They will face increasing difficulties competing at home Quyen stressed, as Vietnam joins trade pacts and lowers import duties in line with its obligations under the ASEAN Economic Community (AEC) early next year.
Huynh Van Hanh, deputy head of the Handicraft and Wood Industry Association (HAWA) of HCM City in turn echoed Quyen’s concerns and said domestic companies are sure to face increasing difficulties when the lower tariffs under the AEC kick in.
Hanh said domestic companies need to take heed and should make plans to shore up market share in the domestic marketplace with increased brand recognition for customers or they’ll lose out from the AEC formation.
For its part, the Vietnam Wood and Wood Product Association said it is aware of no less than 26 countries that are planning, or have made moves, to expand into Vietnam’s furniture industry – including China, Thailand, Japan, the Republic of Korea (RoK) and the UK.
According to the HAWA, the local market has been neglected as domestic companies have focused on pursuing big orders from foreign partners.
As a result they have failed to meet domestic customers’ tastes, establish distribution networks and develop brand names recognition.
There is near unanimity among the experts that limits in connectivity, trade promotion, and establishment of distribution networks have led to domestic companies and craft villages neglect of the domestic market.
This is the major cause that sales of imported goods have taken off and cornered the market in Vietnam.
It is time for companies in the industry to pay more attention to the domestic market, they advise adding that focusing on the domestic market helps businesses avoid overdependence on certain foreign markets.
In addition, it also helps businesses minimize risks in the integration process.
HAWA cautioned that though Vietnamese woodworks are exported to many countries in the world including demanding markets like the US, Japan and EU – it does not necessarily follow that they meet with the domestic demand.
Businesses must conduct market research, develop value chains for production and distribution along with good marketing and promotion policies to meet the domestic demand—or else AEC will spell trouble for the domestic market.
VOV
