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New focus on domestic market urged
Besides finding ways to boost exports, local manufacturers should also craft strategies to increase domestic sales, a senior economist said.
Speaking at a conference in HCM City last Friday, Le Dang Doanh said stimulating local consumption was a common trend among companies everywhere since exports were falling due to the global downturn.
With a population of over 85 million, a majority of whom were young, retail consumption had grown at over 20 per cent in recent years, which showed that the potential of the domestic market was huge, he said.
Enterprises should not consider stimulation of domestic consumption as a temporary measure, he said, but as a long-term strategy and implement it methodically.
To gain a strong foothold at home, they needed to research local demand and people’s consumption habits and their financial capacity to make products in styles, size, and prices suitable for each locality.
To effectively stimulate consumption, manufacturers also had to improve their distribution network, which currently involved many brokers who pushed prices up, he said.
"Manufacturers and distributors must find suitable modes of transport to take their products to rural areas," he said.
Ly Ngoc Minh, general director of Minh Long I Pottery Company, said domestic consumers had different tastes and requirements compared to those in foreign countries, and manufacturers must diversify their products and designs to meet local demand.
"Cutting costs to offer products at more competitive prices is also very important," he added.
Truong Thanh Furniture Corporation, which is among the few wood processors focused on the domestic market in recent years, shared its experiences at the conference.
Ngo Thi Hong Thu, its deputy general director, said to capture the domestic market, the corporation had set up a sales team and launched promotion programmes.
It had tied up with other wood processors who did not use the same kind of raw materials to open shops to offer customers more options. Thanks to these efforts, domestic earnings increased last year to VND100 billion (US$5.6 million) from VND42 billion ($2.36 million) in 2007, Thu said.
Lai Kim, general director of Nhat Tan Garment Company and deputy general director of Binh Tan Consumer Goods Production Company, said customers were increasingly opting for domestically-made products.
"But to capture the domestic market, enterprises have to offer warranties for their products and services," he said, adding if Vietnamese goods could guarantee quality and offer good designs and acceptable prices, they would be sure to be popular.
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