Speaking at a recent seminar in Hanoi, Deputy Minister of Industry and Trade, Nguyen Cam Tu, affirmed that Vietnamese businesses still have their own advantages. Firstly, they have a proper understanding of consumer trends in the domestic market. Secondly, about 85 percent of the Vietnamese population still prefer traditional distribution channels, while foreign businesses in Vietnam often develop a modern distribution network. Thirdly, Vietnamese businesses operating in the domestic market have lower transportation and marketing costs than foreign businesses.

According to the former Minister of Trade, Truong Dinh Tuyen, Vietnam has a population of more than 85 million, most of whom are young. Its consumption power growing at a rate of more than 20 percent annually points to a big demand on the domestic market. So it is very important for Vietnamese businesses to dominate the domestic market and consider it as their power base while seeking to maintain and expand their foreign markets in the long run, he added.

In his message at the beginning of 2009, Prime Minister Nguyen Tan Dung emphasised the need to expand the domestic consumer market. The government has recently approved a stimulus package to help local businesses maintain their production, he said.

Reaching a tripartite consensus

According to Vo Van Quyen, deputy head of the Domestic Marketing Department under the Ministry of Industry and Trade, to penetrate the domestic market successfully needs a consensus between the State management agencies, businesses and consumers. Previously, the ministry planned to promote exports, but now it is focused on developing the domestic consumer market, especially in rural areas - home to more than 70 percent of the country’s total population. The rural market used to be flooded with low-quality and fake goods or illegally-imported products.

“We are now striving to make the business community better aware of the need to promote the distribution of goods in rural areas,” Mr Quyen said.

Understanding market demand

Cao Si Kiem, Chairman of the Small-and-Medium-Sized Enterprises’ Association, said that many Vietnamese businesses have to reduce the scale of operation and lay off workers due to high production costs and low competitiveness. Other businesses are focused on improving the quality of their products to meet market demand.

As he put it, a business executive board should get to grips with the problems and draw on others' experience in identifying the pros and cons. More importantly, they should understand market demand and make the best of support from the government, the community and craft associations to rise to the occasion

Publicising quality and price of products

Ho Tat Thang, deputy head of the Vietnam Standards and Consumers Protection Association, said that it is not an easy task to stimulate production when the domestic consumer market is witnessing a decdrline in the purchasing power and fierce competition from imported products. At present, consumers have plenty of choice and are becoming more and more demanding. Hence, local businesses need to improve their design and quality of products, reduce production and transportation costs, and advertise their products to a broader section of the population.

The Vietnam Standards and Consumers Protection Association is willing to provide local businesses with information on consumer taste and demand, Mr Thang said, adding that the association is encouraging domestic consumers to spend more than save.

Winning consumer trust

According to Nguyen Thai Dung, deputy general director of the BigC Supermarket, Vietnamese products are becoming more and more attractive than before. Many consumers would choose locally-made products rather than imported products bearing famous brand names.

The BigC Supermarket has seen a rise in orders for locally-made confectionaries and beverages, such as Kinh Do, Bibica, Huu Nghi and Hai Ha Kotobuki. In particular, green tea products from the Tan Hiep Phat group and other items of Vietnamese farm products are now much sought after by customers.