Speaking at a recent conference in Hanoi, Loan told guests that consumers are reporting they buy foreign goods because they perceive them as having higher quality and because they have upscale brand names.
“The brand names carry with them a certain prestige that similar locally produced products don’t possess,” said Loan.
“In the past, far too many businesses automatically assumed that the lower prices of locally produced goods were a positive and would drive their competitiveness with foreign goods entering the market,” said Loan.
“But now they are finding out they were dead wrong,” she said.
For some consumers in the nation, especially the younger ones, current fashions and trends are an important consideration when making the decision to acquire a product, said Loan.
Through television, these consumers are becoming increasingly aware of the fashions and trends in other parts of the world. Hence, the global fashions and trends dictate the preference for foreign goods for these individuals.
But increasing numbers of people are going for international brands rather than local ones, she said, because the product changes the image these consumers have of themselves.
It makes them feel proud, more beautiful or handsome, and smarter when they buy imported items because, to them, the purchase is a status symbol that depicts social acceptability and class.
At the Metro, Aeon and Lotte supercentres, which are rapidly gaining in domestic market share, foreign produced goods are pushing Vietnamese made products right off the shelves.
Currently, over 90% of all instant noodles at these stores come from Thailand, the RoK, Japan or Malaysia.
Mr Loan said even though a foreign package of noodles costs up to US$.80 (VND16,000), three-fold that of a Vietnamese packet of noodles, many consumers still prefer them.
“When respect to glass housewares you won’t find many stores selling Vietnamese made products,” said Mr Loan.
“Most plates, bowls, cups and other glassware products are imported from Thailand, Germany or China.”
Overflowing with all sorts of imported goods, the Vietnam market is grappling with a serious lack of locally manufactured products in many retail establishments and product lines.
The attitudes and perceptions of consumers toward their choice of goods is sometimes fickle, said Loan. For example, electronic goods from Italy may be perceived as of poor quality but Italian clothing is perceived as fashionable and high quality.
Meanwhile, electronic goods made in Thailand are perceived with positive attitudes while their clothing and footwear is negatively perceived, she said.
Echoing similar sentiments, Nguyen Thi Thuy, deputy general director of Saigon Co.op said: “The problem with patronizing local products is that they are usually of inferior quality and in many instances downright shabby.”
If you check out a foreign product, you will quickly realize that what they offer for a little higher price is generally of substantially better quality.
I don’t find this encouraging for local companies, she said, unless they further improve their products durability and quality and institute brand building strategies to fully meet the needs of the nation’s consumers.