Accelerate the pace of economic recovery (*): Boost exports and consumption.

According to experts and businesses, the driving force behind economic growth through exports and domestic consumption is becoming even more evident as indicators of export and retail growth have improved and are showing a strong upward trend in the final months of the year.

Exports show renewed optimism.

According to the Ministry of Industry and Trade , import and export activities have maintained positive growth for the past four consecutive months (May, June, July, and August). Mr. Ta Hoang Linh, Director of the European and American Market Department (Ministry of Industry and Trade), stated that although the most important export markets for Vietnamese textiles, footwear, and wood products – the US and EU – experienced significant declines in the first eight months of 2023, Vietnam remains the world's second largest exporter of footwear, the third largest exporter of textiles, and the fifth largest exporter of wood and wood products.

Vietnamese fashion , furniture, and household goods still possess many competitive advantages in terms of product quality, technical expertise, and the ability to meet stringent labor and environmental requirements.

Increased year-end shopping demand and stimulus measures will help boost consumer spending. Photo: HOANG TRIEU

Mr. Pham Xuan Hong, Chairman of the Board of Directors of Saigon 3 Garment Company and Chairman of the Ho Chi Minh City Textile, Garment and Embroidery Association, announced the good news that Vietnamese textile and garment businesses are receiving export orders again as markets begin to experience year-end shopping demand. This is an impetus for businesses to focus on production and fulfill year-end orders.

To secure more orders, businesses need to intensify product promotion and marketing in new markets, improve product quality in familiar markets, and meet green production requirements specific to each market and partner. To achieve this, businesses need to actively promote the transition to green production while simultaneously monitoring consumer demand and market recovery to invest in producing goods at competitive prices.

In the footwear sector, the Vietnam Leather, Footwear and Handbag Association (LEFASO) forecasts that exports will recover in the fourth quarter, but overall for the year are still expected to decrease by about 7.5% compared to the previous year.

"The difficult situation will continue until the first quarter of 2024. However, the market has shown many positive signs as inventory levels in markets where Vietnam has a strong export advantage have decreased. For example, the inventory rate of leather and footwear in the US decreased from 20% in June to 10% in August, and it is likely to reach 0% by the end of the year," - Mr. Diep Thanh Kiet, Vice Chairman of LEFASO, cited as an example.

Regarding the agricultural, forestry, and fisheries sector, Ms. Le Thi Hoai Thuong, Deputy Director of Vietpepper Co., Ltd. (Ho Chi Minh City), said that exports recovered from mid-August as EU and US importers prepared for the year-end holiday season.

Notably, many customers who previously purchased raw materials for packaging are now ordering finished products from the company for direct placement on store shelves due to high labor costs in the EU and the US. As a result, in addition to Vietpepper-branded products, the company also produces a significant amount of processed goods, helping it increase exports by approximately 10%-15%.

Meanwhile, Mr. Nguyen Van Thu, Chairman of the Board of Directors of GC Food Joint Stock Company (Dong Nai), reported that exports have recovered significantly since the third quarter. This has helped the company's exports in the first nine months of the year increase by 25% in volume and 20% in value compared to the same period last year. "To achieve the year-end target of 20%-25% growth compared to last year, the company is striving to retain existing customers and explore new markets such as the Middle East, North Africa, and Eastern Europe," Mr. Thu stated.

One positive piece of information is that Vietnamese agricultural products and food have many advantages, which is why importers trust them and place orders.

"Previously, when buying agricultural products and food, customers often chose Thailand, but now Vietnam is sought after more because it has many large-scale food production factories that meet high international standards. Furthermore, thanks to the free trade agreements that Vietnam has signed, our products are more competitively priced," Mr. Thu analyzed.

Mr. Tran Anh Khoa, General Director of Anh Khoa Co., Ltd. (Ca Mau), a company specializing in shrimp exports, also confirmed that while there are many orders, the shortage of raw materials prevents businesses from fully taking advantage of the opportunities. The reason is that interest rates have remained high recently, so businesses lack the capital to stockpile raw materials; they mainly only organize procurement and production after receiving a contract.

Busy preparing for the year-end market.

Regarding domestic consumption, businesses have already begun production and sales to serve the market in the last months of the year and the Lunar New Year. Mr. Le Anh, Director of Le Gia Food and Trade Service Company Limited, said that the business results for the whole year depend on the fourth quarter, so they are putting all their efforts into preparing for the biggest sales season of the year. The company's goal this year is to achieve sales equivalent to last year, but with more thorough preparation.

To help consumers save money while shopping, the company is launching many large-sized products and many products in the mid-range segment. In particular, the company is also allocating a large budget to collaborate with retail systems to launch attractive promotional programs to stimulate demand.

In addition, Le Gia has launched several new ready-to-eat, convenient products to cater to increasingly busy consumers. Thanks to this, despite a general market downturn, items such as braised pork belly, dried shrimp floss, ready-to-eat stewed meat, and stewed mackerel continue to experience good growth. The company is also launching new products such as complete seasoning sauces for braised fish and meat, stir-fried shrimp paste, and kimchi shrimp paste to explore the market.

According to Mr. Nguyen Manh Tan, Marketing Director of Haravan (a company providing e-commerce and retail solutions), overall e-commerce retail sales will experience very strong growth at the end of this year, exceeding the general market. This is because people in their 30s and 40s, who manage their family finances and make purchasing decisions, are accustomed to online shopping, and they are busy with work, leaving them no time for traditional Tet (Lunar New Year) shopping.

In addition, e-commerce platforms are increasing promotional programs, offering free shipping, etc., making prices very competitive. "However, businesses need to prepare sales strategies for peak periods and cooperate with suitable livestreamers to boost sales," Mr. Tan noted.

In Ho Chi Minh City, forecasts indicate that demand for goods and services will increase from now until the end of the year, while gasoline and raw material prices show no signs of cooling down, making price increases almost inevitable. City departments, agencies, and businesses have meticulously prepared plans to intervene when necessary.

Mr. Nguyen Nguyen Phuong, Deputy Director of the Ho Chi Minh City Department of Industry and Trade, said that in order to build market confidence for both consumers and businesses, the city has issued directives and the Department of Industry and Trade is focusing maximum effort on the second concentrated promotional campaign of 2023 at the end of the year.

The Department of Industry and Trade also makes the most of occasions such as Black Friday, Christmas, New Year's Day, and Lunar New Year to launch promotional programs, announcing them early with full information to encourage businesses to participate. "When businesses have confidence and a concrete plan, they will produce, stockpile, and supply adequately. On the other hand, with good preparation, businesses will calculate stable and reasonable selling prices, so there's no need to worry about sudden price increases," Mr. Phuong stated.

Following the news that the Government has instructed the Ministry of Finance to review and submit to the National Assembly a proposal to extend the 2% VAT reduction by another 6 months, i.e., until mid-2024 (instead of December 31, 2023), manufacturing, trading, and distribution businesses are all delighted.

"VAT is included in the price; a 2% reduction in VAT will help lower the prices of goods and services, stimulate consumer spending, and help businesses sell more, especially during the peak shopping season at the end of the year," said Ms. Ly Kim Chi, President of the Ho Chi Minh City Food and Beverage Association.

Focus on the quality of export goods.

At a press conference on the afternoon of October 10th, Mr. Pham Van Cong, Chairman of the Vietnam Cashew Association (Vinacas), stated that based on current export results and orders, the cashew industry is certain to achieve its export target of 3.2 billion USD this year. "However, businesses need to strengthen quality control and food safety to maintain the reputation of Vietnamese brands. The association has received warnings from major buyers about the declining quality of Vietnamese cashews," Mr. Cong informed.

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