Many small production sites, garment processing facilities, and craft villages are facing difficulties or being forced to leave the game due to pressure from cheap imported goods, especially Chinese goods sold online.
In addition to the economic difficulties that cause people to limit shopping, many units believe that Chinese goods Low prices are a big factor. However, it is not easy to learn from China's way of doing things.
fading
Sharing why he could not produce for businesses, Mr. Nguyen Van Dang, owner of a garment factory in Tan Binh market area (Tan Binh district, Ho Chi Minh City) said that he had gone to China to buy a few pairs to try making them himself, but could not make them at the price the customer wanted, so he had to cancel the order.
According to Mr. Dang, Chinese sports shoes and canvas shoes are sold in Vietnamese currency for only 100,000 - 300,000 VND/pair depending on the type, while the cost of production, no matter how hard we try, still exceeds their selling price. Therefore, it is understandable that many Chinese garments, leather shoes of the same type are 30 - 35% cheaper than Vietnamese products.
"The source of raw materials and machinery depends entirely on China, so garment processing and self-production units are facing fierce price competition. If I quote a "survival" price, I won't get customers, and if I quote a price to attract customers, I won't make any profit, so I had to close the factory," said Mr. Dang.
Similarly, the area around Ton Dan Street (District 4) was previously famous for many garment factories and retail stores selling shoes and clothes, but according to records in recent years, this area has gradually become deserted and many have now closed.
According to Ms. Ngo Thu Linh, owner of a shoe factory here, many areas in Ton Dan used to be long-standing shoe manufacturing villages, with alleys having 30-40 households working at peak times, with wholesalers and retailers rushing to get goods, but now business is so slow that they have gradually stopped, and the number of households still working can be counted on the fingers.
"Chinese goods sold online and offline are everywhere, all kinds are available, you can get a pair for a few tens of thousands, and new designs are constantly being released. Meanwhile, we mainly do handmade products with higher prices and basic designs. This reality forces us to abandon our traditional profession," Ms. Linh sighed.
The streets around Tan Binh market (Tan Binh district) used to be a bustling place for shoe production and processing, especially clothing, with a constant flow of wholesale and retail customers. However, this time of year is much quieter.
According to Ms. Dang Thi Nga, owner of a facility here, processing facilities usually sew for companies, but now that businesses cannot sell their products, they no longer order. Sewing for customers is even worse because both wholesale and retail are unsold.
"Sewing buttons, attaching zippers, sewing details to complete clothes... in general, there's a lot of work to do. Processing is almost like taking money for labor, each product only makes from a few hundred to a few thousand dong, but now there's nothing to do even if you want to," said Ms. Nga.
Speaking with Tuoi Tre on November 22, a representative of VT Beads Company (Tan Phu) said that now they only make ironed beads to preserve their profession, while sewing, beading, etc. are stories of the past.
"Before, big shoe companies placed orders continuously, but for the past 3 years, demand has decreased sharply, so I stopped. Now it's hard to sell, so companies are gradually reducing production. When they need to, they import finished products from China to sell right away."
Having to accept the rules of competition, some retailers wonder if Chinese goods pay taxes, while they are sure that many products violate regulations by imitating brand labels and are therefore easy to sell. Some tailors have switched to quick tailoring for customers, but they also hope that the market will compete fairly.
Learning from China is not easy
Having more than 20 years of experience in the business of producing clothes and leather shoes, Mr. Dinh Van Hung, owner of Dinh Dao production household (Thu Duc City), said that every year he attends dozens of fairs in Ho Chi Minh City and other provinces to sell leather shoes and sandals with a common price of 350,000 - 2 million VND/pair, but the efficiency is quite low.
"Nowadays, when going to fairs, customers mainly look for pairs for a few tens of thousands, or at most 150,000 - 200,000. Even though there are promotions, customers still ignore them. There was a 3-day fair but I sold only 4 pairs. The profit was not enough to pay the employees," Mr. Hung recalled.
Talk to Tuoi Tre , Mr. Nguyen Van Khanh - Vice President of the Ho Chi Minh City Leather and Footwear Association - said that cheap goods at many fairs are often Chinese goods or almost all production stages and accessories come from this country. However, making cheap goods, following the design of Chinese goods is not easy.
Specifically, according to Mr. Khanh, China has raw materials at the source while we have to import them. The production scale is large, the machinery in this country is highly automated, and each hour can produce millions of pairs of shoes and sandals, helping the production cost to be almost the lowest in the world.
"Thanks to being able to sell large quantities of products, possibly thousands, even tens of thousands of pairs for one model, Chinese businesses are always confident in continuously investing in producing new molds, leading to their designs always being ahead. We are almost at a disadvantage in every way," Mr. Khanh stated.
Sharing the same view, Mr. Nguyen Huy Thanh, owner of a unit specializing in providing garment machinery and materials in Ho Chi Minh City, said that shoe leather accounts for about 40 - 45% of the cost, shoe soles account for about 20 - 25% of the production cost.
A set of 5-digit molds for making shoe soles costs tens of millions of dong, but if a model is made that the customer does not like or cannot sell, it is almost discarded. Meanwhile, Chinese businesses create new molds to produce new models. Thanks to competitive prices and good sales policies, these models are often easy to sell and make a profit early.
"Thanks to having a stable profit margin, they accept further discounts on their remaining inventory to push it to other countries, leading to them being able to sell at almost any price," Mr. Thanh explained.
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