Truc Viet Company in Ho Chi Minh City has exported bamboo and rattan products for more than 10 years but it is now facing a tough time with orders falling by as much as 70%.
Deputy Director Nguyen Doan Thuy said many foreign customers were also becoming more picky about prices and quality.
Vietnam has forecast that export growth this year will slow to 13%, after growing by 29.5 percent to US$62.9 billion in 2008, because of the economic downturn in important markets in the US, Europe and Japan.
As exports slowed, Truc Viet Company decided to return to the domestic market in an attempt to offset the decline in export orders, Thuy said. She admitted her company had not paid enough attention to the local market but it was now trying to win every single customer by boosting marketing, increasing quality and lowering prices.
“Although we haven’t received any big contracts yet, orders (from local buyers) increase every day,” she said.
The domestic market helped the company continue production and retain more than 50 workers, Thuy said, adding that all staff were recently rewarded with a 15% pay rise.
Chu Thanh Khoi, director of HCMC-based Tan Binh Foodstuff Export Joint Stock Company, said his company was in the process of launching new canned food products for the local market, instead of focusing on export markets only.
Khoi said the company also helped process about 4 tons of seafood products for local partners every day. Doing contract work was less profitable than exporting but right now it was allowing the company to keep more than 70% of its workforce occupied, he said.
He said his company was making the most of all business relationships to find new orders, especially from supermarket chains in big cities.
Meanwhile, Huynh Thi Thanh Giang from An Giang Fisheries Import and Export Joint-Stock Company said her company was targeting the low price segment and scouting new markets such as Central Highlands provinces.
Many other companies in the food and fast moving consumer goods industries also said they planned to tap markets in rural regions, where their products can sell more easily through traditional retail channels like markets and grocery stores.
Truong Lan Anh, CEO of Thuan Phat Foods Company, said expanding to new markets in rural regions in the past month had boosted the company’s sales.
The domestic market accounted for 70% of the sales and the company would try to develop this market, she said.
A handicraft company in HCMC suggested local businesses turn to industry associations so that they and their peers could share orders among themselves. The company said it had received several orders through other companies by that way.
With the world’s 13th-biggest population, Vietnam has a large domestic market with increasing purchasing power. The retail market last year generated total revenues of $58 billion.
The government has asked local businesses to give priority to the domestic market to counter the effects caused by falling export orders this year. (Tuoi Tre)
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