Hanoi stimulates domestic consumption to boost Covid slump recovery

Platform for Vietnamese goods

According to a report by the Hanoi People’s Committee, the city’s gross regional domestic product (GRDP) growth expanded by 5.17 percent year-on-year in the first quarter, 1.25-fold increase against the 4.13 percent recorded in the same period of last year. Total budget revenue in the first quarter was VND72.4 trillion, reaching 30.8 percent of the estimate assigned by the government, while local budget expenditure was VND12.56 trillion, reaching 11.6 percent of the estimate, equivalent to 91.9 percent of expenditure in the same period of 2020.

Due to domestic consumption stimulus activities, the total retail sales of consumer goods and services in March reached VND46 trillion, up 1.9 percent compared to February and up 1.6 percent compared to March 2020, raising the figure in the first quarter of 2021 to VND145.9 trillion, three times higher than the same period last year. The supply of goods is plentiful and diversified, at relatively stable prices and there was no shortage of goods during Tet. The city has connected smoothly the consumption of agricultural and aquatic products among provinces, cities, and districts which suffered from the Covid-19 epidemic.

Domestic goods conquer market

According to the Domestic Markets Department under the Ministry of Industry and Trade (MoIT), Vietnamese products currently account for a relatively high proportion, from 90 to 95 percent, in modern distribution channels such as Co.opmart, Vissan, Vinmart, BRG Retail, and from 60-96 percent in the supermarket system of foreign businesses operating in Vietnam. As for markets and convenience stores channels, the proportion of Vietnamese products also tops 60 percent.

The Head of Communications at Central Retail Vietnam Nguyen Thi Bich Van said that Big C has about 45,000 commodity codes, of which Vietnamese-made goods account for over 90 percent.

Given the negative impacts of the Covid-19 epidemic on supply chains and trade flows, the domestic market provided a safety net for domestic businesses. In particular, large retailers increased inventories according to forecasts of the pandemic’s development, resulting in smooth goods circulation, with no shortage of goods or price hikes of essential items.

The head of the “Buy Vietnamese Goods” campaign, chair of the Vietnam Fatherland Front Committee of Hanoi, Nguyen Lan Huong, said Hanoi is determined to promote the consumption of goods in the domestic market to help the economy recover and grow. To that end, the capital has implemented cooperation programs with other provinces and cities across the country; organized trade promotion programs, and created a sustainable two-way supply and consumption channel between the city and its other regions, contributing to economic recovery not only for Hanoi but the whole nation.

Program limitations

Despite its positive results, the “Buy Vietnamese goods” campaign still has limitations, for example the awareness of protecting trademarks and labels of products and goods, as well as counterfeit, smuggled and poor quality goods, or food hygiene and safety flaws.

For the program to be effectively implemented, Huong said, Hanoi will promote high-quality Vietnamese goods to consumers, urge businesses to deploy mobile sales and bring goods to remote areas, industrial parks and export processing zones. It will also organize trade fairs, trade promotions, discount programs, domestic stimulus programs, and develop distribution channels for Vietnamese goods abroad.

In addition, it will coordinate with relevant departments and agencies to ease difficulties in tax payments and loans for businesses to help them recover, promote production and business activities; strengthen inspections to detect counterfeit and poor quality goods, contributing to curbing inflation, stabilizing prices of essential goods, ensuring social security and sustainable growth.