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Rural areas – an untapped market
Rural areas are considered a big potential market for Vietnamese businesses as more than 70 percent of the country’s population live in the countryside. However, this market has not yet been fully tapped.
Huge discounts, a shopping spree
The first consignments of quality Vietnamese goods have been delivered to the Long Xuyen, Vinh Binh and Chau Thanh districts of An Giang province. The businesses set up portable stalls displaying drugs, cosmetics, food and foodstuffs and household utensils, as well as banking services. Thanks to massive discounts, many local people went on a spending spree with receipts worth millions of Vietnamese Dong.
“I bought cooking oil, washing powder, shampoo, coffee and toothpaste which were all cheaper than those offered in the market,” says Nguyen Thi Hong Loan, a local living in Vinh Binh commune, Chau Thanh district.
For the rural market, experts say that businesses must study customers’ different tastes before marketing their products as there’s always a run on well-known products. Local people prefer products that are only VND500 cheaper than those in the market and they also choose products that look a little nicer than similar types available.
After the marketing campaign, many businesses find that many of their products which are popular in bigger cities are new to rural people. This means that distribution networks and marketing campaigns are ineffective.
“Never before have mobile businesses set up in rural areas,” says Do Thi Giau, Secretary of the Chau Thanh District Party Committee. “While organising a high-quality Vietnamese goods fair in An Giang, the organising board looked into market demand in several districts, including Chau Thanh where there are only 550 traders gathering at the Vinh Binh market with a small amount of Vietnamese-made products on sale there. This means that businesses have not yet paid due attention to the domestic market.”
Not an easy task
Recently, a mechanical engineering company in Hai Phong city launched biogas tanks onto the rural market, that use a composite instead of traditional bricks and cement. By applying this new technology, the tanks are relatively cheap, easy to use and maintain. But the problem is that rural people’s incomes and their level of education is rather low.
“Without proper marketing strategies, the products are not favoured by rural consumers,” says Nguyen Trung Kien, deputy director of the company.
Businesses need to know what kinds of products to market in rural areas.
“It is time consuming and costly for businesses to market their new products which suit all rural people’s tastes and budgets,” says Vu Thanh Son, general director of the Hanoi Trade Corporation (Hapro). “However, we have no other choice but to get on with it, otherwise we will lose this potential market.”
Meanwhile, Phi Ngoc Trinh, executive manager of Ho Guom Garment Joint Stock Company, says that his company has not developed any business strategies for the domestic market since it was established. Its domestic revenue only makes up 5 percent of the company’s total. He fears that his company will not be able to compete against other businesses if it turns to the rural market.
“It is not easy to gain a firm foothold in the domestic market,” says Mr Trinh. “Therefore, the company must create a niche market for itself. Currently, we are focusing on women’s jewellery and children’s toys for the domestic market.”
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