The business develops well thanks to the domestic market

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Customers learn about the products of Saigon Food. Photo: Thu Diu

Increase domestic market share

For many firms, the distribution of goods, revenue from the domestic market is still growing well. Many businesses that previously had export strengths have had new directions to return to the domestic market. Moreover, thanks to a series of programmes connecting direct and online trade between regions across the country, supporting digital transformation, building e-commerce, businesses and manufacturers have had the opportunity to find the domestic market, helping businesses overcome difficulties.

In 2020, VISSAN Vietnam Animal Industry Joint Stock Company achieved a total revenue of nearly VND 5,167 billion, reaching 101% of the plan. Profit before tax hitnearly 208 billion, up 15% compared to the plan. VISSAN leaders said 2020 created a push for the company to focus on exploiting and developing strongly the domestic market. The company has launched many new products and continuously expanded online sales channels such as launching: ordering service via Hotline, Fanpage and Sales website and continuing to open more food stalls on e-commerce platforms.

Nguyen Thi Thu Trinh, Deputy General Director of Saigon Food Joint Stock Company, said the company's revenue comes from export and domestic equally. But facing the difficulties of the pandemic, Saigon Food was flexible in its production plan to increase domestic products. The company built a research and development (R&D) team to not only launch new products, but continually innovate products in a direction more suitable to consumers' needs.

Thanks to the strategies of such firms, according to the Ministry of Industry and Trade, for the first twomonths of 2021, the total retail sales of consumer goods and services reached VND 904.5 trillion, up 5.49% compared to the same period last year. In terms of activity, retail sales of goods in the first twomonths of this year were estimated at VND 722.1 trillion, accounting for 79.8% of the total and up 7.8% over the same period last year.

Increased localisation

In addition to achieving the results from penetrating the domestic consumption market, production enterprises also focus on localisation of products and business services. The process of localising the supply of raw materials has also been deployed by Vicostone Joint Stock Company. Accordingly, Hue Phenikaa factory has met the needs of Vicostone and its parent company Phenikaa Group for high quality Cristobalite material to replace most of natural quartz, equivalent to 80% of the factory's output; the remaining 20% is sold outside the group in the domestic market and for export.

Vicostone leaders said this is one of the important factors, especially in the context of Covid-19, helping Vicostone reduce the risk of depending on the import of raw materials, the risk of exchange rate fluctuations, price advantages, ensuring supply and quality according to standards, improving product quality, effectively controlling production costs and increasing competitive advantage in the market.

In addition, domestic firmsalso cooperate with each other, share orders and technology. In some mechanical companies, businesses have linked together to form a supply chain of machines. For example, Haitian Vietnam Co., Ltd. has offered a 5% discount on the value of the machine and only needs a 5% deposit to be able to export the machine to the partner factory for production, the remaining 95 is paid within twoyears. As Huy Hoang Gia Steel Company Limited, Vietsteel Company, reduce 10% or more (depending on the product)helping manufacturing enterprises to have more machines, improving their capacity to workwith FDI businesses along with the revenue of related supply enterprises.

Businesses have to take advantage of every opportunity to develop the domestic market. According to the World Bank (WB), the developing domestic market can partially supplement or even counterbalance the foreign market. To date, nearly asixth of Vietnam's population has joined the global middle class with per capita spending of more than US$15 per day. At the current rate, one million Vietnamese people will join this group each year, making it the main growth engine of the retail industry in Vietnam.

Therefore, strengthening trade connections andstimulating consumer demand for the domestic market are solutions that ministries and branches need to strongly deploy in the coming time. Enterprises expect authorities to continue to direct, guide and support enterprises to implement programmes to stimulate consumption, strongly develop the domestic market, apply information technology and develop e-commerce and new business models consistent with new situation’s characteristics.