Meanwhile, the skyrocketing lending interest rates only deepen the sorrow of many local electronics, processed food, and beverage producers, as well as confectioners.
Lan, an attendant at the HM electronics center on Ho Chi Minh City’s Hoang Van Thu Street, said the center has around 300 unsold air-conditioners which were imported earlier this year to prepare for the coming high demand of summer.
“But customers have mainly come to just look and then leave,” said Lan.
Dinh Anh Huan, director of dienmay.com, said that while electronics businesses traditionally hiked prices by 10 – 18 per cent at this time of the year, they have now had to offer promotional programs, or even sell at a loss due to low demand.
“Even the food commodities suffer low consumption if they are sold without promotions,” said Nguyen Phuong Thao, director of Maximark Cong Hoa.
Meanwhile Truong Minh Thuan, director of Seaspimex food manufacturer, said unsold stock now accounts for 30 per cent of the company’s registered capital.
“Since food commodities have expiry dates, all unsold products have to be disposed of,” he said.
Nguyen Thi Thanh Lam, deputy director of Saigon Food, also admitted that sales have dropped by 30 per cent against the same period last year.
Cosmetics and confectionary producers have also failed to attract customers with their promotions, which have been offered on almost every possible occasion, from Valentine’s Day to the supermarkets’ birthdays.
“The supermarkets sometimes demanded to buy at so low a price that I would certainly incur losses, but I had no choice,” said an owner of a sheet and pillow facility in Tan Binh District.
“Selling at a loss will help reduce the unsold stock, and give me money to clear bank interest.”
Nguyen Xuan Hai, managing director of the southern Big C chain, admitted that manufacturers have been more enthusiastic in cooperating with supermarkets in the shopping campaign than in previous years.
Bargaining away assets, shutting down
C, the director of a food processor in suburban Cu Chi District, said he is seeking buyers for the company’s production line, which is worth nearly $1 million (roughly VND21 billion), after importing it two years ago.
“The more I use the line, the larger the loss becomes,” said C, who is selling the assembly for only a few billion dong.
Since the end of last year, a number of electronics retailers have gradually shut their doors, despite their slashed prices and efforts to empty unsold stock.
Consumption of air-conditioners and TVs has slumped by 81.8 per cent, and 6.1 per cent, respectively, according to figures from the Ministry of Industry and Trade.
The latest player to hang the white flag is the Best Caring supermarket in Phu My Hung, District 7.
“The number of electronics retailers to shut down operations will continue to soar in the second quarter, with the market remains frozen and rental contracts come due,” said the director of an electronics center in Go Vap District.