Farmers, retailers join hands to compete with foreign goods

Under the cooperation agreement signed by the enterprises on June 1, Vingroup, the retailer, would be responsible for distributing products made by Vietnamese enterprises in seven fields, including food, cosmetics, toys, stationary, household-use goods, fresh food and fashion to consumers in 18 provinces and cities throughout the country. 

Within one year, manufacturers can bring their products to Vinmart and Vinmart+ retail outlets under preferential conditions. The suppliers of fresh food, including meat, fish, poultry, vegetables and fruits, will enjoy the discount rate of 0%.

Vingroup will help manufacturers sell products and get no profit, while manufacturers can retain the discounts to make re-investment and upgrade their products’ quality so as to satisfy the strict requirements on food hygiene.

This will benefit both manufacturers and consumers in the long term, because manufacturers will sell their products better, while consumers can restore their confidence on Vietnamese goods.

Pham Chi Lan, a renowned economist, commented that the cooperation of 250 businesses will be the solution to the existing problems Vietnamese goods are encountering in the home market.

Lan said she was once asked what she felt most worried about Vietnamese businesses. Her answer was the lack of Vietnamese businesses’ cooperation to create competitiveness.

“The cooperation of Vietnamese businesses has been my biggest desire in the last 50 years,” Lan said.

The alliance of retailer and manufacturers has been established in the context of the stiff competition between Vietnamese goods and foreign products in the domestic market. 

Some analysts are pessimistic about the prospects of Vietnamese goods, saying that foreign products, empowered by foreign-invested retail networks, will dislodge Vietnamese goods from their home market.

Vu Kim Hanh, chair of the ‘Vietnamese high-quality Products’ Club, while warning that the products from ASEAN countries have been flooding the supermarkets in Vietnam, said that Vietnamese businesses need to join hands to heighten the positions of Vietnamese goods and build up national brands. 

Since Vietnamese have limited financial capability and weak brands, the best way for them is to unite for development.

Le Ha Chi, managing director of the Nha Be Garment Company, one of the 250 enterprises, shows her optimism about the cooperation.

Nha Be, like many other garment companies, though being a big exporter, is meeting big difficulties in the domestic market.

“The cooperation is hoped to help us approach Vietnamese consumers,” she said.

With Vingroup having joining hands with 250 manufacturers, analysts commented that the great war between Vingroup, a Vietnamese retail chain, and foreign-owned ones, has begun.