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Losing control over traditional markets, domestic products unsalable   2009-09-10 - Viet Nam Net

Nearly 90 percent of goods in Vietnam are being distributed through traditional distribution channels. Meanwhile, Vietnamese producers have lost control over traditional markets, which explains why Vietnam-made products are not selling.


Vietnam’s retail network distributing foreign-made products


Dong Xuan, one of the most famous wholesale markets in Vietnam, located in the central area of Hanoi, now looks like a Chinese market.


According to Dinh Thi My Loan, Deputy Chairwoman of the Vietnam Retailers’ Association, a recent survey at Dong Xuan Market showed that only 20 percent of the fine arts and souvenir goods and 40 percent of consumer goods available here are domestically-made products.


A lot of petty merchants at Dong Xuan Market are now working as the ‘general sales agents’ for foreign producers who distribute foreign goods to northern provinces and carry goods to the south, from which, goods are carried to every corner of every street and every family.


The same situation can also be seen in other big markets in Hanoi, including Hom, Thanh Cong and Nga Tu So Markets.


Not only traditional markets, even ancient streets in Hanoi have also become the ‘general sales agents’ for China-made goods. Hang Ngang and Hang Dao streets in Hanoi, for example, offer abundant made-in-China clothes, Hang Bo street specialises in providing Chinese garment materials, while Luong Van Can street sells China-made toys for children, and Cau Go sells China-made jewellery and souvenirs.


Even the Hanoi night market, which was established with the aim of promoting traditional Hanoi products, has also been primarily selling China-made products.


While Chinese products are flooding traditional markets thanks to their low prices and high profit for retailers, foreign brand names are dominating small convenience stores and markets in rural areas due to superior marketing.


In many rural areas, 5ml Clear shampoo bags priced at 500 dong have ‘defeated’ 200 ml shampoo bottles priced at 7,000 dong made by Saigon Cosmetics. Soft drinks, priced at 2,000 dong, carried by Coke Cola officers on three-wheeled vehicles have been reaching every street, and weeded out Tribeco products. Omo and Tide laundry detergent is dominating the shelves of groceries, and there is no more room for domestic brand names like Lix and Daso here.


The road less travelled...


“How can Vietnamese producers sell Vietnam-made products if even Vietnamese retailers only advertise foreign-made products?” questioned Loan from the Vietnam Retailers’ Association.


However, Loan understands that domestic producers have not paid attention to the development of distribution networks. That explains why Vietnam-made goods still cannot win positions in the home market, even though they have been trying to improve quality and their products are favoured in many export markets.


However, Vietnamese producers have finally realised the importance of retail shops and markets. Asia shoes, Vi Dan detergent, Vifon instant noodles, Duy Tan plastics and My Hao cosmetics have made investment in building distribution networks, trying to reach out to more remote provincial markets.


Many Vietnamese businesses have also been trying to ‘indulge’ retailers in order to become more competitive in the market. It is clear that if shop owners and retailers receive good discounts, they will automatically advertise Vietnam-made goods instead of foreign-made goods.


Competing at retail markets is really not an easy road, but is the road Vietnamese enterprises need to follow to flourish in the home market.

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