Vietnamese businesses still struggle to find the way to live

Vietnamese businesses still struggle to find the way to live

The Vietnamese enterprises in the business fields dominated by foreigners, have still been struggling to survive. And they need the support from the State.

According to Pham Xuan Hong, Deputy Chair of the Vietnam Textile and Apparel Association (Vitas), in order to ease the reliance on material imports, which makes garment products more expensive than exports, enterprises need to control the material areas to take initiative in setting up their business plans.


To date, Vietnamese garment companies have been heavily relying on foreign material supplies with 90 percent of cotton and 70 percent of fiber materials imported from foreign countries.


Hong said that Vitas has encouraged garment companies to develop the domestic market, since export markets have been narrowed due to the demand decreases. However, he said businesses would not succeed in conquering the home market if they do not get the support from the State.


“It would be impossible for domestic garment companies to regain the home market, if counterfeit goods and low quality products still have been available at shops and traditional markets,” Hong said.


In the retail industry, Nguyen Ngoc Hoa, Deputy Chair of the Vietnam Retailers’ Association, complained that Vietnamese enterprises now have to fight in an unequal war.


While foreign retailers have powerful financial capability, use advanced management technologies and they can accept losses for some years to develop the market, Vietnamese retailers are smaller and do not have advanced technologies,


Also according to Hoa, when opening the retail market under the WTO commitments, other countries in the world also try to attract foreign investors, but they always set up the barriers to prevent foreign investors from expanding their retail networks too rapidly.


Meanwhile, in Vietnam, foreign retailers can find many ways of dodging the laws to set up new retail points, expand the distribution networks, increase their competitiveness and drive domestic retailers to corner.


The Vietnam Retailers’ Association has lodged a complaint to the relevant ministries and the government on the problems and it is now awaiting the final decision from competent agencies.


Businesses need substantial support

Dr Nguyen Minh Phong, a well-known Vietnamese economist, said that Vietnamese businesses have been facing difficulties from all sides. They not only have limited financial capability, but also have to borrow bank loans at overly high interest rates.


Meanwhile, the policies laid down by the government to support enterprises remain ineffective. As a result, most profits have fallen into the hands of foreign enterprises. Vietnamese businesses’ limited capability cannot help create big added value, therefore, businesses do not have money to re-invest and offer high pay to workers.


Nguyen Trung Thang, Head of the Marketing and Administration Institute, said that once Vietnam opens its market widely in all business fields, the competition between Vietnamese and foreign investors would be even stiffer. Therefore, the state should give support to develop associations, which would link enterprises and help them grow up.


Dr Dinh The Hien believes that Vietnam still has great potentials and advantages in many other business fields. For example, Vietnam’s plastics have become more favored than Thai products, while foreign made products can no longer flood the domestic market.

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