Intermediary costs are among reasons prices of many Vietnamese products have remained high, affecting their competitiveness, said Vu Thi Hau, Deputy Director of Fivimart supermarket chain.
Intermediary costs are among reasons prices of many Vietnamese products have remained high
“Big local producers often select first and second-tier distributors to get their products to market instead of distributing themselves. This increases the cost of the products and forces us to sell at higher prices,” she explained.
She added that advertising costs are also driving up prices, noting that it costs around VND70 million (USD3,333) for a 30-second television advertisement. She said that in some cases enormous advertising budgets have inflated the price of products to three times what they otherwise would be.
Due to these higher prices many Vietnamese producers are finding it difficult to compete with their Chinese counterparts.
Hau suggested that the Ministry of Industry and Trade prioritise advertisements for Vietnamese products by applying lower fees for Vietnamese companies while raising those for importers.
Large trade centres short on Vietnamese goods
According to Vice Chairwoman and General Secretary of the Vietnam Retailers’ Association Dinh Thi My Loan, in reality the amount of Vietnamese products at supermarkets has increased, but at the big, more modern trade centres such as Vincom, Diamond Plaza or Parkson there are still very few domestically made goods.
Big supermarkets and trade centres often require stricter standards for products, particularly for food. Many Vietnamese producers find it difficult to meet these standards, she said.
“If Vietnamese producers are not able to make better designed products for lower prices, they just won't be able to compete, no matter what type of promotions or discounts they offer," she added.
She pointed out that Vietnam population of roughly 90 million, 70 million of whom could be considered consumers. If 20% of the consumers spent VND100 thousand (USD4.76) each on Vietnamese products every month, Vietnamese companies earn VND1.4 trillion (USD66.6 million).
Le Viet Nga, Deputy Head of the Ministry of Industry and Trade's Domestic Market Department, said up to 80% of Vietnamese products have improved their designs, but not enough to keep up with imports. Also, the quality of fruit and other food found in supermarkets leaves room for improvement, Nga added.
