Supermarket attitude shift, now like selling domestic products

Unlike previous years, when supermarkets mostly sold foreign products, they now mostly sell Vietnamese goods. The proportion of Vietnam-made goods on the shelves has reached 70-95 percent.

At Co-op Mart, 95 percent of food products and 90 percent of non-food products displayed on the aisles are made in Vietnam, figures for the first seven months of 2010 reported by Co-op Mart to the HCM City Industry and Trade Department.

According to Bui Hanh Thu, Deputy Director of Saigon Co-op, foreign products dominated in the past, but domestic products have been gradually making strides.

“Vietnam made goods are now dominating some categories of products,” Thu stated. “For example, 95 percent of ready-made clothes for children, plus young and middle-aged people now at Saigon Co-op are domestically-made products. Meanwhile, previously, 40 percent of the products were imports.”

Big C has also reported clear changes in the structure of goods on display. One representative of the retailer observed that a lot of garment companies and workshops have returned to the domestic market.

According to Nguyen Xuan Hai, Director of Big C Vietnam, 95 percent of goods at the supermarket are Vietnamese products, while 40 percent of their total revenue comes from those recognized as “Vietnam’s high quality products.”

Vietnam-made goods have gradually “conquered” the home market, thanks to upgraded quality and design, as well as reasonable prices. Domestic products can meet diversified consumer tastes and many have replaced imports on supermarket shelves. Boxes of crackers from from Thailand and Malaysia have been replaced with those from Kinh Do, Hai Ha and Bibica brands.

According to retailers, cooperation between producers and distributors is the most important aspect in whether or not domestic products appeal to consumers.

Recently, Big C met with some 100 small and medium producers in Nghe An province, where it signed a contract committing to purchase 13 billion dong in products. Saigon Co-op has also invested 15 billion dong in cooperatives in Lam Dong province to help farmers grow safe vegetables to meet VietGap standards.

Many retailers, in fact, have stressed that producers should try to cement their position on the market with high quality and reasonable prices.

Hai noted that one of the biggest problems is bad logistics. The transport system forces frozen food prices higher. Meanwhile, many producers are small scale, so they cannot offer the best prices. They also criticize producer tardiness in design change and product diversification, which foreign producers do every day.

Domestic producers respond that supermarkets make it difficult to introduce their products to them. A food company director complained that his company meets all requirements set by one supermarket, but cannot gain space at the store since “the display area has run out.” – Tuoi tre

Tags: Vietnam retail market