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Businesses look to new markets in the countryside
With exporters struggling, Vietnamese businesses have found a massive new market – right on their doorstep.
In the past, Vietnamese producers had only focused on exports until markets narrowed because of the global financial crisis. However, for many that was the point when they discovered a new market within Vietnam with great potential - the countryside.
“It is quite late for Vietnamese businesses to bring high quality goods to rural areas to sell now,” said Vu Kim Hanh, Director of the Business Studies and Assistance Centre (BSA) at a conference reviewing goods brought to rural areas in the last seven months on October 21.
Hanh said that when southern businesses recently brought goods to sell at Ben Cat district in Binh Duong province, just some tens of kilometers from the commercial hub of HCM City, they heard local residents complaining that the localities seriously lack goods to purchase.
Meanwhile, far from countryside stereotypes the local average annual income of 48 million dong per annum ($2,823), mostly from rubber growing, is higher than the average income per capita at $1,000
Tran Cong Dong, head of the Luc Ngan district’s Industry and Trade Division in the northern province of Bac Giang, said local residents do not have the opportunities to use Vietnam-made high quality goods, while they are mostly using made-in-China products.
The two-day sale of Vietnamese goods in the district attracted 12,000 visitors and brought 665 million dong in revenue to businesses. More importantly, Vietnamese producers realized rural areas are hungry for good quality Vietnamese goods at reasonable prices.
Since March 2009, under the programme ‘bringing Vietnamese goods to rural areas’, nine sale trips have been organised by Vietnamese businesses to seven provinces in the south. More trips are expected to be organised with the destinations in the northern region.
At first, only ten businesses joined the programme, but the figure has risen to 80.
However, analysts have warned that if Vietnamese enterprises do not have reasonable strategies on market development, they will still lose the rural market, even when they have succeeded with recent sale trips.
Dong from Luc Ngan district said that if producers want to sell goods to farmers, they need to understand them. As farmers earn money from selling farm produce, if enterprises help them to sell then they will be able to ‘win their hearts’.
Besides, Dong said enterprises should consider flexible payment modes, including the deferred payments, to give farmers more chances to access Vietnamese goods.
Meanwhile, Nguyen Nguyen, business director of Saigon Paper Company, noted that 70 percent of the Vietnamese population lives in rural areas and consume 40-50 percent of the total volume of goods.
This means rural areas are a huge market. However, producers, when designing their products, mostly seek to understand urban consumers.
“In order to persuade rural consumers to use their products, enterprises need to provide products that fit them,” Nguyen said.
vietnamnet, vneconomy
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