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Vietnamese goods reaping profit thanks to… expensive prices
Unlike some producers which only sell cheap ‘second-class’ products in the domestic market, other enterprises have been succeeding in the market because they have been offering high-quality goods.
An Phuoc brand name shirts: You get what you pay for
Ten years ago, many Vietnamese consumers might have been surprised when they entered Pierre Cardin shops, a famous French brand name, and saw shirts and western clothes here with An Phuoc brand name.
Ten years later, products with An Phuoc brand name have become superior to Piere Cardin’s shirts in terms of volume of products on display at shops. This is simply because An Phuoc has become a well-known brand name in the domestic market.
In 1997, Nguyen Thi Dien, General Director of An Phuoc Company, made a vital decision: to go after the domestic market when export markets were narrowed due to the Asian financial crisis.
An Phuoc decided to negotiate to get the Pierre Cardin brand name franchise and then ‘gave birth’ to a series of products with its own brand name of An Phuoc with the same method of service. An Phuoc products have sale prices much lower than Pierre Cardin products, while they are just a little inferior in terms of materials.
“It was very difficult at that time,” Dien recalled about the time when An Phuoc products were first marketed.
“Customers were ready to pay a lot for Pierre Cardin shirts, but they said An Phuoc shirts were too expensive,” she said.
However, An Phuoc has been insisting on the idea that the products sold on the domestic market must not be low-quality products. It has found the main clients for its products: businessmen and office workers aged over 30 years old.
At first, An Phuoc limited the number of its shops in order to ensure the high quality of products and post-sales services. To date, An Phuoc remains the only garment company which does not have a sales agent. All the 70 shops nationwide are run by An Phuoc itself, and the same sale prices are applied from the north to the south.
After 12 years of patience, An Phuoc, which started its business as an exporter, has cemented its firm position in the domestic market with the turnover increasing gradually from zero to 30 and then 40-50 percent and 60 percent.
Minh Long porcelain: Products for domestic consumption better than exports
Ten years ago, China-made porcelain was dominating the domestic market, while Hai Duong products, the once famous brand name, were weeded out from the market, and a lot of other producers closed their doors.
However, the situation is quite different now. Vietnamese families now feel proud to have porcelain products with Minh Long brand name, a 100 percent Vietnamese-owned brand.
Like An Phuoc, in 1990s, 98 percent of Minh Long’s products were exported. The company only decided to target the domestic market in 1996, urged on by General Director Ly Ngoc Minh.
Minh decided to conquer a narrow market segment: high-quality porcelain products. Nano-coated dishware of Minh Long has won customers’ confidence though it is very expensive, at 1-3 million dong per piece.
Minh decided to sell high-quality products because he found out that in selecting china, Vietnamese consumers were more demanding than foreigners.
“Minh Long’s exports sometimes are not as good as the products for domestic consumption,” Minh revealed.
Domestic consumers now account for 60 percent of Minh Long’s total revenue, though Minh Long has been famous for… expensive products.
What is the lesson?
A lot of enterprises have returned to sell products on the domestic market after they found export markets narrowing. However, as the domestic market has been controlled by imports, they have criticised Vietnamese consumers for favouring imports over domestically-made products.
Instead of criticising Vietnamese consumers, An Phuoc has successfully persuaded consumers to choose its products for the benefit of consumers themselves.
Meanwhile, Minh thinks that in order to persuade consumers to love Minh Long’s products, Minh Long products need to become loveable.
While many others try to sell their best products abroad and sell second-class products on the domestic market, Minh Long is doing the opposite. This is what Japanese consumers do in order to win consumers’ confidence. All Japanese people well understand that products for domestic consumption are better than exports.
Phan Hung
vietnamnet
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