Rough Vietnamese goods to the countryside


Occupying 70% of the population, the large rural market offers many opportunities for businesses. However, some businesses do not fully understand this market, and have dishonest types of business, so their revenue is negligible.

Growth

Data from a market research company shows that people in rural areas are 3 times more likely to buy shopping than urban areas. Rural areas continue to be a new source of growth for manufacturers. According to the recently released report of Nielsen Vietnam, the growth of the FMCG market in 2017 was 4% in urban areas, 6.1% in rural areas compared to the previous year. .

The studies of Nielsen, Kantar Worldpane showed that rural consumers who buy gas stoves, washing machines, water heaters, and air conditioners are not inferior to urban families.

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Thanks to the potential of this market, some Vietnamese enterprises such as My Hao and Bidrico have been very successful in their business. While the sales of other businesses in the rural market only account for 20% of the total revenue, this figure at Bidrico reaches 70%, in My Hao up to 80%. And thanks to the continuous growth of the rural market, Bidrico entered the urban area to compete with beverage companies from abroad; Some of My Hao’s chemical and cosmetic products have competed fairly with those of multinational corporations.

Enterprises bring Vietnamese goods to the countryside through Vietnamese goods fairs. Photo: X. Thao

Evaluating the rural market, Mr. Luong Van Vinh – General Director of My Hao Company, said that this is the fulcrum of Vietnamese enterprises. According to Mr. Vinh, on average, each province has at least 3,000 potential customers, the number of customers to exploit is not so much. That is not including the growing population, so there are many opportunities for businesses to exploit.

Decline in trust

The potential is so, but exploiting the rural market is not easy. Survey results of the Vietnam High Quality Business Association recently showed that the percentage of consumers who like and often buy domestic products is 51% and 60% respectively. This is a worrying signal because it has decreased by 27 percentage points and 32 percentage points compared to 2017. One of the reasons leading to this situation is consumer confidence in Vietnamese brands. Many businesses sell poor quality.

Due to the decline in confidence in Vietnamese products and efforts to expand market share with the methodical strategy of FDI enterprises, rural consumers use imported products to increase. In addition, reputable enterprises in the market also have to face a greater level of risks due to the problem of counterfeiting stalls and goods.

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“Not only the individual business, each case but also the responsibility of the management agencies. When confidence in the reputation of Vietnamese products is eroded, it will create more holes for foreign goods to penetrate” Mr. Nguyen Van Phuong – In charge of investigation of Vietnam High Quality Business Association said.

Psychology of most Vietnamese consumers is more concerned with quality and price of goods rather than origin.

In addition to the above factors, Vietnamese businesses also face financial challenges. Because rural areas are spread out with many small customers, it is necessary to have sufficient financial resources to cover the products to remote areas. This is not only a difficulty of the Vietnamese market but also a common problem of other countries in Asia.

Sharing more details about this difficulty, Mr. Nguyen Anh Dung – Director of Retail Measurement Services Nielsen Vietnam said that some rural areas are more promising than others, so Potential zoning is crucial for businesses to maximize their investment resources.

In addition, to be successful, producers need to be knowledgeable about consumers in rural areas. Currently, rural consumers are gradually getting used to urban life thanks to the proliferation of technology and the gradual improvement of infrastructure.

Despite the obstacles, enterprises said that in order to survive and develop in the current conditions, there is nothing more than having to explore the rural market. To do this, first of all, it is necessary to invest in human resources, manage and build a systematic distribution system. Must bring Vietnamese goods to the countryside regularly through the programs of associations and management agencies such as Vietnamese goods to the countryside, Vietnamese goods fairs …

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This helps businesses advertise their brand, build a distribution system in place. But in order to build up a distribution system, after each market or every Vietnamese product promotion program, businesses should let employees bring products to small traders in the localities that the fair just passed to penetrate. deep into the market.

Equally important is to focus on investment in product quality. Because, the psychology of most Vietnamese consumers is more concerned with the quality and price of the goods rather than the origin. Enterprises cannot convince consumers by simply campaigning and calling for “Vietnamese to use Vietnamese goods” when product quality does not meet expectations. And this is even more difficult for consumers in rural and mountainous areas.

Minh Hao
* Source: Saigon Businessman

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