Buyers tighten spending, businesses get headaches during Tet season

There are only nearly two months left until Tet, and at this time, many localities and businesses are ready to source goods to serve the year-end shopping season.

Viet Nam News

Viet Nam News



Customers shop at a supermarket in HCM City. PHOTO: SAIGON CO.OP/ VIET NAM NEWS

January 3, 2024

HÀ NỘI — In the current difficult economic situation, many businesses say demand may be lower than usual this Tết (Lunar New Year) season.

To increase sales, businesses must find ways to diversify sales methods, product types, and implement promotional programmes.

There are only nearly two months left until Tết, and at this time, many localities and businesses are ready to source goods to serve the year-end shopping season.

The Domestic Markets Department under the Ministry of Industry and Trade (MoIT), said that the source of goods for Tết this year was very abundant not only in quantity but also in variety. Businesses were promoting demand stimulation to boost sales.

According to many businesses, the biggest headache this year is stimulating consumption during the Tết season.

Talking to VnBusiness online newspapers, Nguyễn Thanh Hùng, Chairman of the Board of Directors of Nghệ An Fishery Joint Stock Company, said that this enterprise specialised in distributing Cửa Lò fish sauce products, a brand that has over 70 years of experience.

Currently, the company is collaborating with large supermarket chains and distributors to bring products to consumers.

Commenting on the difficult economic situation this year and the lives of workers being affected, Hùng said that businesses would look for direct distribution channels in industrial parks.

“We will have a preferential sales programme and discounts so that poor workers can access products, thereby developing purchasing power,” said Hùng.

Currently, the fish sauce products are present in a number of supermarkets in Laos, Taiwan, Czech Republic and Romania.

Therefore, during the traditional Tết holiday, businesses also took advantage to promote distribution through these channels, he said.

Phạm Tiến Duật, Deputy Director of Vũ Gia Herbal Company Limited, also commented that this year’s demand was forecast to be only equivalent to last year due to economic difficulties.

Accordingly, output was expected to grow by 30 per cent this year compared to last year, but revenue would not increase, he said.

This year’s market was very difficult, said Lý Kim Chi, chairwoman of the HCM City Food and Foodstuff Association.

Currently, sales growth is weak, so businesses stocking up Tết goods only increase reserves by 15 – 20 per cent compared to normal, to meet market demand in case purchasing power suddenly soars.

The increase in exchange rates caused the cost of importing raw materials for food production to rise for food businesses, but in the current context, businesses accepted low profits to sell goods, said Chi.

More tax leverage needed

Stimulating domestic consumption demand at this time was the most practical solution, said Dr. Đỗ Thiên Anh Tuấn, public policy lecturer at the Fulbright School of Public Policy and Management, especially associating with the “Vietnamese people prioritise using Vietnamese products” campaign.

We needed policies to link incentives for domestic consumption with domestic production, he added.

Encouraging the “Vietnamese people prioritise using Vietnamese products” campaign needed to be done through tax policy, he said.

Reducing value-added tax from 10 per cent to 8 per cent was necessary, because value-added tax was the largest revenue contributor, making up 33 per cent of total budget revenue, and spread very strongly in all fields, said Tuấn.

However, the tax policy needed to be reduced over a long enough period, instead of six months, to create motivation for the market, he said.

In addition, it was necessary to strongly promote reduction of corporate income tax and personal income tax. Personal income tax was outdated, he noted.

Besides, Tuấn also believed that it was also necessary to develop the domestic distribution and consumption system.

If we did not understand the domestic distribution system, we would lose domestic production, he said.

Vietnamese distributors must proactively maintain the home ground, because through the distribution system, Vietnamese goods could enter the market and even expand into neighbouring markets. — VNS

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