What does Hoa Phat mean by 'choosing to make things difficult to stimulate consumer demand'?

Self-production allows for control over quality and cost management.

According to Mr. Vu Son Dong, Deputy Director of Hoa Phat Home Appliances Company, the home appliance market in recent years has faced both difficulties in terms of purchasing power and intense competition. The growth of the refrigeration industry in general has slowed significantly in the last 5 years due to economic impacts, with consumers being more cautious before purchasing any product.

Meanwhile, the number of participating brands is increasing. Each year, the country consumes around two million air conditioners, but there are dozens of brands competing, from major international names to large-scale, high-capacity Chinese manufacturers who control the technology and therefore offer very low prices. The water purifier industry alone has over 400 brands, both domestic and imported. These are essential items that every family needs, so the competitive pressure is even greater.

For many years, the Vietnamese household goods market has been almost exclusively dominated by imported products due to their advantages of low prices, diverse designs, and abundant supply. However, that picture is changing. After numerous experiences with cheap imported goods that quickly deteriorated, Vietnamese consumers are increasingly concerned about the origin of production, durability, and after-sales service, and are willing to choose "made in Vietnam" products when they are of sufficient quality. This presents both an opportunity and a test for companies that are genuinely committed and invest in quality products.

Hoa Phat stimulates demand with its durable products, good designs, and reasonable prices - Photo 1.

Mr. Vu Son Dong affirmed that durable products, good designs, and reasonable prices are Hoa Phat's ways of competing and stimulating consumer demand. PHOTO: INDEPENDENT

" Hoa Phat has chosen a more challenging approach: direct manufacturing. This is our strength and our overarching philosophy, from our 25-year history in the refrigeration industry with the two brands Hoa Phat and Funiki, to our later entry into the home appliance sector. Manufacturing is a more costly and long-term path compared to importing goods for resale, but it is the only way to control quality and create durable, safe products suitable for use in Vietnam. Because we pursue this direction, Hoa Phat does not compete through price reductions or temporary promotions, but stimulates demand through durable products, good designs, reasonable prices, and long warranties. When customers are truly satisfied, they will trust and recommend our products to each other; that is the way to sustainably attract consumers," Mr. Vu Son Dong said, adding that in 2025, when the total air conditioner market output decreases by 11.5% compared to the previous year, Hoa Phat's air conditioner production will still increase by 35%; Refrigerator sales increased 2.1 times, according to GfK data. Hoa Phat's total revenue in the refrigeration sector in 2025 is projected to increase nearly fivefold compared to 2021, even as the market shows signs of slowing down. In the home appliance sector, Hoa Phat water purifiers are expected to rank 4th in sales volume among over 400 brands in 2025, closing the gap to the top 3. Funiki refrigerators lead the market share in the under-200-liter capacity segment.

Increase competitiveness, lower prices.

According to Mr. Vu Son Dong, the reason for this success and consumer trust in Vietnamese products stems from Hoa Phat's choice of a longer, more challenging path: direct production. This allows them to proactively manage their products and pricing. Unlike most brands that import goods for distribution, Hoa Phat manufactures its own products. In the refrigeration sector alone, Hoa Phat has 25 years of experience, associated with two brands: Hoa Phat and Funiki. The home appliance sector includes water purifiers, hot and cold water dispensers, air coolers, and kitchen equipment such as induction cookers and range hoods – products that meet the daily needs of the people.

Recognizing the long-term potential, Hoa Phat Home Appliances has invested meticulously and systematically. Currently, the company operates three production centers in Hung Yen , Ninh Binh, and Ho Chi Minh City, equipped with imported, highly automated production lines. These centers are strategically located near major transportation routes and seaports to reduce shipping costs, lower prices, and facilitate exports.

The Hung Yen factory, covering 8.5 hectares, has a production capacity of 200,000 products per year, specializing in refrigerators, freezers, and coolers. The Phu My factory complex, covering 10 hectares, has a production capacity of over 1.5 million products per year, with a total investment of over 80 million USD. They are also preparing to invest in an additional large-scale refrigerator factory for export, with a capital of 50 million USD.

In the home appliance sector, the factory in Hoa Mac Industrial Park, Duy Tien Ward, Ninh Binh Province, covers an area of 15 hectares, with a total investment of 1,000 billion VND, and has a stable production capacity of approximately 400,000 water purifiers and 300,000 single induction cookers per year.

"Self-production helps Hoa Phat maintain competitive pricing even when raw material prices fluctuate or global supply chains are disrupted, something that a company that only imports goods for resale would find difficult to do. This is the basis for Hoa Phat to offer reasonable prices to consumers when they have to consider their spending. With water purifiers, self-production also helps to offer prices that are accessible to many families, so that consumers can use quality products without paying high prices," Mr. Vu Son Dong affirmed.

According to Mr. Dong, thanks to self-production, Hoa Phat's product range is very wide, covering many segments and price points. Previously, water purifiers from other brands cost 8-9 million VND, but since Hoa Phat joined the market, the price has dropped to 5-6 million VND.

Hoa Phat stimulates demand with its durable products, good designs, and reasonable prices - Photo 2.

The seminar on "Unleashing Purchasing Power and Stimulating Consumer Demand" received significant attention from the public and businesses. PHOTO: INDEPENDENT

Moreover, the quality, design, and reputation of the Hoa Phat brand are rooted in durability. This is the "DNA" of Hoa Phat, from steel to electrical appliances. Each component undergoes rigorous testing: high-pressure testing, 100,000-cycle operation testing, testing at temperatures from -20 to 60 degrees Celsius, and stable operation testing across a wide voltage range of 165 to 240V. The pressure tank of the water purifier, which could rupture or explode if of poor quality, is tested at pressures up to 26 to 28 bar, many times the normal operating level, to ensure safety even if the pressure regulating valve malfunctions. The entire product is inspected before shipment, instead of being inspected by sample batches like many imported goods.

The quality control process at the factory includes many steps according to domestic and international standards, including the NSF standard of an independent organization recognized by the World Health Organization. Hoa Phat is self-sufficient in everything from control circuit boards, casings, functional filter cores to filter housings. The RO membrane, the component that determines water quality, is imported from Dupont Filmtec of the USA, and Hoa Phat is one of the two official distributors of Dupont RO membranes in Vietnam. The filtered water meets the direct drinking water standards of the Ministry of Health, and can be drunk directly from the tap without boiling. In terms of design, Hoa Phat products have significantly improved. Domestic products were once criticized for their appearance, but Hoa Phat water purifiers now feature exclusive designs by the company's R&D team, with tempered glass surfaces, and aesthetics comparable to foreign products.

Furthermore, Hoa Phat pursues a philosophy of good products, reasonable prices, and dedicated after-sales service, not chasing after the cheapest option. Domestically produced goods have an advantage that imported goods struggle to match. When a product breaks down, replacement parts are always readily available, repairs are quick and inexpensive, even for discontinued models. Imported goods, on the other hand, often require customers to buy new machines once they are discontinued. Hoa Phat's warranty policy is among the best on the market, such as a 36-month warranty for water purifiers, a 10-year warranty on large-capacity refrigerators and washing machines for Inverter motors, and a 3-year warranty on all large freezers and coolers.

"Refrigeration and home appliances are products used for many years, and consumers are most concerned about durability and long-term peace of mind. These factors, from production capacity, wide product range, quality to after-sales service, are the foundation for Hoa Phat to meet those concerns," said Mr. Vu Son Dong.

Encourage people to prioritize using domestically produced goods.

Based on the experience of a direct manufacturing unit, Mr. Vu Son Dong suggested stricter control over the disclosure of technical specifications and origin of goods. Secondly, he proposed supporting the development of domestic supporting industries. Currently, China offers a wide range of supporting industries, but Vietnam is still limited in this area. For example, in Vietnam, with water purifiers, some components such as filter membranes and pumps still have to be imported, not because we can't produce them, but because domestic production isn't large enough to manufacture them at a competitive cost. Developing supporting industries will help Vietnamese manufacturers increase the localization rate and reduce dependence on external suppliers.

At the same time, we encourage people to prioritize using domestic products, while supporting export manufacturers, possibly through tax incentives and policies to encourage the consumption of Made in Vietnam goods. Expanding exports helps us increase production scale, thereby lowering costs and enhancing the competitiveness of Vietnamese goods right in the domestic market, creating a beneficial cycle for the entire economy.

"Hoa Phat Group recognizes that to expand further, it must first establish a strong foothold in the domestic market. With a solid foundation from the Group's industrial production, Hoa Phat aims to master technology, produce high-quality refrigeration and household appliances, and dominate the market. We have been investing systematically in production and research, anticipating the shift of manufacturing from China to Vietnam, and gradually realizing our strategy of becoming a 'Midea of Vietnam,' bringing more products to domestic consumers," Mr. Vu Son Dong pledged.

Exported to 14 countries

Hoa Phat's quality has also been proven in the most demanding markets. Currently, Hoa Phat's products are exported to 14 countries, including the US, Japan, Taiwan, UAE, Pakistan, etc. Hoa Phat was the first domestic refrigeration manufacturer to introduce refrigerators to the US market, having exported over 100,000 refrigerators to a US brand and previously producing refrigerators and freezers to order for partners in the US and Europe.

Besides its own brand, Hoa Phat is embracing the trend of shifting production orders away from China to become an OEM partner for foreign brands, both leveraging factory capacity and integrating Vietnamese goods deeper into the global supply chain. When a product meets the standards of such demanding markets, domestic consumers can be completely confident in the quality of Vietnamese goods.

Source: https://thanhnien.vn/chon-cach-lam-kho-de-kich-cau-tieu-dung-cua-hoa-phat-la-gi-185260522100808745.htm