- Vietnam suggested building trust in the Food Chain
- Japanese Cargo Spaceship Delivers Food, Water, Batteries to ISS
- The 4th International Food Festival 2016 held in Hanoi
Dr Luu Duc Hai of the Ministry of Planning and Investment said that based on what has happened in 2016, it could be argued that next year would be even more challenging.
Dr Hai said more aggressive marketing strategies are needed by local companies as they try to carve out a niche in the retail market, adding that he believes the major battlegrounds would shift to online shopping.
Online shopping, said Dr Hai, offers a more cost-effective channel to reach select targeted consumer groups.
 |
The retail sector can also expect to see more intense price competition, in an industry that is already operating on thin gross profit margins.
It therefore becomes critically important for companies to not only channel the right market but effectively manage their resources, particularly in keeping inventory and product mix at optimum levels.
Excessive amounts of inventory have advantages and disadvantages for a business, which makes inventory control a delicate balancing act.
When a company holds a high level of inventory, it ties up business funds that could be used in other areas such as research and development or marketing. It also leads to higher warehousing costs and can lead to quality problems such as degradation and potential obsolescence.
However, not having enough of an item on hand can lead to lost sales from not having an item to fill a customer order and can also lead to customer dissatisfaction and customer loss as they go to a competitor to acquire the product.
Another consideration, said Dr Hai, is that small retailers can obtain a savings when purchasing many products in bulk quantities. Many suppliers give larger discounts to customers who order larger quantities.
Dr Doan Thi Thuy Duong of the Ministry of Planning and Investment in turn agreed that 2017 would be a particularly challenging year for domestic sellers in the country.
Dr Duong said consumer behaviour had changed in 2016, particularly with the advent of online shopping and the implementation of novel online-purchasing models throughout the country.
She noted that major challenges for local retailers would evolve around gaining a better understanding of consumer buying habits and realizing that they are changing at a dramatically fast pace.
The country’s retail markets are moving into the digital age and a whole new era of interactive online marketing is beginning to emerge. It just may be that the key to success of domestic sector companies for 2017 depends upon their ability to tap into this behaviour and cater to it better than their foreign sector counterparts.
Clinging to outdated sales and marketing strategies would most likely not be successful in 2017, she underscored.
Dr Hai noted that complex challenges for retailers lie ahead in the coming year as they struggle to develop differing strategies to target the diversity of target consumer groups.
Not only online shopping is having a significant impact on the retail market, added Dr Hai, but the demographics are changing as more young people, foreign business people and tourists impact the consumer mix.
The increased complexity of the consumer mix complicates marketing activities and it just may be that the most successful companies for 2017 are the ones that can best understand and adapt their company policies.
Lastly, Mr Hai commented that another emerging challenge facing domestic sector retailers is in coping with new payment methods as well as how they deliver products and services to the consumer.
