Domestic Goods Are Used Less Than Foreign Goods in Vietnam

 Essay on Domestic Products Are Used Less Than Overseas Goods in Vietnam

Abstract

This report studies that Thai companies are facing challenges and competitions with foreign firms when their products flock to Vietnam. This kind of results in a large number of Vietnamese clients who ingest domestic items less than international ones. The causes for this problem are that some local merchandise's price is more expensive and their quality is worse than foreign products. Moreover, substantial foreign motor cycle demand and belief in foreign firms affect Japanese who might prefer overseas brands to domestic. We recommend that the government needs to have campaigns and encourage the domestic corporations make programs to attract even more Vietnamese clients. Introduction

Joining the WTO in 2007 brought benefits to Vietnam which made available new market segments and produced opportunities to get Vietnamese customers to have more choices among domestic and foreign goods. However , this created problems and obstacles for Thai companies when competing with foreign firms which control the Thai market in a few fields just like clothing, bikes and detergent. Purpose

This statement will evaluate three explanations why domestic merchandise consumption is lower than foreign ones in Vietnam and gives some offered recommendations to help local corporations overcome this challenge and attract more profits efficiently.

Studies

1 . High price

Since Vietnam joined the WTO, the amount of foreign items which are imported has increased speedily. The loss of imported charges may lead to the price of foreign items becoming below local ones. For example , inspite of the same top quality, the cost of garments imported supply by china manufacturer is only VND500, 000 to VND1million although the price of items made in Vietnam is a couple of million dongs (baomoi, 2011). The reason for this matter is that even though labor price in Vietnam is cheaper within China, 1, 152 in contrast 2, two hundred fifity international dollars, labour force in Vietnam lacks important skills. Subsequently, the companies have to pay the amount of money to train them, resulting in the price of clothes made in Vietnam which is greater than China's cost. Therefore , the cost of clothes produced in Vietnam is higher than in China. In addition, according to Việt Nam News (2009), the poor generally choose products produced in Cina because they are cheaper than produced in Vietnam goods whereas the rich opt to buy famous foreign items. In addition , the high technology market as well faces the similar issue. As shown in Physique 1, when foreign brands' the average selling price of the laptop computer such as Lenovo, HP, Acer and Dell is via US$ 640 to US$ 1000, the cost of domestic brands such as CMS and V-Open is over US $1000 (VietNamNet/Viet Nam Reports, 2009). Due to the lower price, international brands distributed 220, 500 laptops in 2007 and control the Vietnamese industry whereas domestic brands only occupy a small market (Vinhfc, 2008). This proves that price impacts consideration when customers buy items.

Determine 1: The regular price of laptops in Vietnam in 2009 (Adapted from VietNam Net/ Viet Nam News, 2009) 2 . High demand foreign bikes

The Grey Group conducted a survey on customers' requirements in 16 nations inside the Pacific place in 2007 and found that ‘77% of Vietnamese persons favour international brands although across Asia is nearer to 30%' (vinhfc, 2008). Mainly because 2 . 21 million motorbikes were bought in 2009, Vietnam became the fourth largest motor cycle market in the world after Cina, India and Indonesia (Quoc Hung, 2010). That is the reason so why the biggest motorcycle brands just like Honda and Yamaha built motorbike factories in Vietnam. However , these kinds of investments remain not enough to satisfy the call of customers mainly because many merchants sell imported motorbikes just like Piaggio and SH to be able to meet the needs of several Vietnamese buyers who like foreign brands. Based on the information of the Basic Statistics Office of Vietnam, 25, 000 motorbikes were imported...


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