Rural sales improve bottom line
HCM CITY (VNS) — More than three months of the year 2013 have passed, but the director of Minh Long Hung Company Ltd, which makes children’s clothes, still cannot believe what his business accomplished last year.
While many companies struggled to survive and some even closed production, Ly Thanh Sinh’s business recorded a growth rate of 300 per cent in 2012.
“Unbelievable,” said Sinh, adding that the success was due to the efforts of his staff and to the national programme “Bringing Vietnamese Goods to Rural Areas”, which holds trade fairs in the countryside.
Since the first day his company began participating in the fairs, more and more people nationwide have bought its products, he added.
While the economic downturn left many businesses bankrupt or suspending operations, Minh Long Hung and many other companies benefited from the rural-area programme, which began four years ago.
Sales have grown for both experienced veterans, like My Hao Chemical Cosmetics Joint-Stock Company and Nhon Hoa Scale Manufacturing Company Ltd, and young companies like Tam Lan Tea One-member Company Ltd.
After taking part in the fairs, the companies said they saw growth rates of at least 10-15 per cent, and many of them decided to open three to five shops in the provinces where the fairs were held.
Rural markets are now part of many companies’ business strategies, especially during tough economic times, according to company representatives.
“The rural areas are really an ideal market for Vietnamese companies,” said Vu Kim Hanh, chairwoman of the Association of Vietnamese High-Quality Goods Producers, which co-organises the fairs with the Business Studies and Assistance Centre.
“While it costs a lot of money to open a store in big cities and hire people to promote the products, it costs less in rural areas,” she added.
Many companies choose rural areas to introduce their products, and after they achieve success, they return to penetrate markets in big cities, according to Hanh.
Since the first fairs were held, at least 200 companies have displayed their goods. Fifty of the companies regularly take part in the fairs.
The national programme has received strong support from companies and provinces, as well as local residents, with 99 fairs held with total revenue of nearly VND95 billion (US$4.5 million) over a four-year period.
“The rural market is the foundation of the economy,” said Bui Dinh Thang, deputy director of the Nhon Hoa Scale Manufacturing Company Ltd. “It has helped us to develop our business, so we have targeted this market strongly.”
He added that the fairs had not only helped to increase sales but had offered free publicity for his products and enhanced the reputation of his company. —VNS