Econ
Segment for Luxurious household goods: Fierce competition
The arrival of well-known brands from Japan, Korea, Germany and the Vietnamese’s preference for foreign products have created fierce competition for domestic enterprises.
Foreign products’ dominance in the market
With the advantage of appearance and superior quality compared with local products, in spite of more expensive prices, imported products or products made by foreign direct investment (FDI) enterprises in Vietnam are dominating the segment for luxurious household goods. Surveys conducted at electronic retailers show that 80-90% smart products are imported products. Statistics from Ministry of Trade & Industry also give the fact that households goods and electronic products imported from Thailand are increasing and ranked 2nd in the market after China.
Even market for plastic products also faces similar situation. Recently, plastic products branded Lock & Lock has dominated the segment of high quality products with 20 stores and 300 selling channels including supermarkets and shopping malls. Not only Lock & Lock, the market is experienced new arrival of high quality products such as Biokips (Vietnam Komax company), BioZone (HomeTech limited), Incense.
Mrs. Nguyen Thi Huong (Nguyen Luong Bang street) said, imported household goods are more expensive than local products. For example, kettles from Philips in Vinmart are priced from 0.5-1.5 million NVD, while the local products are only from 200,000 to 500,000 VND. The imported one is more expensive but with higher quality than products made in Vietnam, which is the reason for the customers’ preferences to the expensive one. Local plastic products often have minor errors such as sharp edge, in turn potentially causing injury for customers, in addition to the low durability. Besides, foreign enterprises often introduce promotion campaign and sale events, while these events are not received sufficient attention from local enterprises, which is the reason for low demand in consumption.
Local enterprises improve products quality to gain shares in the market
Despite the domination of imported products in segment for high quality products, Vietnamese enterprise still have opportunities for development. As a local enterprise, they understand the customers’ demand, so that they can offer competitive prices with attracting labels.
Director of boards of Sunhouse Group Nguyen Xuan Phu said, in order to gain a foothold in segment for high quality products, enterprises must understand the customers’ behavior. For example, Chinese and European have different preferences with regard to pan for specific uses. However, Vietnamese prefers a mulfi functional pan to a specific kind of pan with a same price. Bearing this in mind, Sunhouse focuses on producing non-stick pans, gaining 40-50% market share at supermarkets, while this number in rural areas is 60-70%.
According to Vietnam Plastic Association, recently, many enterprises are taking advantages of loan policies for lending capital, in turn acquiring technology and expanding produciton to produce high quality products. For example, Song Long Plastic company has put its properties on mortgage to purchase equipment and restructure production line. At present, SongLong has more than 500 prodcuts copyrighted in Vietnam, Laos and China. Similarly, Dai Dong Tien Plastic JSC has pushed forward with research and develpment to introduce 5 types of products with different brands, such as: Household – high quality household goods; G.I.P – industrial plastic products; FoodPAK – high quality food containers; SINA - anti bacteria food container; Nice – indoor and outdoor furniture; at the sametime expanding network of 700 agencies across the country, and bringing its products to supermarkets such as Big C, Co.opmart, Vinmart.
Segment for high quality products are getting attention from enteterprises, however, in order for them to get a foothold in this segment, they must improve their products quality, at the same time developing marketing strategy to attract customers. On the other hand, enterprises also need the government’s support in terms of policies and credit services. It is thus the conditions for households goods from local enterprises not only getting a fairshare in domestic markets, but also is exported to other countries.
With the advantage of appearance and superior quality compared with local products, in spite of more expensive prices, imported products or products made by foreign direct investment (FDI) enterprises in Vietnam are dominating the segment for luxurious household goods. Surveys conducted at electronic retailers show that 80-90% smart products are imported products. Statistics from Ministry of Trade & Industry also give the fact that households goods and electronic products imported from Thailand are increasing and ranked 2nd in the market after China.
Customer at HC supermarkets.
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Mrs. Nguyen Thi Huong (Nguyen Luong Bang street) said, imported household goods are more expensive than local products. For example, kettles from Philips in Vinmart are priced from 0.5-1.5 million NVD, while the local products are only from 200,000 to 500,000 VND. The imported one is more expensive but with higher quality than products made in Vietnam, which is the reason for the customers’ preferences to the expensive one. Local plastic products often have minor errors such as sharp edge, in turn potentially causing injury for customers, in addition to the low durability. Besides, foreign enterprises often introduce promotion campaign and sale events, while these events are not received sufficient attention from local enterprises, which is the reason for low demand in consumption.
Local enterprises improve products quality to gain shares in the market
Despite the domination of imported products in segment for high quality products, Vietnamese enterprise still have opportunities for development. As a local enterprise, they understand the customers’ demand, so that they can offer competitive prices with attracting labels.
Director of boards of Sunhouse Group Nguyen Xuan Phu said, in order to gain a foothold in segment for high quality products, enterprises must understand the customers’ behavior. For example, Chinese and European have different preferences with regard to pan for specific uses. However, Vietnamese prefers a mulfi functional pan to a specific kind of pan with a same price. Bearing this in mind, Sunhouse focuses on producing non-stick pans, gaining 40-50% market share at supermarkets, while this number in rural areas is 60-70%.
According to Vietnam Plastic Association, recently, many enterprises are taking advantages of loan policies for lending capital, in turn acquiring technology and expanding produciton to produce high quality products. For example, Song Long Plastic company has put its properties on mortgage to purchase equipment and restructure production line. At present, SongLong has more than 500 prodcuts copyrighted in Vietnam, Laos and China. Similarly, Dai Dong Tien Plastic JSC has pushed forward with research and develpment to introduce 5 types of products with different brands, such as: Household – high quality household goods; G.I.P – industrial plastic products; FoodPAK – high quality food containers; SINA - anti bacteria food container; Nice – indoor and outdoor furniture; at the sametime expanding network of 700 agencies across the country, and bringing its products to supermarkets such as Big C, Co.opmart, Vinmart.
Segment for high quality products are getting attention from enteterprises, however, in order for them to get a foothold in this segment, they must improve their products quality, at the same time developing marketing strategy to attract customers. On the other hand, enterprises also need the government’s support in terms of policies and credit services. It is thus the conditions for households goods from local enterprises not only getting a fairshare in domestic markets, but also is exported to other countries.
