Chinese fakes hurting domestic products in Vietnamese market

Clothing dyed with carcinogens. Chemical-laden fruit. Toothpaste tainted with an ingredient used in anti-freeze. Tires missing a key safety component.

Many Vietnamese shoppers are worried about the safety of Chinese goods, and are trying to avoid products from their northern neighbor at all costs. The trouble is, that may not be possible.

In addition to Chinese products slapped with counterfeit German, French and Italian labels, copycats of many Vietnamese gadgets smuggled into Vietnam from China are believed to be flooding both modern stores and traditional markets nationwide.

Vietnamese silk brand Khaisilk is under criminal probe for selling Chinese products under its name.

Up to 70% of fruit and vegetables sold in some traditional markets in Saigon come from China, but many of them bear Vietnamese labels, according to surveys conducted by local media.

"Public doubt of food safety is always cast over Chinese products," the World Bank said in a report on food safety in Vietnam published this year. "However, this is not well backed by the available data and test information.”

The bank explained that supplies from China are not officially recorded, so tracing vegetables when samples are found to contain hazardous substances is almost impossible.

Given the situation, shoppers often have no choice but to listen to friends and family or use their own instincts and experiences in the hope of avoiding dangerous counterfeits.

“Local consumers have grown increasingly wary of Chinese food, fruit, vegetables and garments," Nguyen Thu Huyen, a housewife in Hanoi, said. "We tell each other how to distinguish between Chinese and Vietnamese goods.” 

“Chinese fruit has been boycotted,” she said while scanning a wide selection of oranges in the fresh produce aisle of a modern supermarket in Hanoi.

Echoing Huyen, Nguyen Vu Le, a 30-year-old resident in Hanoi, said: “Vietnamese products, especially houseware, food and clothing, are now the number one choice for many consumers. They are of good quality and reasonably priced.”

But an ongoing criminal probe into local silk firm Khaisilk begs otherwise. The renowned high-end Vietnamese brand with a history of over 30 years has admitted to placing "Made in Vietnam" tags with its logo on Chinese silk scarves. 

To make matters worse, the scandal only broke when a business in Hanoi took to Facebook to complain about products it had bought from the brand saying they were actually made in China.

Most garments with “Made-in Vietnam” labels available in the country are actually fake products smuggled from China, local media quoted Vu Duc Giang, chairman of the Vietnam Garment and Apparel Association,  as saying.

Local consumers are telling each other how to distinguish between Chinese and Vietnamese goods

Le Hong Son, a member of National Steering Committee 389, the government's anti-smuggling body, said: “Smugglers often bring their goods in from China, slap a ‘Made in Vietnam’ label on them and then sell the contraband to unsuspecting customers.”

“Counterfeit products range from sweets and cosmetics to lightbulbs and clothes,” he added.

The stigma attached to Chinese products has prompted many businesses to simply replace the tags with a more reputable country of origin.  

Authorities in Vietnam uncovered nearly 90,000 cases of smuggling in the first half of this year, but were only able to take 1,200 of those cases to court, according to the committee.

Vu Vinh Phu, chairman of the Hanoi Supermarket Association, said that widespread copycats in the domestic market has caused consumers to lose confidence in locally-made products.

Agreeing with Phu, Vu Kim Hanh, head of the Center of Business Studies and Assistance, said many handicraft villages and businesses are facing bankruptcy due to the infiltration of Chinese duplicates.

Local businesses have also complained that fake products are costing them hundreds of thousands of dollars each year in lost revenue.

Experts said fake products are able to enter the country due to poor cooperation between border guards. More border controls are needed, but that poses a challenge because the border with China is long.

Authorities need to stop fake goods from entering the country at the border, as it costs more to track them down in local markets, they said.

While waiting for state agencies to get a grip of the situation, some companies have found ways of protecting themselves. 

Nguyen Hong Nhung, the owner of a garment company in Hanoi, said the only real way to fight back against the duplicates is to keep improving her products. The life cycle of many fashion products is short, with new designs on the market within months, she said.

“You innovate faster than the counterfeiters," Nhung said. "You shouldn’t hesitate to throw money at your designers. That’s how you play the game.”