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Local brands ignore the domestic market, focus on exports

VietNamNet Bridge - While foreign enterprises flock to Vietnam as they see it as an attractive market, Vietnamese manufacturers are focusing on selling their products abroad. 
VietNamNet Bridge - While foreign enterprises flock to Vietnam as they see it as an attractive market, Vietnamese manufacturers are focusing on selling their products abroad. 


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Vietnam is a big coffee exporter



“Vietnam imports 60,000 tons of processed coffee every year from Brazil and China”. “Imported organic garlic is priced at VND100,000 per bulb, selling like hot cakes”. Headlines such as these appear in local newspapers every day. 

Vietnamese enterprises try to sell their best products abroad, leaving the domestic market open to foreign producers.

Vietnam, the second largest coffee exporter in the world with 1.8 million tons of coffee beans exported in 2017, has to import a big amount of processed coffee.

As Vietnamese enterprises focus on developing overseas markets, the domestic market is left open to foreign manufacturers. The best known coffee roasters in Vietnam’s market are foreign. And so is the processed food market.

Over many years, the best coffee products have been exported as raw materials, with no brands. Meanwhile, Vietnamese, with the consumption level of 2.6 kilograms per capita per year, cannot find high-quality coffee to drink. Many Vietnamese have to drink coffee mixed with additives, flavorings and chemicals.

The best seafood products, such as ocean tuna or black tiger shrimp from Ca Mau mangrove forest, and the best organic farm produce, are reserved for exports, while products with lower quality are for domestic consumption.

Analysts said coffee companies prefer exporting coffee beans because it allows them to take back capital within a short time. Businesses like to export farm produce and fruits because foreign markets bring high profit margins. 

A businessman says that his workshop making products for domestic sale still go to work when they have wounds on their hands, but at the workshop making exports they do not. This shows that requirements on products for domestic consumption are less strict.

Enterprises have the right to choose where they sell products. However, their decision to export is having an impact on the national economy and local production.

As Vietnamese enterprises focus on developing overseas markets, the domestic market is left open to foreign manufacturers. The best known coffee roasters in Vietnam’s market are foreign. And so is the processed food market.

Vu Vinh Phu, former deputy director of the Hanoi Trade Department, said that businesses should gather strength to exploit the domestic market before exporting their products. But they are doing the opposite – focusing on selling products abroad and ignoring the domestic market.

“The dollars we get from exporting products are nothing compared with the Vietnamese brands we lose,” he said.

Vietnam exported $3.51 billion worth of vegetable and fruit in 2017, of which fresh fruits made up 75 percent, or $2.63 billion.


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