Domestic manufacturing industries are facing a crossroads with fierce competition from cheap Chinese goods and the integration of international brands.
However, according to experts, Vietnamese businesses can still develop and maintain their position by promoting traditional craft skills, optimizing modern technology and creating sustainable value for customers. The key to this solution is to take advantage of the strengths of traditional industries.
Back to traditional advantages
In a small booth in a luxury shopping mall in Thu Duc City (HCMC), Mr. Ho The Son, general director of Faifo Tailor Company, meticulously reviews orders from customers from all over the world who send in their measurements and wait for new suits or shirts.
Once the CEO of the FOCI fashion chain with hundreds of stores nationwide, even present abroad, one day Mr. Son witnessed the disappearance of FOCI amid the influx of international brands such as Zara, H&M and Uniqlo, along with cheap Chinese fashion products.
"When you see the wave Chinese goods With the recent cheap prices through e-commerce, I think the future of domestic brands is similar to FOCI many years ago.
Financial statements are always the weakest point of Vietnamese business
Foreign business "It is possible to suffer losses for months or a year when doing business in the market, but holding out for a few months is too much for domestic brands," said Mr. Son.
At that time, after closing the FOCI chain, Mr. Son realized that tailoring had great potential for development, so he founded the Faifo Tailor brand with the goal of building Hoi An into the "tailoring capital of the world".
Because according to Mr. Son, customers, especially the high income, do not hesitate to pay to have a perfectly tailored outfit according to your measurements and personal style.
And with a developed logistics system, within just 48 hours of placing an order, customers can receive tailor-made products from Vietnam, even if they are anywhere in the world. "We can deliver internationally thanks to modern tailoring technology supported by AI.
This is an advantage that helps Faifo reach global customers without having to open stores in each country," Mr. Son explained.
Instead of going head-to-head, many Vietnamese businesses are finding ways to adapt to the price war by niche markets and trying to build brands based on core values of quality and personalization.
According to Mr. Nguyen Chanh Phuong - Vice President of the Handicraft and Wood Processing Association of Ho Chi Minh City (Hawa), the Vietnamese wooden furniture industry finds it difficult to compete with Chinese goods in some markets. export market, because many raw materials still have to be imported from China.
"Therefore, the furniture industry is stepping up investment in design activities, helping to increase the proportion of products with custom designs (ODM) in exports, thereby affirming the capacity of the Vietnamese wood industry in segments with higher added value," said Mr. Phuong.
Cheap goods "haunt" Vietnamese businesses
Ms. Tran Phuong Nga, general director of Thien Long Company, said the flood of cheap Chinese goods is always an extremely big challenge for Vietnamese businesses.
Chinese goods not only have price advantages, but also possess a complete production and distribution ecosystem, from raw material supply chains to systematic online sales channels.
"China's manufacturing sector is not limited to a few businesses or a few manufacturing enterprise but an entire city only makes one product with a few thousand workers.
In a very complete ecosystem, with a very professional depth of operation, they can promote a low-cost strategy and build a distribution system. After capturing market share, they will continue to invest in factories in Vietnam," said Ms. Nga.
According to Vietnamese businesses, Chinese goods have proactively attacked the market to speed up the flow of surplus goods in the domestic market.
Wherever Chinese businesses go, they use their financial potential to dominate not only the low-price strategy but also the cost of bringing goods to market and building distribution systems.
And after gaining market share, they will build factories right in Vietnam with the initial trick of investing for export, but then will apply for additional licenses to sell to the domestic market.
Mr. Do Hoa, General Director of Tinh Hoa Management Consulting Company, also expressed concern about the increasing wave of cheap but poor quality Chinese goods, leading to negative impacts on domestic production and trade.
Having worked for multinational companies, Mr. Hoa said that the situation of excess capacity and dumping goods to neighboring countries has existed for a long time.
But more frighteningly, once domestic production is "destroyed", it will lead to dependence on foreign-made goods by domestic distributors and retailers. This risks leading to the closure of production facilities, increasing unemployment and the decline of traditional trade.
"Many Vietnamese businesses are still taking advantage of local knowledge and domestic production advantages to compete. But in the long term, if there is no clearer solution, the market share problem will be difficult," Mr. Hoa is concerned.
Mr. Ho The Son also admitted that the new business model is taking advantage of manual skills, but in the long term, financial solutions and support from the State must be sought to increase competitiveness.
"If we don't find a way to create differentiated value, such as improving quality and personalizing products, the market share problem will become increasingly difficult," said Mr. Son.
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