To survive difficulties, businesses march towards farer markets

The current big difficulties have forced enterprises to restructure their business plan to survive. Diversifying products, making low-cost products and reaching out to farer markets are parts of the restructuring.

What to make and where to sell products are the questions which have caused headaches to enterprises now, when the year-end production season is coming. Since the purchasing power remains weak, it is not easy to boost sales at this moment.

However, the ways out can be found in all cases by wise businesses. It is clear that wooden furniture products have been selling very slowly due to the frozen real estate market. However, the HCM City-based D’Furni Company’s sales in the first eight months of the year still increased by 30 percent over the same period of the last year.

Vu Tien Thap, Managing Director of D’Funi, which specializes in distributing furniture, said that his company still could obtain high growth rate because it has been diversifying products, adjusting the product structure and making changes with the distribution network.

Especially, Thap said that in previous years, the company’s sales increased steadily thanks to the high sales in HCM City. However, as the demand in the city’s market has decreased as people tighten their belts. The company has been trying to sell products in neighboring markets, especially in the Central Highlands.

D’Funi said that it is preparing for the Tet sale season and puts high hopes on the Central Highlands market. Why the Central Highlands market? It is because the managers of the company have learnt that the income of local residents from coffee, pepper and rubber has been growing well.

“I can say for sure that our products will be selling very well on the Central Highlands,” Thap said. “Once local farmers get big money from harvesting their crops, they will spend money on motorbikes and home appliances first, and then on wooden furniture. Therefore, we are trying to arrange capital to store products to sell in the market on the Tet sale season.”

Nguyen Thi Hong Huong, General Director of Vinatex Mart chain, a big textile and garment production distributor, said that the chain got the growth rate of 16 percent so far this year, much lower than the 30 percent of the same periods of the last year. However, Huong has noted that while the demand decreased in loyal markets, the purchasing power has increased in other markets.

The Mekong Delta market for example, has seen the sales increasing by 35 percent. Therefore, Huong said, Vinatex is considering making further investment to develop the market. She believes that if making reasonable investments, the revenue from garment and textile product sales would be triple the current level of 1 trillion dong by the end of the year.

Thoi bao Kinh te Saigon has also quoted other businessmen as saying that they would reach out to rural markets instead of gathering strength on the familiar markets. In order to succeed in rural markets, it is necessary to make products at high quality and with reasonable prices. Meanwhile, some companies, which are facing big difficulties due to the narrowed export markets, are planning to join forces with others to develop the domestic market in the upcoming Tet sale season.

Making low-cost products proves to be the strategy applied by many enterprises for now. However, Huong from Vinatex believes that consumers not only consider the sale prices when shopping, but they also pay attention to the quality and designs. Therefore, Vinatex is considering opening more fashion centers and inviting luxurious brands to sell their products on Vinatex’s shelves.

She went on to say that the distribution chain plans to launch three new Vinatex brands, targeting the niche markets for children, women and men.

Source: TBKTSG

Tags: Vietnam companies, Vietnam enterprises