Future bright for cheap product brands

Experts forecast that in the next three years, one of every four products in a given supermarket would be a business’s own brand product.

The prediction was made at a seminar entitled “The Movement of the Retail Market and Opportunities for Vietnamese Businesses” held in Ha Noi on Tuesday.

Businesses’ own brand products are those ordered by distributors to provide a huge quantity for specific consumers. Their prices were usually lower than competitors by 10 to 50 per cent because of the amount distributors save from slashing marketing spending, the seminar was told.

Experts said that due to the recession and inflation, businesses’ own brands would develop, expand and attract consumers with lower prices.

A new survey conducted by AC Nielsen shows that over 61 per cent of consumers worldwide have chosen businesses’ own brands during the recession and 91 per cent will continue purchasing those products even when the economy recovers.

Participants in the seminar also analysed the future of the domestic retail market.

Le Linh, PepsiCo’s director in the northern provinces, said that in order to serve customers better, retail businesses should build their own efficient supply chains and distribution networks.

But he added that PepsiCo had incorporated a direct model into its mostly indirect distribution system, saying that companies must tailor their models to their strategic development plans and specific characteristics, as there is no perfect model for all businesses at all times.

Mai Khue Anh, chief executive officer of Hapro Food, said her company decided to develop a supply chain of clean vegetable and foods by setting up many supermarkets in Ha Noi.

At the beginning, Hapro Food performed poorly due to the well-established habits of consumers, who were used to buying vegetables and other foods very early or late in the day from street vendors or traditional markets, Anh said.

By establishing its own growing company in Dong Anh District, Hapro Food has been able to provide clean vegetables for the market and sign long-term contracts with major suppliers, currently operating 30 retail shops in Ha Noi.

The seminar also discussed the retail market, which has proven to be the most lucrative sector in Viet Nam.

Though the nation’s retail sector ranked 14 out of 30 on the list of the most attractive emerging retail markets in the world, the market still had the capacity to develop well, experts said.

Viet Nam owns the fastest-moving consumer goods market in Asia, as shown by the emergence of modern retail channels and the opening of new outlets and convenient retail shops nationwide.

In the past few years, the Government has supported Vietnamese products with the “Vietnamese use products made in Vietnam” campaign, which has sponsored a number of events and trade fairs and helped persuade consumers to buy domestic products.

At the seminar, Vu Kim Hanh, chairwoman of the High Quality Viet Nam Goods Association, predicted that the domestic retail market would benefit from urbanisation and mass media services, helping retailers promote themselves and gain easy access to consumers.

She also said that Viet Nam’s economy had shown signs of recovery, and credited the promotional campaigns of large retailers with the improvement.

Despite the domination of traditional markets, domestic consumers have become familiar with supermarkets, wholesale and retail shops that offer better quality products for the same prices. — VNS