Vietnamese Businesses Navigate Challenges to Secure Domestic Market Share
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- Published: Sunday, 21 January 2024 01:01
After achieving significant success in international markets, numerous Vietnamese businesses are redirecting their focus towards the domestic market to cater to the increasing number of customers opting for homegrown products. While the textile and garment industry, accounting for over $44 billion in export turnover in 2022, has been instrumental in showcasing Vietnam's manufacturing prowess globally, experts emphasize the need to strike a balance between international and domestic market priorities.
Trương Văn Cẩm, Vice President of the Việt Nam Textile and Apparel Association (Vitas), highlighted the dual approach of the textile and garment industry, stating that approximately 85-87% of the $50 billion production capacity serves export demands, with the remainder addressing the domestic market. Despite the industry's strong international focus, Cẩm emphasized the strategic importance of the domestic market, which is expected to witness a considerable boost with an estimated average per capita income of $4,700 in 2024.
Nguyễn Thị Thu Thủy, Permanent Vice President of the Việt Nam Consumer Goods Development Association, acknowledged the significance of the domestic consumer market as a driving force for Vietnam's economy. She emphasized the dynamic nature of consumer trends, reflecting changes in preferences, habits, and values. Thủy stressed that understanding and responding to these trends are crucial for businesses to stay competitive.
However, the surge in e-commerce, propelled by globalization, has intensified competition, and consumers can easily access international goods online. For the textile and garment industry, challenges include competition with counterfeit and smuggled goods, as well as deceptive labeling practices when these goods enter Vietnam.
Lê Việt Nga, Deputy Director of the Domestic Market Department at the Ministry of Industry and Trade, acknowledged the impact of new-generation free trade agreements and the active expansion of foreign retail chains in Vietnam. The influx of imported goods poses a challenge for domestically produced items. With the retail market in Vietnam surpassing $180 billion in 2023, there is both a vast market potential and increased competition.
Nga sees this scenario as an opportunity for Vietnamese businesses to strengthen their brands, expand distribution channels, and establish a more robust presence in the domestic market. Building trust in quality and promoting national brands are seen as crucial steps for Vietnamese enterprises to thrive amid evolving consumer preferences and the changing retail landscape.
As Vietnam stands at the crossroads of economic growth, the ability of businesses to navigate these challenges and solidify their position in the domestic market will play a pivotal role in shaping the country's economic landscape in the years to come.