HANOI: Large supermarkets in Vietnam like Lotte Mart, Co.op Mart and Big C have become a powerful channel to help export local products to overseas markets, especially South Korea, the EU and Japan.
This trend not only helps promote Vietnamese products to the world but also creates a stable outlet for domestic enterprises.
Although the value of shipment orders is still small and not commensurate with the potential of the Southeast Asian country’s goods, supermarkets are considered an effective export channel in long-term plans.
Tran Huu Tri, a representative of Hoang Hung Co. Ltd. in the south-central province of Binh Dinh, asserted that the firm’s furniture, such as desks, chairs, beds and cabinets, have been exported to European countries and Brazil in the last two years thanks to Big C’s distribution channels.
Around 100 containers of Hoang Hung goods are exported to European countries each month and the orders have increased three to five times compared to last year.
The strength of local firms while exporting products through large supermarket chains is that they can communicate with Vietnamese staff, which helps make information exchange and payment easier, not to mention that the supermarkets’ reputation also allows the goods to be shipped to big markets like Europe, the U.S. and South America.
Le Hong Thang, CEO of Duc Thanh Joint Stock Company, which specializes in wood products, said that the firm’s export sales in all markets reach around US$10 million each year.
Thirty percent of the exported goods have been bought by Korean consumers. In 2014, the firm shipped a large volume of wooden kitchen utensils to the East Asian country through Lotte Mart, a Korean company.
“Korean consumers prefer wooden kitchen utensils. In a recent meeting, our business partners said they are really interested in round chairs and clothing racks,” Thang said.
Duc Thanh wood products were initially sold in the Lotte Mart supermarket chain in Vietnam until the Korean firm recognized the Vietnamese brand and contacted the company.
All the goods are now transported directly to Lotte Mart in South Korea without going through any intermediate distributors. Another type of goods displayed in foreign supermarkets which attracts many customers is fruit and agricultural products.
Ho Quoc Nguyen, external relations director of Big C, said that such fruits as mangosteen, passion fruit, rambutan and dragon fruit draw particular interest from consumers. Big C is a French-owned supermarket brand.
“Most of the customers decided to buy the fruit right after they tried it. In addition, they also bought packaged items like tea bags, prawn crackers, cake, frozen fish fillets and frozen prawn,” Nguyen said after returning to Vietnam from an exhibition held in France.
According to retailers, the selection criteria on which they base orders of Vietnamese products include quality, price, customers’ preference and imported standards. Some even consider the reputation of the firm in Vietnam.
Kim Tae Ho, strategic director of Lotte Mart in Vietnam, said that the distribution chain chose another eight Vietnamese providers to export their products to South Korea after a meeting in June.
The order was worth from $500,000 to $1 million at first, but is expected to increase rapidly as there will be an exhibition of Vietnamese products in October at more than 100 Lotte Mart stores in South Korea.
Last year, Lotte Mart also organized an exhibition to support 24 Vietnamese firms to export their goods to South Korea, of which there were up to 101 types of products.
Big C’s export growth in the first six months of 2015 reached more than 20 percent over the same period last year, mainly in the sector of exterior decoration and handicraft products, seafood and shopping bags.
Those were exported to several countries including France, Brazil, Uruguay, Colombia, South Africa and the Philippines.
Big C is currently seeking more business partners to ship domestic products. The total revenue from rice sent to several African countries like Gabon, Cameroon, Senegal and the Congo is projected to top $800,000 by the end of this year.
According to Kim Tae Ho, several Vietnamese products which will see an increase in exports to South Korea include agricultural commodities such as pepper, cashew, coffee and wooden kitchen utensils.
The Lotte Mart supermarket chain does not buy Vietnamese products directly for export, but instead goes through a department which introduces the products and sends samples to it.
After checking the samples, the firm will directly contact the Vietnamese manufacturer if it accepts the goods’ quality and price. The products will later be exported directly to Lotte Mart in South Korea by that Vietnamese firm.
Some products which have been shipped regularly to the East Asian country include chairs, wooden hangers, frozen shrimp, rubber gloves, latex pillows and quilts, and frozen coconuts.
The list of exported products at Big C supermarkets reaches up to 700 items from more than 60 providers. Big C also supports domestic manufacturers in managing quality standards and promoting the shipment of agricultural and industrial commodities.
However, retailers have said that there are many difficulties in the export process, as the only strength of Vietnamese products is their cheap price, while quality is still limited, which leads to small orders.
