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Local firms neglect marketing
Local manufacturers are not taking advantage of marketing opportunities and should learn how to position themselves properly, business executives attending two retail sourcing events said yesterday.
Five leading international retailers are meeting for two days with local suppliers in the garden and outdoor products industry and fashion accessories field.
"Vietnamese businesses tend to see marketing as a kind of expense, in contrast to their global counterparts," said Minesh Pore, regional sales manager in charge of South Asia Global Sources, which organised the two events.
"That’s why the world buying community only knows about Vietnamese products via word of mouth, or bits of unorganised information that can be equally positive and negative," he said, adding that marketing deficiencies posed the biggest obstacle to local manufacturers" entering the global market.
"Some of their international sales managers cannot speak English properly, so how can they introduce themselves to international buyers?" Pore said.
He recommended that local exporters use Viet kieu (overseas Vietnamese) who are familiar with international business practices.
"The key is to position themselves at the right time, in the right format and through the right media," he said.
He said the economic downturn had presented the "right time" because global retailers would seek smaller orders during a time when they did not know how much they could sell.
This would offer an opportunity to local manufacturers, who were mostly small in size and could cater to big clients attentively, unlike China’s economy of scale which was too busy with huge orders to care about product quality, he said, pointing to recent safety scandals linked to made-in-China products.
He said manufacturers should cash in on business-to-business channels, including tradeshows, fairs, specialised websites or business consultants to enhance their visibility to world buyers.
Businesses should also know their unique selling points and match buyers’ particular interests, said Pore, who had helped local suppliers position themselves internationally.
"You (local exporters) can rely on skill, design and especially natural materials to build a reputation for your products," he said, adding that many companies were shifting from price-based to health-based competition because of the growing demand for healthy products in Europe and North America.
"Local producers are being credited for using natural materials like wood, rattan or clay which are abundant in the country," Pore said.
He highlighted the differences between local manufacturers and their Chinese counterparts, who use up to 80 per cent of synthetic materials making products.
He said Vietnamese workers were especially gifted in making handicraft products, given that "they had been making them for thousands of years," and Vietnamese design flourishes were "globally appealing".
Pore noted that Viet Nam had better political stability than its neighbours, including Thailand and Myanmar, and faster economic growth than Laos and Cambodia, but poorer infrastructure compared to China.
Pore cited the size of factories, quality control, number of designs and sophistication of products and clients as appealing factors in attracting international buyers, including ICA, A.R.E.N.A, Sears, Metro and ThreeSixty Sourcing.
American shift
"Our main interest is production, not marketing," said Huynh Le Dai Thang, managing director of Nghia Son Wooden Furniture based in Dong Nai Province.
He said many of his fellow players in the industry were not active or professional in their approach to new clients.
"On the other hand, world fairs expenses are also a big hurdle to us," he added.
However, Thang said that he had managed recently to receive about seven requests of information, five of which could become new orders.
He advertised his products on a website that global retailers often visit for industry information.
"For furniture products, the buyers attending the events require us to have Forest Stewardship Council-issued certificates to make sure we’ve done no harm to the forests and to demonstrate our production capacity," he said.
John Giang Tran, sales director of TranDucGroup, said that very few local exporters had an adequate knowledge of the American market, where he worked for many years.
"The US is shifting from China and Indonesia to Viet Nam to source furniture products," he remarked, pointing to Indonesia as the country’s biggest competitor in the industry.
"However, to be able to capitalise on this opportunity, local businesses should know about American buyers’ behaviour," he said, elaborating that suppliers could learn about them via their sales agents.
He cited Walmart, the world’s leading retailer, as an example.
"They usually have independent third parties to test and certify the quality of the products before picking any new suppliers," Tran said.
Vietnamese manufacturers wishing to enter the American market are supposed to approach these third parties first, including Bureau Veritas, the SGS and Intertek, among others.
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