In high inflation, Vietnamese consumer prefer cheap goods

Published: 11/06/2011 05:00



petroleum and goods price increases have forced people to fasten their belt.
Experts say it is difficult to ask Vietnamese to love Vietnamese goods in these
circumstances, especially when the domestic products remain expensive.

domestically made products, the fashion shop Cam999 on Vinh Ho street in Hanoi
also sells the clothes imported from Thailand or Guang Xi-China. Thu
Giang, the shop’s manager, said that “made in Vietnam” clothes have always been
selling the slowest.

“We import
products from Thailand
and Guang Xi once a month, because the sale goes well, while 30 percent of
domestic products have been left unsold since April because of the high
prices,” Giang said.

affirmed that Vietnamese products have high quality and they are well designed,
but the prices are always 30-50 percent higher than Thai or Chinese goods. A
dress sourced from Thailand
or Guang Xi is priced at 80-200,000 dong only, while a product made in Vietnam has the
sale prices of between 220,000 and 500,000 dong. Foreign made products have
diversified designs with bright colors, while domestic products are mainly made
of cotton and have classic style.

“It is
clear that Vietnamese goods are better, but in the context of high inflation,
consumers would prefer cheap products,” she said.

Lan Anh, a
buyer, said that she also does not choose Vietnamese clothes, because of the
high prices. “With 500,000 dong, I would be able to buy many things, from
dresses, shirts to belts. Meanwhile, with the sum of money, I can buy one or
two made-in-Vietnam products,” she said.

In fact,
the story about the inferiority of Vietnamese goods on the home market has been
repeated many times, but to date, no proper solution has been found to improve
the situation. Nong Thi Lam, Head of the Lang Song province’s Steering
Committee on implementing the “Buy Vietnamese” campaign, said that the biggest
obstacle the province is facing is to compete with Chinese goods.

Lang Son
borders Guang Xi province in China.
It has two international border gates, two national border gates and seven
market areas, which are the advantages to facilitate the trade. However, these
are also the advantages for Chinese goods to flow into Vietnam.

goods with low prices and diversified designs are flooding Lang Son and
crowding out domestic products,” Lam said.

An official
from the Retailers’ Association has admitted that it is difficult to ask
Vietnamese people to choose Vietnamese goods at this moment, when the prices of
domestic products remain relatively high.

He said that
Vietnamese consumers would prioritize purchasing cheap products because they
need to cut down spending. Meanwhile, Vietnamese goods are always expensive.
Even pork, which is an advantageous product of Vietnam, is still 30-40 percent
more expensive than imports.

people will not love Vietnamese goods, if the goods remain more expensive than
import products,” he said.

In May
2011, the consumer price index (CPI) increased by 2.21 percent, a lower
increase in comparison with that in previous months. However, the figure was
still high enough to push the CPI increase so far this year to the two-digit
level. The Government has decided to raise the inflation rate target to 15
percent instead of the previously set level of 7-8 percent.

Le Dang
Doanh, a well-known economist in Vietnam, also said that it is not
easy to call on Vietnamese people to use Vietnamese goods in the context of
price increases.

Doanh said
he was told by the businesses in light industries that businesses have been
falling in big difficulties. Electronics manufacturers said, since the import
tariffs on electronic parts are as high as 15-20 percent, they would rather
import Chinese goods to sell domestically, rather than importing parts to
assemble in Vietnam.
As such, the manufacturers have become distributors. Meanwhile, many paper
companies have to sell stakes to foreigners, and dare not to borrow money from
banks because of the overly high interest rates.

Source: VnExpress

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