Time is running out for Vietnamese businesses to consolidate their position in the domestic market as lower tariffs will make it much more difficult to compete against imported goods, industry insiders warn.
HCM CITY —
Local firms have to build their brands, improve products' design and quality, and strengthen their distribution networks, they say.
They also note that 2015 will be a year of reckoning for many local firms when more than 90 per cent of goods imported from ASEAN countries and China will enjoy zero tariffs under the ASEAN-China Free Trade Agreement.
Vu Kim Hanh, chairwoman of the Business Association of High-Quality Vietnamese Goods, said about two decades ago, quality was the top concern of consumers regarding locally made goods.
Now, besides quality, consumers were paying attention to design and brand names, she said.
She said domestic businesses struggled to build their brand names after Viet Nam joined the World Trade Organisation, which opened the domestic market wider to foreign goods.
In addition, local businesses had to compete with counterfeit and smuggled goods as well, she said.
Their difficulties had been worsened by high interest rates that had pushed up production costs, making locally-made goods less competitive, she added.
Hanh further noted that most Vietnamese businesses had brand names that were established around 20 years ago, while those of some foreign companies penetrating the domestic market had existed for 100-200 years and had a strong position in the world market.
"Thus what is happening is an unequal struggle between local and foreign companies in the domestic market," she said.
However, Hanh also praised local businesses for relentlessly improving their products' quality and design to win consumers' confidence. Many products have received the Vietnamese High Quality Goods Award based on consumer votes.
Le Van Tri, deputy general director of the Southern Rubber Industry Joint Stock Company (Casumina), said his firm and other businesses that received quality awards for 16 years in succession have never stopped improving their products and services to serve customers better.
The annual High Quality Vietnamese Goods Fair, first held 16 years ago, had helped many local businesses build up their brand and expand their distribution networks, Hanh said.
Participating in these fairs also helped them improve their product quality and design thanks to feedback from consumers, she said.
She said the fairs had helped brand names like Vinamilk, Hau Giang Pharma, Casumina, Vissan, Dai Dong Tien, My Hao and Miliket become more familiar to consumers.
Over the years, the fair had been organised more professionally and in accordance with customers' demands, she said.
The association would continue to organise more fairs displaying high quality Vietnamese goods to support businesses in marketing their products, especially in remote areas where distribution was weak, Hanh said.
"It would also support businesses to bring their products to traditional markets and rural and remote areas, so that they become more competitive in the domestic market and are able to penetrate ASEAN markets in the near future," she added.
Tri of Casumina said enterprises wanted the Government to create a healthy business environment by strengthening control over smuggling, setting up technical barriers against imported goods to protect consumers, and improving infrastructure facilities like transportation and power supply to facilitate distribution of domestic goods. — VNS