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Vietnamese enterprises try to bring goods into the supermarket – Part 2: difficulties everywhere

10:07 | 07/08/2019

VCN - For many Vietnamese enterprises, especially small and medium enterprises, bringing goods into supermarkets is difficult due to many barriers from both inside and outside.

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Vietnam has many businesses producing fashion products, but their way into supermarkets is not easy. H.Diu

Detered by discount

As an enterprise specializing in the production and supply of seafood products, after many negotiations, Hung Phat Seafood Trading and Production Co., Ltd. still cannot bring its goods into supermarkets. Speaking about the cause, Ms. Nguyen Thi Hong, Deputy Director of the Company, said to enter the supermarket, the company must accept high discount rates. Moreover, goods in supermarkets are consignment, so enterprises have to accept late payment, which is paid 1-2 times/ month. In addition, the company's products also pay for packaging, replacing new packaging, birthday gifts, sales support and promotion.

“Compared to supermarkets, the sales through the store presents our own products will help us to balance the source of goods, capital, and be proactive in replacing old products. However, we still have not enough capital to build a chain of product introduction stores,” Ms. Hong said.

Similarly, Mr. Pham Anh Dung, Director of Dung Hau Agricultural Products Co., Ltd., said it is also "headache" to solve the problem of discounts, advertising and promotion costs, when negotiating to bring goods to the supermarket. Because this discount is different between supermarkets, it is not only inappropriate but there will also be an annual change, not only fixed at the original level.

Not all businesses can meet the above costs and conditions, especially as most Vietnamese enterprises are small and medium sized and lack capital. In addition to the obstacles of high discount costs, in order to bring goods into supermarkets, businesses also have to provide a lot of documents and conduct many procedures.

Mr. Pham Anh Dung said as an enterprise purchasing agricultural products from farmers and then processing finished products, the company must provide supermarkets with papers such as: business registration, tax code registration, certificate for food hygiene and safety, trademark registration, quotation, and ISO of products. Moreover, some enterprises said that they still have to provide their production processes; quality control plan and management system plan, which depends on the requirements given by the supermarket.

Weaknesses

Vietnam's economy has been booming, the number of businesses is growing, diversifying in scale and business mode. However, for a long time, Vietnamese enterprises have been 97% small and medium enterprises, their production capacity is still limited, unfocused on brand building, lack capital, finance and technology and human resources.

Talking about the difficulties and shortcomings of the textile and garment industry when they want to sell goods at Vietnamese supermarkets, Mr. Nguyen Xuan Duong, Vice Chairman of the Vietnam Textile and Apparel Association, said that garment products made in ASEAN were imported into Vietnam with low import duties or 0%. Meanwhile, Vietnamese garment and textile products are imported from China and non-ASEAN countries, so the import tax on raw materials is quite high. Moreover, Vietnamese garment products are under pressure from rising salaries and high service fees, leading to increased product prices. This is the reason why Vietnam garment products are still less competitive in price.

Moreover, according to many economic experts, "consciousness" in production and business of Vietnamese enterprises is also a problem. It is a lack of professionalism, even cheating, mixing poor quality goods to profit. Besides, Vietnamese enterprises are still unaware or ineligible to participate in promotion and introduction programs of Vietnamese products or promote the connection of product consumption. Therefore, the quality and design, as well as the stability of Vietnamese products, have become reasons for many supermarkets refusing to sell them.

Talking about this issue, Ms. Nguyen Thi Hong said that while large and brand-name enterprises easily bring goods into supermarkets, small and super small businesses have few opportunities to successfully access supermarkets. Items that enter the supermarket must be those from the most prominent suppliers, meeting the criteria for quality, design, prices and supply capacity. Therefore, an economic expert commented that only one in ten Vietnamese enterprise has the ability to bring goods into supermarkets, especially foreign supermarkets.

Enterprises assess that supermarkets are a distribution channel that helps promote brands and products to consumers in the widest and easiest way. Therefore, many businesses must try to stay and find appropriate policies so that their products can compete and be displayed in supermarkets in the most convenient locations.

However, the way to supermarkets of Vietnamese enterprises is always bumpy. Vietnamese enterprises are under pressure in the battle for market share: price squeeze, appropriated capital, Many difficulties have been making Vietnamese goods "fall" in supermarket shelves. Therefore, it needs changes and action of the authorities and the change from the self-awareness of the enterprises to not be "lost at home".

Prof. Dr. Dang Dinh Dao, former Director of Institute of Economics and Development Studies (Hanoi National Economics University):

In general, Vietnamese goods are still facing many difficulties when participating in chains, distribution systems and large supermarkets. The first reason is quality, the second is the brand that is not enough to be included in the distribution network. The quality, design and stability of Vietnamese products are very limited.

By Thao Diu/ Kieu Oanh