Thai products flood Vietnam market

Thai products can be seen everywhere, gradually replacing cheap Chinese low-quality goods on supermarkets’ shelves and at pavement shops.

“In the past, Chinese motorbike accessories flooded the domestic market, but 70-80 percent of the products available in the market are from Thailand,” said Hai, a distributor of Michelin tires, a Thai brand well known in Vietnam.

Thai tycoons in recent years have been flocking to Vietnam, taking over a series of Vietnamese distribution chains. The move were described as a step to clear the way for Thai products to penetrate the home market.

Thai BJC Group, for example, spent $876 million to take over Metro Cash & Carry Vietnam. Meanwhile, Thai Corporation International, a subsidiary of BJC, bought 51 percent of Phu Thai Group, which ran 42 Family Marts.

Thai products, however, usually cost more than Chinese and Vietnamese products.

“Thai goods fit Vietnamese tastes and they are not too expensive,” said Le Thi Thanh Lam, deputy general director of Saigon Food.

The greatest success of Thai businessmen is that they are very professional in penetrating the Vietnamese market.

Robert Tran from Robenny, a Canadian consultancy firm, noted that the cementing of firm positions in the market with the retail growth rate of 15 percent and Vietnam’s high population of 90 million can help Thai retail groups increase the number of shops in Vietnam.

“This allows the companies to have an advantage in negotiating with manufacturers about commissions and prices,” he explained.

Meanwhile, Pham Ngoc Hung, deputy chair of the HCM City Business Association, noted that Thai businesses followed sound business strategies.

“The distributors develop their chains in a 5-10-year term plan, and do not do ‘hit-and-run’ business,” he said. “The larger the distribution networks expand, the more easily they can bring Thai products to Vietnam.”

While Thai businessmen have conducted rapid-fire attacks at the Vietnamese market, domestic businesses remain ‘bewildered’.

Tran said he was surprised about the way Vietnamese do business.

“Vietnamese businesses say they can completely satisfy requirements set by foreign partners. However, they cannot show sample products,” he noted.

“A large business even said it would only make an investment if the partner agreed to sign the contracts first,” he said.