When biggest wholesale market in Hanoi mainly distributes Chinese goods

For the last many years, Vietnamese goods have been absent from traditional markets. Even Dong Xuan Market, well known as the oldest and biggest wholesale market in Hanoi, has also been mostly distributing Chinese goods since 1986.

Chinese goods flooding traditional markets

According to Do Xuan Thuy, General Director of the Dong Xuan Joint Stock Company, which runs Dong Xuan Market, since its establishment in 1889, the market has always been a big wholesale center in the country. It is estimated that 15-20 tons of goods goes from the market to different provinces and cities throughout the country. The annual turnover of the market is over four trillion dong.

However, Thuy admitted that since 1986, the goods available at Dong Xuan Market have mostly been sourced from China. As for souvenirs, toys, phones, briefcases or school bags, Chinese goods account for up to 90 percent. Meanwhile, the figure would be 70 percent for fabric, ready made clothes. The merchants at Dong Xuan Market still prefer trading Chinese goods, even though they well know that Chinese products do not have high quality.

Thuy stressed that the situation not only can be seen at Dong Xuan Market, but at many other traditional markets. It is because of the low competitiveness of Vietnamese goods.

The biggest advantage of Chinese goods is that they are very cheap, while Vietnamese consumers, with limited income, always prioritize to purchase the products with low prices. Vietnamese consumers would shift to use the products of other brands even if the other products are just 500-1000 dong cheaper than the familiar products.

Meanwhile, Vietnamese manufacturers have been criticized for not paying appropriate attention to develop distribution networks and boost sales at traditional markets, while they have only been focusing on boosting exports.

“A paradox has existed that at Dong Xuan market, merchants spontaneously put Chinese goods at the advantageous most eye-catching positions, without demanding any fee from suppliers,” Thuy said.

“If we can establish a close relation between enterprises and merchants, and apply reasonable preferential policies, Vietnamese goods would hit the most advantageous positions on the shelves,” he added.

Vietnamese manufacturers have been told that they do not have the opportunities to bring goods to domestic consumers because they cannot establish reasonable distribution network.

Chinese goods have been reaching to the Dong Xuan Market through the cross-border trade, and they do not have to bear import tax, which explains why they are always cheap. Vietnamese merchants at the market just stay at the market and order suppliers to bring goods to them, while they do not have to look for supply sources.

What do merchants want?

In fact, merchants at the Dong Xuan Market say they really want to trade Vietnamese goods, but they cannot. They do not want to sell Chinese goods, because the goods do not have clear origin and labels, which means that they would have the goods seized by the market control taskforce at any times.

It is really difficult for the merchants to sign contracts with Vietnamese producers which are the owners of well known brands.

“We are business households, and we do not have legal status to sign contracts with enterprises,” Nguyen Khac Dung, a merchant said

Merchants at traditional markets have urged Vietnamese producers to take actions to regain the home market, saying that it is now the right time to do that.

Ladoda, a medium and high class leather producer, has revealed the plan to set up a showroom to introduce its products at the Dong Xuan Market. This is also the thig HomeCook, a producer of home appliances, is planning.

Source: TBKTVN

Tags: Chinese goods