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Exporters find domestic market tough nut to crack
Vietnamese exporters who have been affected by the downturn in international markets say it is more difficult to win hearts of locals than overseas customers.
The global economic recession has hindered expansion of the export market for local producers. Vietnam’s exports declined 0.1 percent to US$18.64 billion in the first four months of the year, according to the General Statistics Office.
Many producers have since decided to shift their focus to the domestic market and expand their market share at home, but are finding it a hard task.
“The game seemed to be easy at home but it even takes more effort to win local hearts,” said Lai Kim, chief executive officer of Nhat Tan Garment Company.
Kim admits that the company, which started exporting garments in 1992, did not have a strong distribution system here, nor did it run any promotional campaign to build up its local image before its foray into the domestic market.
The garment producer is now struggling to build strategies for production, distribution and promotion for local markets.
“For exports, we were not much worried about selling the products; we could concentrate on manufacturing as requested,” the CEO said.
Ly Ngoc Minh, general director of Minh Long I, said the most difficult problem that the ceramic maker has had to face was to convince local customers to choose its products, as their prices are very high.
Minh said the company has invested a lot in design and production to supply international customers with high quality ceramic products, including tea cups and bowls. Foreign customers could easily accept the high prices but locals may not, Minh said.
Joey Ngo, deputy general director of Trung Thanh Furniture Corporation, said the domestic market had potential for wood processors as Vietnam’s current furniture spending per capita was very low at $10, compared to $250 in Europe, the firm’s main export market.
The corporation has focused on stabilizing and balancing its sales in foreign and domestic markets, Ngo said, but added that its furniture products were still expensive for most consumers in Vietnam. According to Ngo, only 20 percent people in big cities are able to afford its furniture products.
Many other businesses say being patient, creative and understanding are important qualities for exporters trying to switch their focus to home.
But economist Le Dang Doanh said the domestic market should not be considered the only focus for export-oriented businesses as they still need to boost exports to keep the national economy growing.
However, he conceded that due to falling prices and demand on the global market, Vietnamese exporters will find it more difficult to achieve what they did last year.
The government predicts export growth will slow to 13 percent this year from the scorching 29.5 percent in 2008 because of the economic downturn in important markets like the US, Europe and Japan. Exports earned Vietnam $62.9 billion last year.
Vietnamese exporters should reduce production costs to make their products more competitive while maintaining high quality so that they can retain their overseas markets, Doanh said.
High prices and a lack of marketing are making things more difficult for export-oriented firms
Minh Quang
thanhnien
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