10:12 | 31/10/2016 Trade
(VEN) - Rather than sitting passively, waiting for importers to come, a number of Vietnamese ceramic businesses have actively invested in designing, renewing their production line and joining trade fairs and exhibitions to seek partners.
The Chu Dau Ceramic Joint Stock Company, one among major Vietnamese producers, has carved a niche on the domestic market and has exported their products to several countries in the European Union and the Republic of Korea. However, the company’s exports have remained low so far this year.
Company Deputy Director Nguyen Huu Hiep attributed the downturn to political changes in the EU, which have caused decreased demand. Like many other Vietnamese ceramic enterprises, Chu Dau has mostly produced a modest number of ceramic ware, following the contracts with foreign importers.
To improve the situation, the company has changed the way they conduct business. Rather than waiting for importers to order production, Chu Dau has actively learned about market demand. Via the Hanoi Trading Corporation’s distribution network, Chu Dau’s products have been presented in Russia and the company has received production orders from this market.
Nguyen Huu Hiep said that Russian users like poorly-decorated ceramic ware and that their flower pots are currently the best-sellers.
The Quang Vinh Ceramic Company has actively joined major fairs abroad including the Hanoi Goods Week held in early September 2016 in Moscow and a year ago when it and several other Vietnamese companies signed contracts to export the first containers of ceramic ware to Russia.
According to Ha Thi Vinh, Director of the Quang Vinh Ceramic Company, although they took only asmall number of ceramic ware to the Hanoi Goods Week in Moscow in 2015, their exhibits were welcomed and the company gained contracts during the fair.
Ha Thi Vinh also said that the Russian market offers both opportunities and challenges. In terms of challenges, the devaluation of the Russian ruble has led to low profitability. Russian partners have chosen the deferred payment option, causing difficulties for Vietnamese businesses, particularly small-sized businesses due to their limited financial capital and loan access. The geographical distance and high transport costs are also major barriers for Vietnamese ceramic exporters.
“However, the situation is better for the case of the Quang Vinh Ceramic Company, which has benefitted from lower transport and selling costs thanks to its direct exports to this market,” said Ha Thi Vinh.
Chu Dau and Quang Vinh are among few enterprises, which have intensively invested in designs and market research in order to reach new markets. Meanwhile, most businesses of this kind have not paid attention to designs and trends or have not been financially able to hire professional designers.
With that in mind, economist Vu Huy Thieu recommended that businesses be better aware of the need to create good designs, invest sufficiently and finding new markets via professional fairs abroad. In addition, launching trade promotion programs with a focus on design and foreign markets is also necessary for businesses to orient their production and reduce operational costs.