VietNamNet Bridge – Vietnamese household plastic products have been well- known to commoners, and now it’s the time for them to conquer the high-end products.

Foreign brands’ rapid expansion awakens Vietnamese plastics producers

Marching towards high-end market, why not?

Over the last five years, Vietnam made products have been dominating the home market after Chinese products were dislodged from Vietnam. Consumers nowadays turn their backs to Chinese plastics after hearing the rapid fire news about the toxic products, harming people’s health.

Domestic branded household plastic products have been available at the traditional markets, which were once controlled by Thai, Chinese or low-cost domestically made products.

After cementing their firm positions on the market of products for commoners, domestic manufacturers now think of entering the high-end market, especially after they see the South Korean Lock&Lock expanding its business on the market.

Dai Dong Tien, for example, has launched Sina green plastic boxes made of Nano Silver, which allows keeping food fresh for a longer time and having some other advantages. Especially, the products have very competitive prices, if compared with the imports.

Tan Lap Thanh Plastics has also launched Happy Lock products made of green technology.

However, domestic manufacturers have to struggle very hard to exist in the new market segment. They cannot spend big money on diversifying designs, have limited budgets for advertisement and marketing campaigns.

High end products require heavy investments

Market surveys all showed that Vietnamese plastic products have been favored by commoners thanks to their durability and reasonable prices. However, very few Vietnamese high grade household products have been available at supermarket chains.

The problem is that Vietnamese high grade products are still more expensive than the imports from Thailand or Japan. Therefore, Vietnamese products have been mostly used in popular families in cities and in rural areas.

In order to make high end products, Vietnamese manufacturers need to spend money to design products and renovate technologies.

It is estimated that domestic manufacturers have invested tens of billions of dong to make high end products, which is triple normal products. However, if so, they seem to lag behind foreign investors.

Trinh Chi Cuong, General Director of Dai Dong Tien Company, said though the company’s Sina products were marketed at the moment when Lock&Lock pushed up its investment in Vietnam, Sina is not the strategic product that Dai Dong Tien plan to use to compete with Lock&Lock.

Dai Dong Tien has a factory in Dong Nai which specializes in making high quality products for medical use. Duy Tan still focuses on making the products for the use in large scale, in big quantities and with low prices.

In fact, Duy Tan is completely capable to make higher grade household plastics. However, like other Vietnamese manufacturers, it still does not dare to sell products at high prices in order to compete with foreign ones.

“Foreign invested enterprises still hold the advantages in making food preservation boxes. Meanwhile, domestic enterprises still focus on medium class and low cost products,” admitted Nguyen Quang Son, Marketing Director of Duy Tan Company.

Shin Don Hoon, Lock&Lock Vietnam’s General Director, said the company’s revenue in the Vietnamese market reached 10.8 million dollars in 2008-2011.

Lock&Lock is not the only foreign rival to Vietnamese enterprises. Thai newspapers have reported that Nawaplastic, a Thai company that makes PVC tubes and many other Thai manufacturers are intending to go to Vietnam soon.

The Nawaplastic Industries (Saraburi) Co., Ltd has spent big money to buy big proportions of stakes in two Vietnamese plastics enterprises – Tien Phong and Binh Minh Plastics.

DNSG