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Firms switch focus to domestic market, find going good
Many companies have boosted their domestic sales by opening more outlets since the beginning of this year as a strategy to cope with the global recession.
Cao Thi Ngoc Dung, General Director of Phu Nhuan Jewelry, said her firm set expansion of its domestic market as the top priority in late 2008 after seeing exports hit by the recession. It plans to open 29 new stores this year.
The jewelry maker said its move to boost local consumption contributed to total revenues of VND4.56 trillion (US$256.5 million) in the first quarter, a 200 percent year-on-year increase.
“To make new stores successful, understanding customers’ demand and tastes is key,” Dung said.
Developing the local market is not only a way to cope with falling exports but also a long-term strategy to balance domestic and overseas sales, the industry and trade ministry-run Vietnam Economic News quoted Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry, as saying.
Binh Minh Plastics Joint Stock Company expanded its distribution network by a fifth to 320 outlets in the first four months of this year.
Most of the new outlets are in the south, said Nguyen Thi Kim Yen, the firm’s Deputy General Director.
Yen said the expansion helped boost first quarter sales to VND190 billion ($10.67 million), up 20 percent from the same period last year.
As the economic slowdown prompts customers to tighten their belts, Saigon Cosmetics Corporation is finding opportunities to boost sales of its perfume products, which cost less than imports.
“Earlier, customers did not prefer Vietnamese perfumes, but the trend is changing now,” said Tran Phuong Ivy, Deputy General Director of the company.
She also said the company had done market research in some provinces and found out that customers like perfumes that last long and cost less than VND300,000 ($17.53) a bottle.
Saigon Cosmetics Corporation has opened more than 30 stores nationwide.
The government has said it would provide more than VND51 billion from its coffers to help companies expand locally amid the global slowdown.
The money would be used for market research so that companies can devise strategies to expand and increase their domestic sales, according to a statement posted on the government’s website late last month.
“This trade promotion program is part of the government’s emergency measures to avert an economic slowdown and ensure socioeconomic stability,” the statement said.
A highlight of the program is the Vietnamese Goods Week, which ended on May 3 in Ho Chi Minh City.
The event, which offered discounts and promotions on products made by more than 1,000 domestic firms, attracted nearly 400,000 people and generated revenues of VND40 billion. Companies signed up 175 new agents, the event’s organizers said.
With the world’s 13th-biggest population, Vietnam has a large domestic market whose purchasing power is rising rapidly. Retail sales last year were worth $58 billion.
thanhnien, vietnamplus
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