Accelerating economic recovery (*): Promoting exports and consumption

According to experts and businesses, the driving force for economic growth through exports and domestic consumption is becoming more evident as indicators of export and retail growth have improved and are showing a strong upward trend in the final months of the year.

Export optimism returns

According to the Ministry of Industry and Trade, import and export activities in the last 4 consecutive months (May, June, July, August) have maintained positive growth. Mr. Ta Hoang Linh, Director of the European - American Market Department (Ministry of Industry and Trade), said that although in the first 8 months of 2023, the most important export markets for Vietnamese textiles, footwear and wooden products, the US and EU, all decreased quite sharply, Vietnam is still the 2nd largest exporter of footwear, 3rd largest exporter of textiles and 5th largest exporter of wood and wooden products in the world.

Vietnam's fashion, furniture and household goods group still has many competitive advantages in terms of product quality, technical level and ability to meet strict requirements on labor and environment.

Increased year-end shopping demand and stimulus measures will help consumption improve. Photo: HOANG TRIEU

Mr. Pham Xuan Hong, Chairman of the Board of Directors of Saigon 3 Garment Company, Chairman of the Ho Chi Minh City Textile, Garment, Embroidery and Knitting Association, announced the good news that Vietnamese textile and garment enterprises are receiving export orders again as markets are starting to have year-end shopping needs. This is the motivation for enterprises to focus on production and completing year-end orders.

To get more orders, businesses need to promote and advertise their products to new markets, improve product quality in familiar markets and meet green production requirements for each market and partner. And to do this, businesses need to actively promote the transition to green production while understanding the purchasing power situation and market recovery to invest in producing goods at suitable prices.

In the leather and footwear sector, the Vietnam Leather, Footwear and Handbag Association (LEFASO) forecasts that exports in this industry will recover in the fourth quarter, but for the whole year, it is expected to still decrease by about 7.5% compared to the previous year.

"The difficult situation will last until the first quarter of 2024. However, the market has shown many positive signs when inventories in markets where Vietnam has export strengths have decreased. For example, the inventory ratio of leather and footwear in the US decreased from 20% in June to 10% in August, and is likely to be 0% by the end of the year," said Mr. Diep Thanh Kiet, Vice President of LEFASO.

Regarding the agricultural, forestry and fishery sector, Ms. Le Thi Hoai Thuong, Deputy Director of Vietpepper Company Limited (Vietpepper, Ho Chi Minh City), said that since mid-August, exports have recovered as EU and US importers prepare for the year-end holiday season.

Notably, many customers who previously bought raw materials for packaging now order companies to process the final products to put directly on the shelves due to the high cost of labor in the EU and the US. Thanks to that, in addition to the amount of goods bearing the Vietpepper brand, there are also many processed goods, helping businesses increase exports by about 10%-15%.

Meanwhile, Mr. Nguyen Van Thu, Chairman of the Board of Directors of GC Food Joint Stock Company (Dong Nai), informed that since the third quarter, exports have clearly recovered. This has helped the company's exports in the first 9 months of the year increase by 25% in volume and 20% in value compared to the same period last year. "To reach the end of the year with a growth target of 20% - 25% compared to last year, the company is making efforts to retain old customers and explore new markets such as the Middle East, North Africa, and Eastern Europe," Mr. Thu stated.

One positive news is that Vietnamese agricultural and food products have many advantages, so importers trust and order them.

"Previously, when buying agricultural products and food, customers often chose Thailand, but now Vietnam is sought after because it has many large-capacity food factories that meet high international standards. Moreover, thanks to the free trade agreements that Vietnam has signed, our products have more competitive prices," Mr. Thu analyzed.

Mr. Tran Anh Khoa, General Director of Anh Khoa Company Limited (Ca Mau), specializing in shrimp export, also confirmed that there were quite a lot of orders but there was a shortage of raw materials so the company could not take full advantage of the opportunity. The reason is that interest rates have remained high in the past so the company did not have capital to stock up on raw materials, mainly having new contracts to organize purchasing and production.

Busy for the year-end market

For domestic consumption, at this time, businesses have started production and business to serve the market in the last months of the year and the Lunar New Year. Mr. Le Anh, Director of Le Gia Food and Trading Services Company Limited, said that the business results of the whole year depend on the fourth quarter, so they are making all efforts to prepare for the biggest sales season of the year. The goal of the company this year is to achieve the same sales as last year, but must prepare more carefully.

To help consumers save money on shopping, the company launched many large-sized products and many products in the mid-range segment. In particular, the company also set aside a large budget to coordinate with retail systems to launch attractive promotional programs to stimulate demand.

In addition, Le Gia also launched a number of new instant products, convenient for consumers who are increasingly busy. Thanks to that, although the general market has decreased, products such as: kho quet, shredded shrimp floss, pre-cooked meat, steamed mackerel... still grow well. The company continues to launch new products such as: complete seasoning sauce for braised fish, braised meat, stir-fried shrimp paste, kimchi shrimp paste,... to explore the market.

According to Mr. Nguyen Manh Tan, Marketing Director of Haravan (a company providing e-commerce and retail solutions), overall retail sales via e-commerce will grow very strongly at the end of this year, higher than the general market. The reason is that people in their 30s and 40s, who maintain the family economy and decide to shop in the family, are used to online shopping and they are busy with work so they do not have time to go shopping for Tet in the traditional way.

In addition, e-commerce platforms also increase promotions, free shipping... so prices are very competitive. "However, businesses need to prepare sales scenarios for peak occasions, cooperate with appropriate livestreamers to boost sales" - Mr. Tan noted.

In Ho Chi Minh City, it is forecasted that from now until the end of the year, people's demand for goods and services will increase while gasoline and raw material prices have not shown any signs of cooling down, so the possibility of commodity prices increasing is inevitable. The city's departments, branches and enterprises have carefully prepared plans to intervene when necessary.

Mr. Nguyen Nguyen Phuong, Deputy Director of the Department of Industry and Trade of Ho Chi Minh City, said that in order to create market confidence for both consumers and businesses, the city has directed and the Department of Industry and Trade to focus on the 2nd concentrated promotion program of 2023 at the end of the year.

The Department of Industry and Trade also takes full advantage of occasions such as Black Friday, Christmas, New Year, and Lunar New Year to launch promotional programs, announcing early with full information for businesses to participate. "When businesses have confidence and a specific plan, they will produce, reserve, and supply fully. On the other hand, when well prepared, businesses will calculate stable and reasonable selling prices, so they do not worry about sudden price increases" - Mr. Phuong stated.

Before the information that the Government assigned the Ministry of Finance to review and submit to the National Assembly the extension of the 2% VAT reduction period for another 6 months, that is, until mid-2024 (instead of December 31, 2023), manufacturing, trading and distribution enterprises were all excited.

"VAT is included in the price, reducing VAT by 2% will help reduce the price of goods and services, stimulate consumer shopping, help businesses sell more goods, especially during the peak shopping season at the end of the year" - Ms. Ly Kim Chi, Chairwoman of the Ho Chi Minh City Food and Foodstuff Association, said.

Focus on export quality

At a press conference on the afternoon of October 10, Mr. Pham Van Cong, Chairman of the Vietnam Cashew Association (Vinacas), said that based on export results and current orders, the cashew industry is certain to achieve the export target of 3.2 billion USD this year. "However, businesses need to strengthen quality control and food safety to maintain the reputation of Vietnamese brands. Because the association has received warnings from major customers about the decline in the quality of Vietnamese cashew nuts," Mr. Cong informed.

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