More than ever, consumers in Vietnam are looking for the ‘Made in Thailand’ label when purchasing consumer goods, and they're willing to pay a premium for these products, according to experts.
The high domestic demand for Thai products, they say, was the driving factor that resulted in Thai Central Group earlier this year acquiring a controlling interest in 33 Big C Vietnam supercentres (and 10 convenience stores) and later Thai BCJ Group’s purchase of 19 Metro Vietnam superstores.
The majority of Vietnamese consumers are willing to pay more for many key product categories, from baby food and appliances to electronics and apparel, as long as these goods were produced in Thailand, say the experts.
In every one of the key categories, they say, at least 50% of domestic consumers are willing to pay a premium of more than 10%.
More surprising, however, is the fact that the prices of Thai products are often lower than Vietnamese prices for similar size and quality products.
Vu Dieu Thuan, a customer at Metro Ha Dong, says after careful consideration she chose to buy 5kg of Thai rice at US$4.71 (VND105,000) over Dien Bien rice at US$4.93 (VND110,000) because it tastes better.
Even more interesting, experts say, many Vietnamese consumers report they regularly choose Thai made products over Vietnamese goods regardless of price on a regular and ongoing basis.
An assistant at the Metro in Ho Chi Minh City, points out that customers regularly purchase condensed milk from Thailand, which is US$.27 (VND6,000) less expensive per can than Vietnamese milk.
Only Thai clothing items are routinely more expensive than similar items made in Vietnam, says the assistant.
Experts opine that Thai products are positioned well in the domestic market. On the one hand they are less expensive than Japanese and Korean products of equivalent quality. On the other hand, they are of much better quality than Chinese products.
To top it all off, they are aesthetically more appealing than Vietnamese products say the experts, adding that domestic consumers on the whole perceive Thailand-made products are of higher quality than local products.
In fact, even when comparing Vietnamese and Thai products of similar price and quality, the majority of domestic consumers would still buy the Thailand-made items, they say.
Still other experts disagree vehemently and say not so fast.
Vu Vinh Phu, president of the Hanoi Supermarket Association, says Thai products are benefiting from better placement in stores like Big C and Metro.
In these supercentres, says Mr Phu, the placement of retail products on shelves favours Thai products over Vietnamese products. One commonly used phrase in retail is “eye level is buy level”.
Meaning that products positioned at eye level are likely to sell better. Stores like Big C and Metro are putting Thai products at eye level or just below, which is the best location and this explains why their sales are better.
The location of goods within an aisle is also important, says Mr Phu. Vietnamese goods are being placed at the start of an aisle and do not sell as well as Thai products placed in the centre of the aisle.
As well items placed at the end of aisles sell better because of higher visibility and Thai products are given these choice locations as well, says the Vietnam Association of Seafood Exporters and Producers (VASEP).
The battle between supercentres and their placement of Vietnamese produced products continues, says VASEP, adding they are urging Big C and Metro to give better visibility and placement to Made-in-Vietnam products.