Thai companies have put in place major initiatives for growth in the economy, taking advantage of the nation’s significantly lower wages, phase in of AEC lower tariffs and by executing more innovative and clever marketing campaigns.
For instance, in mid-2014 Thai billionaire Charoen Sirivadhanabhakdi through his company Berli Jucker acquired the retail chain Family Mart (renamed B’s Mart) and unveiled plans to open 205 convenience stores stocked to the brim with Thai goods over the next four years.
Berli Jucker subsequently sent shockwaves through the market when later in 2014 it acquired 19 Metro Cash & Carry Vietnam stores at a cost of US$869 million along with an announcement of plans to extensively enlarge the presence of Thai products on the store shelves.
Earlier this year, Central Group owned by Thai billionaire Chirathivat bought a 49% interest in NKT Company, which owns Nguyen Kim Company as part of an expansion into the electronic retail market.
Thai retailers in general have better thought out marketing strategies than their Vietnamese counterparts and have more effectively carried out trade fairs across the nation to promote their products, experts at the Vietnam Retailers Association have said.
“As the result of recent trade fairs in Ho Chi Minh City, Thai businesses have been able to gain brand name recognition and win over consumer confidence in the quality of their products,” said a representative of the association.
The breadth of the goods and services Thai retailers are introducing to the marketplace is astonishing, said the representative as it includes everything from cosmetics, healthcare, skincare, and furniture to electronics.
Most notably, Thai spicy cuisine and food products sold in retail establishments and restaurants are gaining in popularity and carving out a hefty slice of the market in shopping centres throughout the major metropolitan centres.
These products compete head on with those of Vietnamese retailers – however, Thai products are benefiting from a better brand reputation for quality and dependability and are sold at highly competitive prices.
Vietnamese businesses all along the supply chain have simply failed to grasp the fundamental concept that there is more to competition and open markets than just selling a product at the lowest price.
“Consumers demand high quality first and foremost and that’s why droves have been flocking to Thai trade fairs and retail stores to purchase their products,” the representative said.
“I just feel that Thai retailers ‘put the consumer first’ and respect me more than Vietnamese retailers do,” said Thu Hoa, a consumer attending a recent Thai fair in HCM City.
Nguyen Ngoc Hoa, President of Saigon Co.op, in turn said the marketing campaign ‘Vietnamese people using Vietnamese products’ has paid some dividends and the results are encouraging but more needs to be done.
With the finalization of the AEC in sight it remains an open question whether Vietnamese retailers have the business savvy and clear understanding of what it takes to compete with their better prepared Thai counterparts.