Strategy of success for Japanese and Thai products in Vietnamese market

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• Vietnamese market

Japanese and Thai shops and supermarkets are dominating Vietnam’s retail market by offering competitive prices on a wide range of goods from food and household utensils to electronic products.

In years past there was a handful of Japanese and Thai shops operating throughout Vietnam, but today the retail landscape has transformed and there are now supermarket chains and shops from Japan and Thailand spread all over the country.

According to a Ministry of Industry and Trade report, Vietnam ran a trade deficit of US$3.5 billion with Thailand during the first eight months of the year. Thai products are now available in nearly 9,000 markets, supermarkets, and electronics stores, making up 30-50% of the market share in major cities. Thailand accounts for half of the total 100 points of sale in foreign supermarkets retailing in Vietnam.

Meanwhile more and more Japanese giants like AEON, Ministop, Family Mart, Tokyo Deli, Gyi Kaku, Oshka Ohsho, Mini Stop, 7 Eleven, and Lowson have made broader inroad into Vietnam with their expanded market shares and attempt to meet the increasing demand of locals.

The Sakura chain of Japan has increased its number of shops to 10 over six years, while TokyoLife has 18 shops in Hanoi, 2 in Ho Chi Minh City, and 35 located across other provinces and cities.

Economic expert Pham Chi Lan has attributed the popularity of Thai products among Vietnamese customers to the marketing strategies developed by Thai companies in the past. According to Thai businesses, Vietnam has a large, burgeoning market, a young population, high domestic consumption, and reduced tariff barriers.

Judging from the above advantages, some Thai groups conducted thorough studies of Vietnamese consumer psychology and found similarities between Thai and Vietnamese customers who favour promotional goods.

One retail expert says customers’ demand for Japanese products are opening up an opportunity for Vietnamese businesses to better improve their competitiveness, develop strategies for the production of safe products to meet higher customer demand. Particularly, to put Vietnamese products on the shelves of foreign supermarkets, domestic businesses need to ensure the criteria of safe quality that fit all customers’ requirements.

The expert says that by following the trading methods of Japanese businesses, their goods will gain firm foothold in the Vietnamese market thanks to their great efforts by themselves and support from relevant agencies who can provide useful information for businesses and consultancy services on procedures and personnel, even supporting applications for investment licenses.

The Japanese government and businesses have made careful preparations for the export of goods to Vietnam through improving and developing social infrastructure, payment services, and distribution channels, he says.

Vu Vinh Phu, chairman of the Hanoi Supermarket Association, says despite having a potential retail market, domestic businesses do not yet know how to fully exploit it for lack of the necessary and sufficient conditions to properly carry out a domestic trade development project, highly qualified personnel and financial resources, closer connectivity, and production restructuring. A strong domestic production industry is needed to develop the retail industry, he emphasizes.

Source: VOV _ CUSTOMS NEWS