Firms advised to focus on domestic market

Enterprises should not consider stimulation of domestic consumption a temporary measure at a time of export decline.

They should instead adopt a long-term strategy and implement it methodically so that the domestic market can provide firm support in the future, delegates said at a conference in HCM City yesterday, March 19.

Nguyen Loc An, an official of the Domestic Market Department under the Ministry of Industry and Trade, said with a population of 86 million, a majority of whom are young, retail consumption has grown at over 20 per cent in recent years, which shows that Viet Nam is a potential market not only for local enterprises but also for foreign companies.

But enterprises had not paid much attention to developing the domestic market until last year’s global economic and financial crisis, he said.

When they turned their attention to the domestic market, they were faced with many challenges because they were locked in tough competition with imported products in the local market.

To support enterprises in promoting sales in the domestic market, the Government has launched many trade promotions.

However, many delegates said that local firms should try to persuade people to buy their products based on quality and price instead of relying on their patriotism.

Local producers are advised to adopt measures to increase labour productivity, reduce production costs and increase product quality so that Vietnamese products can compete with imported ones.

To gain a strong foothold at home, firms need to research local demand and people’s consumption habits as well as their financial capacity before making suitable products, he added.

To effectively stimulate domestic consumption, manufacturers also have to improve their distribution network, especially in rural areas.

An called on enterprises to limit imports of products that local companies can produce, ensuring quality and stable supply.

He also asked the Government to map out a national strategy for developing the local market, including supporting enterprises in conducting research on local demand and making a master plan for a distribution network for the domestic market.

Vo Van Quyen, deputy head of the Ministry of Industry and Trade’s Domestic Market Department, said the Government should invest more in developing infrastructure in rural, remote areas as well as organise regular trade promotion programmes to boost sales in the local market.

In addition, the Government should strengthen inspection of trading activities and impose strict punishment on individuals and organisations that trade in fake and low quality goods to protect consumers’ interests and the rights of law-abiding enterprises, he said.

To boost consumption of local farm produce and handicraft products, relevant agencies, distributors and retailers should work with each other to implement price stabilisation programmes and set up information systems on supply and demand of these products both at home and abroad, said Nguyen Xuan Minh of the HCM City University of Foreign Trade.

Nguyen Ke Tuan of the National Economics University agreed with Minh, saying effective forecast of market demand will help avoid oversupply that can reduce prices and generate losses for producers.

In addition, the application of advance technologies in agricultural production is also needed to increase competitiveness of Vietnamese farm products, Tuan said.

VietNamNet/Viet Nam News

Tags: Vietnam domestic market, Vietnam markets