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ASEAN products gain market foothold
The increased inflow of ASEAN goods into the domestic market has caught a lot of local manufacturers flatfooted, unsure of how to cope with the competition.
"We have done a lot of research, but cannot find out how other countries' products can be sold so cheap," said a senior official of the Cho Lon Plastics Company, well known for making children's toys.
"If we want to compete with them, we have to sell at lower than cost price," he added.
If local producers were not able to come up with effective strategies to hold on to and increase their market share in face of the increased competition, Viet Nam would become a "valley" that foreign goods pour into, the Sai Gon Giai Phong (Liberated Sai Gon) newspaper cited experts as saying.
The number of outlets for goods from ASEAN countries has increased gradually in HCM City since implementation began on May 17 of the ASEAN Trade in Goods Agreement (ATIGA) – aimed at lowering the cost of doing business and simplifying trade-related transactions in the region.
All kinds of goods from countries in the region are available in the market now.
These include candy, cookies, cosmetics, needles, thread, shoe, underwear and instant noodles as well as high-value goods like watches, electric fans, cosmetics and carpets.
Favourite ASEAN goods among Vietnamese consumers are household appliances, kitchen devices, and cosmetics from Thailand and Malaysia.
These products are sold at half or two–thirds of the price of the same kind from other countries.
It is estimated that 25 to 30 per cent of imported goods in some supermarkets are now from ASEAN, a sharp increase compared to just three years ago.
The Sai Gon Cosmetic Joint Stock Company used to have several supermarkets devote shelf-space exclusively for its products.
This space has now been taken by new brands from Malaysia, Thailand and Indonesia that offer 30 – 40 per cent discounts.
Once favoured by Vietnamese customers, locally produced cosmetic products like Thorakao and Lana have to contend with imported ones like Marry Ho, White Care and De Care.
Supermarkets now have specific strategies in place to import ASEAN goods as the tariffs applied on products from the bloc have decreased to 0 – 5 per cent.
Twin focus
While ASEAN also offers a huge market for goods from Viet Nam, second only to China, the Ministry of Industry and Trade says there has been a gradual increase in imports over exports.
Experts say Vietnamese manufacturers have to focus on strengthening their share of the 86-million-strong domestic market, as well as the 600-million-people market that ASEAN presents.
Bui Hanh Thu, deputy general manager of Sai Gon Co.op, said Vietnamese policy makers should learn from other countries and come up with effective commercial promotion campaigns.
Vietnamese manufacturers should invite their distributors to visit factories that help the latter feel secure about the products they have to sell, Thu said.
She also said that enterprises that join the Government's campaign to promote Vietnamese brands in overseas markets should be supported with 100 per cent or at least two-thirds of the expenditure involved, instead of the current 50 per cent subsidy they get.
ASEAN is the third largest export market for Viet Nam after the US and the EU.
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