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Businesses reaping fruits of domestic market-oriented strategy
After a period of going after the domestic market instead of relying on exports in the context of the global economic recession, domestic businesses now are reaping fruits. A lot of showrooms, sales agents have been established, and companies’ turnovers have increased significantly.
Several months ago, when sales were slow, General Director of Viet Steel Joint Stock Company Do Duy Thai himself went to Binh Phuoc, Dac Nong and Gia Lai to survey the markets. Finally, Thai found out that domestically-made products were not selling there because of the flooding of imports. Domestic producers needed better pricing policies and better distribution networks.
Thai decided to upgrade the distribution networks in the areas, and the efforts have brought the desired effects with the turnover of Viet Steel on the increase.
Expanding the retail network
Deputy General Director of Binh Minh Plastics Joint Stock Company Nguyen Thi Kim Yen said that the number of Binh Minh retail agents has increased from 180 to 320 just within a short time. In the first four months of the year alone, the number of sales agents increased by 20%. Most of the newly-opened sales agents are located in the east and west of the southern region.
Right after his company’s 10th jewellery shop, located on Hau Giang road in district 6 of HCM City, became operational in mid April 2009, Cao Thi Ngoc Dung, General Director of Phu Nhuan Jewellery Company, approved a plan to open 10 more shops.
The expansion of the retail network proves to be reasonable: In the first quarter of the year alone, the company’s turnover reached VND4,562bil, up by 200.2% over the same period of last year.
Luxury item producers have also found opportunities in the domestic market. Tran Phuong Ivy, Deputy General Director of Saigon Cosmetics Company (SCC), said that the crisis proves to be an opportunity for domestic cosmetics products. Previously, customers did not like Vietnam-made perfume, but the situation has become quite different.
To date, SCC rents 10 showrooms and has 20 SG Perfume shops in Vinh Long, Can Tho, Ca Mau, Phan Thiet which have been operating under the mode of business cooperation with retailers.
Try to understand customers
Dung from PNJ said that right at the end of 2008, the company realised that it needed to develop the domestic market, when export markets showed signs of slowing down due to the recession. Therefore, the company decided that it would have 29 more shops in 2009.
However, Dung said that the most important factor needed to keep the shops and agents operational is that producers need to well understand the demands and tastes of customers.
SCC, before conquering the domestic market, also sent staff to provinces to survey markets. After finding that most consumers like products which maintain their fragrance and have soft prices of less than VND300,000, SSC decided to develop its distribution network to boost sales in the localities.
Ivy said that SCC has found a new way for its future: looking for and conquering the new market segments and focusing on products in which the company has advantages.
Meanwhile, Binh Minh Plastics Company tries to lure domestic consumers with its quality policy and flexible post sale scheme. In order to conquer remote markets, Binh Minh has applied an open policy to 2nd and 3rd class sales agents.
Binh Minh has reported the turnover of VND190bil in the first quarter of 2009, up by 20% over the same period of last year.
“If the company had not expanded the distribution channel, it would not have seen its products reach as many localities as nowadays,” she said.
VietNamNet, TT
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