Seafood shifts focus back to the domestic market

“In the past, exports accounted for right at 95% of our business,” said Nguyen Thi Thu Sac, general director of Hai Nam Seafood, and “though we have shipped to more than 60 countries, orders have now weakened significantly.”

We, like all major companies operating in Vietnam in the seafood business, of necessity are refocusing our attention back at the domestic markets, as leverage in the event of a deterioration in overseas markets, said Sac.

Sac noted the business sentiment has totally changed over the last year. Until last year, we had been focusing only on exports, but with the formation of the ASEAN economic community our priorities have changed.

There are also a large number of free trade agreements in the offing said an executive of the Minh Phu Seafood Corporation, a leading seafood processor in Vietnam, that could signal potential troubled waters ahead for exports.

This has contributed to a heightened sense of uncertainty for many larger companies sparking a market strategy re-evaluation for a fall-back position should the bottom drop out of the export market. 

That’s why we’ve turned our attentions back to capturing a larger share of the domestic market, said the executive adding that his company is now targeting a 20% share of the domestic market over the next two years.

Minh Thu, deputy director of Saigon Co-op, said most smallholders in the Vietnam fisheries and aquaculture domestic industries are not well equipped at this time to cope with the superior foreign competition that is headed this way via the AEC.

She said, most of these smallholders don’t have sufficient funds to modernize and upgrade their facilities with state-of-the-art equipment and technologies needed to innovate and compete effectively.

The situation creates a perfect opportunity for the larger companies to cast their nets into the domestic market and catch market share, Thu underscored, adding that there a number of different marketing strategies these larger companies can apply to that end.

Most notably, the rising number of transnational chain supermarkets entering the domestic market create an attractive channel for these companies to utilize effectively to advertise their products and promote sales.

Data compiled by the Vietnam Association of Seafood Exporters and Producers (VASEP) shows wild fish exports for the first seven months of 2016 jumped 2.7% year-on-year to 1.776 million metric tons, comprised of 1.676 million metric tons of offshore fish and 100,000 metric tons of inland freshwater fish.

Aquatic farm production for the same seven-month period reached 1.97 million metric tons, an increase of 1.3%.

Combined, total aquatic sales for the seven months January-July tallied in at 3.741 million metric tons, registering total export and domestic revenue of US$3.65 billion, roughly equivalent to last year’s same period figures, according to VASEP.