Vietnamese consumers losing interest in domestic products: survey

Brands made in Vietnam are losing their position in the local market due to fears of trade fraud that are pushing shoppers toward foreign products, according to a new survey.

Only 51 percent of the 17,300 consumers surveyed said they favored Vietnamese products, down 27 percentage points from last year.

The rate of people who actually shop for local products regularly fell 32 percentage points to 60 percent, according to the survey released by the High Quality Vietnamese Goods Business Association this week.

These large drops are “concerning”, said the association, which works to promote consumption of products made in Vietnam.

Lack of transparency in many businesses has shaken consumers’ trust, it said.

Fraud allegations such as those filed against the renowned high-end brand Khaisilk last October have hit consumer confidence hard, it said.

The case broke out after a business in Hanoi complained on Facebook that scarves it had bought from the brand were actually made in China, as one of them carried two tags: “Khaisilk Made in Vietnam” and “Made in China.”

Following an investigation in December, the trade ministry revealed that the company’s products did not contain any silk at all, and police are considering criminal charges.

“This is not a matter of individual businesses; it’s the management authorities as well,” said the report. Khaisilk was established around 30 years ago and promotes its products as high quality silk from Vietnamese craft villages.

With suspicion surrounding Vietnamese products, competitors from Japan, South Korea and Thailand have stepped in.

Regular consumers of these products have jumped from 3 percent last year to 8-10 percent, and 17 percent when it comes to confectionery and beverages.

“Foreign businesses have been making efforts to penetrate deeper into Vietnam’s retail market,” said Nguyen Van Phuong, the survey’s coordinator.

And once they get here, it’s easy for them to put their own products on the shelves, he said.

Thailand’s B’smart, Japan’s Family Mart and 7-Eleven, and South Korea’s Lotte and Emart have become popular retail outlets, and there are now hundreds of them across the country.

Vietnam’s retail market is in full swing. Retail sales in 2017 rose 10.9 percent from the previous year to more than $173 billion, according to the General Statistics Office.