Domestic market promotion - important growth driver in 2024
VOV.VN -With a population of more than 100 million people, of which the middle class is considered to stand at a high level of 20%, Vietnam truly boasts potential and strengths for goods consumption and service development.
Looking back at the results of 2023, vibrant commercial and consumer service activities duly contributed to fulfilling the whole year's production and business plan, with total retail sales of goods and consumer service revenue soaring by 9.6% compared to the previous year.
Data compiled by the World Bank indicates that Vietnamese per capita income growth during the 2017 to 2022 period hit 8.5%, marking the highest in Southeast Asia and nearly double the global average growth rate.
The number of middle-class people and the proportion of urban residents has also increased rapidly in recent years, with rapid income growth causing the value of Vietnamese people's consumer goods basket to go up swiftly.
In 2023, the scale of the nation’s retail market exceeded US$180 billion and is expected to continue to grow over the following years. At the same time, the nine-month 2023 report of the market research organization Euromonitor showed that brand and product quality remain one of the key factors in the purchasing decisions made by Vietnamese people. Indeed, more than 26% of Vietnamese consumers regularly buy products from famous brands, whilst over 35% are willing to purchase less but will choose higher-quality products.
These factors have made the country a "potential" land for retailers, whilst also being an opportunity for businesses to build brands and expand domestic distribution channels for global quality Vietnamese goods, local goods with national quality and national brands, and key products of localities.
However, as a means of mastering their own playground, thereby promoting sustainable production and consumption of Vietnamese goods, local businesses need to constantly strive to innovate, explore, and promptly grasp new consumer trends of Vietnamese people, from which effective plans and strategies can therefore be devised.
Mai Thi Thuy, chairwoman of the Women's Association of Small and Medium Enterprises in Hanoi, said, "Enterprises themselves must innovate, they cannot follow the traditional, old ways of the past. In addition, the latest knowledge must be brought into business management, while simultaneously, local businesses need to improve knowledge, invest, and quickly access technology. They also need to quickly grasp commodity market information and the State’s business support policies. That's the way to survive and thrive.”
According to statistics, domestic consumption spending accounts for about 60% to 65% of GDP, of which household spending is roughly 50% to 55% of GDP. With a population of 100 million people, including 20 million middle-class people, it will create huge demand and it is forecast that by 2026, about four million more people will join the middle class.
Today's new consumer trends therefore require businesses to produce according to market needs, not just products which hold advantages.
Although Vietnamese goods’ position has been increasingly secured over recent times, they still face plenty of difficulties and challenges ahead. Many imported products tend to shift strongly to consumption in the domestic market following the enforcement of new generation free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA).
According to Nguyen Anh Duc, chairman of the Vietnam Retailers Association, support policies for businesses need to be more fundamental in order to create a stable and long-term stimulus effect, in which emphasis should be placed on promoting direct support policies for local firms.
He also emphasized ensuring the effective operation of cashless payments whilst developing logistics services and the computing industry in order to help consumers shop conveniently.
Furthermore, according to experts, it remains necessary to improve the effectiveness of consumption stimulation policies and diversify sales channels by paying greater attention to online shopping channels.
This trend will help enterprises to save business costs, secure market shares, and gradually increase revenue, they added.
