Vietnam's Textile And Apparel Enterprises Are In A Desperate Retreat In The Local Market.
Export difficulties have forced Vietnamese textile and garment companies to focus on the local market. However, they did not get the desired success in the local market.
In the first two months of 2009, Vietnam's shoe exports were estimated to be $658 million, down 7.3 from the same period last year, according to figures from the Vietnamese presidency. In the context of world market changes and EU's strict control over imports of footwear products from Vietnam this year, the Vietnam shoe and Leather Association (LEFASO) promotes sales in the local market, considering it as a driving force for the development of footwear sector in the near future.
Vietnam shoes and Leather Association said that with the population of over 85 million, Vietnam consumes 1.02-1.10 billion pairs of different shoes annually, bringing 621 million dollars to the footwear industry.
The Vietnam shoe and Leather Association believes that locally manufactured products are more competitive than exports. Therefore, enterprises focus on the development of design and wholesale network. On the other hand, it is important to establish local wholesale channels, especially in developing traditional crafts villages, shoe manufacturers can improve their quality and meet local needs.
To do this, in terms of capital and credit, the Vietnam shoe and Leather Association recommends that the government and the Ministry of trade and industry help small and medium-sized enterprises and domestic producers, so that they can overcome difficulties. These units are on the edge of collapse and plan to streamline 20 staff.
With regard to taxation and policies, the Vietnam shoe and Leather Association also expects financial assistance to be promoted in domestic trade, such as organizing trade fairs. The goal is to set up a domestic wholesale network to balance exports and domestic production.
According to the 2009 report submitted to the deputy prime minister by the Ministry of trade and industry of Vietnam, the target export revenue of Vietnam shoe leather association was 50-53 billion US dollars, up 10 over the same period last year. In 2010, this figure is expected to rise to 6 billion 200 million US dollars.
In the case of export difficulties, many companies decided to return to the local market and look for new destinations. However, not all businessmen can do this. So far, they have only focused on export markets, such as the European Union, the United States and Eastern Europe. In addition, products from mainland China, Taiwan and Malaysia dominated the Vietnamese apparel market share.
Only some of the famous Vietnamese shoe brands can be foothold in the local market. At present, it is not easy for Vietnamese companies to penetrate into the domestic market. In addition, Vietnam, like many other countries in the world, has not established a professional wholesale channel.
Exporters focus on searching for processing orders. Companies that manufacture domestic consumer products also operate as wholesalers, because they build an independent wholesale network which is very expensive. It takes time and money to build trade marks, especially more than 70 of Vietnam's companies are small and medium-sized enterprises. In fact, the Vietnam shoe and Leather Association intends to join hands with some local wholesalers. However, many manufacturers are against this. They say they do not want to share wholesale channels with their competitors.
The coordination of wholesale business in Vietnam is still weak. For example, in the wholesale system of WT, if many brands of products are displayed in the same store, the salesperson will introduce their products to consumers rather than the products of other companies. In particular, many products on the WT shelf are imported. In addition, shoe companies need to work together to build "Vietnam made" brand and competitiveness.
Not just the shoe department, but also other industries, such as the clothing and textile and food industries, focus on the local market when exports are difficult. Economists say enterprises should return to the domestic market.
To achieve success, business units need to have a consumer friendly strategy. Vietnam's Ministry of trade and industry is completing a demand stimulus plan aimed at domestic consumption. Every businessman needs to develop business and production strategies to accelerate penetration into the domestic market.
Editor in chief: Xu Qiyun
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