Sale prices, the games of capitalists
Before Viet Nam joined the ‘global playing field’ with WTO membership, the country experienced challenges with AFTA commitments, which include tax reductions similar or stricter than the country’s WTO commitments.
However, consumers now have every reason to expect further price decreases of electronics products.
Under the Vietnam-Japan Economic Partnership Agreement (VJEPA), which went into effect at the beginning of 2009, the import tax rates of electronics from Japan like TV sets, laptops and cameras have seen the decreases of 2.5-4.5%. Moreover, the opening of the retail market will attract distributors from the country.
However, analysts still think that electronics prices in 2009 may still follow the path they went in 2008.
The problem lies in the fact that the market always needs time to show the effects of economic policies. Therefore, though taxes decrease, and policies offer more preferences, consumers have to wait for months or years to be able to purchase products at low prices.
Some big distributors say that prices have dropped to the bottom line or to cost prices. And maybe this is true: Sources say that production stagnation has been occurring and may continue in 2009.
History shows that capitalists throw products away, but do not slash sale prices or give products to someone.
What will the distribution market be like?
Though global and Vietnam’s economies are expected to see continued difficulties in 2009, Vietnam, as one of the most attractive retail markets in the world, will still witness the establishment of new distributors in 2009.
Though the door to the electronics market will not be totally opened until January 1, 2010, the ‘games’ may begin sooner, right in 2009. Direct investment, joint ventures, cooperation and buy back, will all blossom.
Big and well-known home appliance and electronics supermarts prove to be popular targets for foreign investors. Meanwhile, direct investment will still be a good choice. Metro Cash & Carry, for example, has been a very successful retailer in Viet Nam.
Technology: two scenarios
R&D, production and distribution prove to be a closed cycle. However, currently, two of the three chains have problems due to unfavourable economic conditions. How will technology research be like in 2009?
There are two scenarios: Either enterprises will have to stop R&D activities due to limited budgets, or they will consider developing products which have good facilities and low costs. The second proves to be the choice of many enterprises.
Profit: smaller pieces of the pie
Four parties are directly involved in the process of distribution and sale: producers, authorities, distributors and consumers.
Who will see the lowest benefit level in 2009? The three first parties will have to sit together to discuss suitable measures to persuade consumers, who are getting poorer due to economic recession, to make purchases. (Doanh Nhan)
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