Vietnamese products in foreign chains face challenge

10:39 | 16/07/2019 Trade

(VEN) - The Ministry of Industry and Trade (MoIT) is pleased with the results of its efforts over the past three years to boost domestically made products in foreign distribution networks. 

vietnamese products in foreign chains face challenge
Vietnamese goods in a Singaporean supermarket

Le Viet Nga, Deputy Director of the MoIT’s Domestic Market Department, said that since 2017, the Central Group (Thailand) has exported an average US$46 million worth of Vietnamese goods annually through the Big C supermarket chain, and the export value keeps growing. Similarly, MM Mega Market has opened four farm produce purchase centers in Vietnam, which have purchased large volumes of dragon fruit and sweet potatoes for export to Thailand. Japan’s AEON supermarket chain also exports US$250 million worth of Vietnamese goods annually under a private brand developed by AEON, TOPVALU. AEON pledged to increase the export value of TOPVALU Vietnamese goods to US$500 million by 2020 and US$1 billion by 2025.

These results reflect the MoIT’s efforts to promote and diversify export channels. The project has also helped domestic businesses increase their presence in the global market.

However, according to experts, the direct export of Vietnamese goods via distribution networks remains limited in terms of both volume and value. High prices are said to be a major reason. A representative of AEON Vietnam said various kinds of Vietnamese goods have export potential but are not competitive in price. Mango is an example. Despite good quality, Vietnamese mangoes cannot compete in price with similar products from Pakistan, Thailand and the Philippines in the Japanese market.

Moreover, Vietnamese companies keep on manufacturing and selling what they have but do not study the demand of retailers and consumers. They remain unaware of the process and criteria for export to the distribution systems of foreign countries. They also lack necessary linkages to meet large orders.

Therefore, apart from state support, businesses need to take the initiative in improving their manufacturing capacity to meet the demand of distributors and consumers.

Le Viet Nga believes foreign distribution networks will help businesses access a potential market with four million Vietnamese people currently living and working abroad. Many overseas Vietnamese supermarkets are operating effectively and have developed their own brands. Domestic retailers can set up linkages with these retail channels to boost exports.

For example, Saigon Co.op has maintained linkages with the FairPrice retail chain of Singapore to sell Vietnamese goods in FairPrice supermarkets in Singapore. Saigon Co.op has also sent its clerks to training courses in Singapore to improve their skills.

Hai Linh