactured this year will be more diversified and packaged more beautifully and conveniently. If the Vietnam Northern Food Corp. (Vinafood 1) provided five types of goods in 2006, the corporation has prepared 10 types of foodstuff for this Tet, including 2,000 tonnes of wheat, 5,000 tonnes of fragrant rice and 3,000 tonnes of common rice.

 

According to Mr Dien Khanh, Director of Planning Division under the Hanoi Department of Trade, the selling volume of staple foodstuff like rice, pork, beef, chicken, seafood, processed foodstuff, vegetables, cookies, cakes, fruits and others will grow over 10 per cent. Other commodities like electronics and electrical appliances, apparels, interior decors, gifts, petroleum products and gas also have their prices increased by 15-20 per cent. The estimated staple foodstuff volume for the Hanoi market during Tet months is as follows:

 

Rice	20,000-21,000 tonnes
Pork	10,000-12,000 tonnes
Beef	1,800-2,000 tonnes
Seafood	3,000-3,500 tonnes
Vegetable, fruits	38,000-40,000 tonnes
Cookies, cakes	1,300-1,500 tonnes
Sticky rice cakes	2,800-3,000 tonnes
Drinks	10,000,000-12,000,000 bottles
Cigarettes	2,800,000-3,000,000 packages

Tet is a shopping season with many trading activities, such as the annual Spring Trade Fair at Giang Vo Exhibition Centre - one of the largest trade fairs in northern Vietnam in a year. According to Ms Khue Anh, representative from Hanoi Trading Corp., this year’s trade fair needs better managing and we proposed that competent organs select exhibits and address the showcase of products of unclear origin, unclear brand names and unclear manufacturers. Hanoi Trade Corp. (Hapro) needs assistance to gather its 23 member companies in a section to help visitors to select and differentiate between the quality of their products with others.

 

Tet is also the time for the mushrooming of counterfeit commodities on the market, causing damage to both manufacturers and consumers. Mr Trang Van Trung, Manager of Planning Department of Hanoi Wine Joint Stock Company, said: “Although each enterprise needs to protect itself from counterfeit goods, we also hope that competent authorities will join forces in addressing the circulation of counterfeit goods, which ultimately harm consumers.” Trung said, this year, his company has prepared sufficient wines for its 300 sales agents nationwide, including one million litres of wine at hand to serve the demand of the people. In Hanoi, consumers can buy the company’s wines at 70 sales agents and 30 supermarkets.

 

Meanwhile, Phu said, manufacturers should set up funds to fight against counterfeit goods and smuggled goods. They should also have the responsibility in food hygiene and safety throughout their production phases and cooperate with each other to protect their business and prevent fire and explosion. Phu named three matters to ensure a good trading. Firstly, enterprises should reserve sufficient key commodities like rice, salt and vegetables for the people and they can borrow interest-free loans worth VND100 billion (and VND250 billion for enterprises in Ho Chi Minh City). Secondly, authorities should get rid of trade barriers to encourage good circulation and prevent several people from seeking bad profits. Thirdly, it is necessary to prepare enough good means of transport and especially introduce to the public reliable manufacturers and goods to address the widening of smuggled and counterfeited commodities.

 

However, the key issue is the quality of goods and the certification of qualitative goods. According to Mr Han Tu Do, Deputy Director of Hanoi Department of Health, the existing licences can guarantee only 30 per cent of commodities in circulation on the market. The challenge for market authorities is how to manage 70 per cent of unlicensed goods.