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Exports face difficulties, businesses strengthen the domestic market

Viet Thang Jeans Co., Ltd’s production activities

Plenty of room in the market of 100 million people

Textile and garment exports is one of the areas facing many difficulties, with a decrease in export orders in the US and Europe.

In this context, many businesses are more interested in the domestic market with 100 million people.

Mr. Pham Van Viet, General Director of Viet Thang Jeans Co., Ltd (VitaJean), Vice Chairman of Ho Chi Minh City Textile and Embroidery Association, said that since 2016, Viet Thang Jeans has had good products to serve customers in the domestic market.

However, most promote exports rather than focus on the domestic market. After the pandemic, especially in the third quarter of 2022 onwards, business orders gradually decreased due to consumer demand in major markets such as the EU and the US. There was a time when export orders of Viet Thang Jeans decreased by 80%. Faced with that situation, enterprises pay more attention to the domestic market. The consolidation of the domestic market has helped employees stabilize their jobs and business results in 2022 in the domestic market also more than doubled in the past year compared to the previous year. The fashion products of Viet Thang Jeans' accompanying brand products are currently in the top 3, competing with imported brands.

Duc Thanh Wood Processing Joint Stock Company is known as one of the leading wooden furniture exporters with an annual increase in turnover. In previous years, the domestic market was not the main market for enterprises. However, this enterprise has chosen to return to the domestic market when the export situation is challenging.

Ms Le Hai Lieu, Chairman of the Board of Directors of Duc Thanh Wood Processing Joint Stock Company, said that in the difficult period of export, domestic orders help the factory maintain production and keep workers.

At the same time, the domestic market supports businesses to offset revenue. If in previous years, the export proportion of Duc Thanh Wood often accounted for about 85-86%, sometimes even 88% of the total revenue at the company, the enterprise sets a goal of 2023 domestic share will increase by over 20%.

Salvation for small businesses

Ms Vu Kim Hanh, Chairman of the Vietnam High Quality Goods Association, said that the domestic market is the lifeline for businesses, whereby enterprises must rebuild their strategies and business plans, especially the supply chain. Therefore, in preparing to return to the export market, businesses will also have time to consolidate their products and good product quality is a "passport" for Vietnamese goods to dominate the market.

According to Mr. Pham Van Viet, it is forecast that large textile and garment export markets such as the EU and the US will likely recover from the third quarter of 2023 onwards as well as may prosper again from the beginning of 2024. Therefore, to overcome the current challenges, Vietnamese enterprises need to continue to strengthen and develop the domestic market. At the same time, they are looking for new export markets such as Australia, and Canada or niche markets with plenty of room such as Africa and Latin America.

As the leader of an enterprise in the agricultural sector with many typical products in Ho Chi Minh City, Mr. Lu Nguyen Xuan Vu, General Director of Xuan Nguyen Group Joint Stock Company, said that the development orientation of the enterprise is always determined to strengthen the company in the domestic market as a premise to expand exports.

In 2023, it is forecast that the world market will continue to face many challenges due to the decline in consumption. Xuan Nguyen continues to build, consolidate and promote the development of the domestic market. Xuan Nguyen's products have been present on the shelves of many supermarkets and selling points across the country.

Currently, Xuan Nguyen has established a distribution network of food products throughout the country with more than 16,000 agents and retail points nationwide, striving to have 20,000 agents in the next three years.

In addition to focusing on the domestic market, Xuan Nguyen continues to maintain and promote links with other enterprises in key export markets such as the US. At the same time, they expand export markets to "niche" markets in which the focus in 2023 will be Southeast Asian countries, said Mr. Lu Nguyen Xuan Vu.

According to the Ministry of Industry and Trade, in 2023, it is forecast that the economic situation will continue to face many difficulties. Enterprises need to accurately capture market signals to be able to maintain the traditional export market and at the same time expand to new markets, especially in Asia, West Asia, South Asia, Latin America and Africa, They can then adjust their business strategies and produce products in line with market signals.