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Consumer goods makers shun rural areas
The nation's consumer products manufacturers are still unwilling to invest in developing rural markets despite the large percentage of the nation's population that still lives in the countryside.
"Farmers are keen to buy low-priced products they can afford, and this goes against our company's focus on middle-and upper-income earners," said Ha Noi Textile and Garment Company Deputy Director Nguyen Thanh Binh, admitting that the company has targeted urban markets.
There are about 60 million consumers living in rural areas, but the rural consumer market makes up only 27 per cent of the country's total retail sales, according to a recent survey by market research firm A.C. Nielsen.
But, Binh said, the availability of cheap Chinese products had made it nearly impossible for his firm to compete for this market.
Business Studies and Assistance Centre Director Vu Kim Hanh said that only about a dozen major enterprises had products widely distributed in rural and remote areas, including Kinh Do Group, Hau Giang Pharmacy Joint Stock Company, Pepsico Viet Nam, Unilever Viet Nam and Procter&Gamble Viet Nam.
These large-scale enterprises have been successful in offering reasonable prices, good product quality and a wide distribution network, Hanh said, but many smaller enterprises remained hesitant to try to set up distribution in rural areas.
A long-term retail strategy for domestic products needed to be developed to help these enterprises produce high quality, low-priced products and establish a comprehensive distribution network, said National Centre for Scientific and Technological Information Deputy Director Phung Minh Lai.
"Rural markets should not just be a place to dump substandard batches of goods," Lai said, noting that many distributors took advantage of the naivety of rural areas to bring in low-quality or imitation products.
Nguyen Thi Men, a consumer in Thai Binh Province, said she had bought a sweater of unclear origin at a very reasonable price but it had shrunk after a few washings.
"I was told that the sweater would not have been that cheap if it had been of decent quality," Men recalled.
Rural people tended to rely more heavily on the suggestion of vendors when shopping, commented the head of Ha Noi's market watch department, Trinh Van Ngoc.
Their first concern was whether the product fit into their budget, with product quality coming second, Ngoc said.
The Government needed to implement strict measures to curb contraband goods and raise consumer awareness about product safety and standards, Binh said.
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