Many FDI enterprises and foreign groups, which have had offices in Vietnam for many years, are actively establishing their own distribution companies for their products.
After the effectiveness of the regulation which allows FDI enterprises to expand their right to import and distribute products, many enterprises take a further step by establishing companies specializing in distributing their own products.
With its two long-year distributors, namely Sao Nam Company and Silicon, Brother International Group of Japan, which majors in producing printers, office equipment and industrial sewing machines, is very content with its growth rate in Vietnam market during the past time. In the 2003 – 2008 period, its turnover increased by 3.5 times. The Group also set up a factory in Hai Duong province in 2007. This is the time when Brother International should maintain its sustainable position. However, the Group has a business branch in Ho Chi Minh City to replace its previous representative office, becoming one of the first 100 percent foreign-owned companies in the distribution area.
Mr Yoshihiro Nakayama, General Director of Brother International Vietnam, thinks that regardless of the global economic crisis’ influences, Vietnam is still a promising land for foreign investors. The establishment of a new company with an investment capital of US$2 million will help further polish the company’s brand name.
Earlier, from March 2009, Sojitz Asia Pte Ltd, a subsidiary company in Singapore of Sojitz Group (Japan) is licensed to establish a factory to import, export, wholesale and retail in Vietnam. Nissan and Sharp also announce their decision to set up new companies.
Mr Masatoshi Asao who is in charge of Canon Singapore office in Vietnam believes that FDI enterprises setting up new companies to boost distribution is a positive trend, showing that Vietnam is an appealing place for foreign investment and an attractive market for goods consumption with a stable growth rate. These are the reasons for foreign companies to consider Vietnam a potential market to expand their business.
But Mr Asao affirms that although Canon already has three factories in Vietnam, it still needs a domestic distributor to well perform business activities suited to domestic conditions in stead of setting up a company which majors in distribution. He believes that domestic distributors are well experienced and have sharp understanding of the market. They have a nationwide distribution system as well as a talented management team.
It can be said that conquering the domestic market of Vietnam via companies set up by themselves is being the first and foremost goal of foreign groups. Samsung does not miss this plan. However, according to Samsung Electronics Vietnam’s General Director, Mr Yoo Young Bok, the company still encounters difficulties in the immediate time. After putting the first mobile phone manufacturing factory in Vietnam into operation, Samsung also takes step to penetrate the domestic market besides its major goal of having products made by the factory exported.
In the short term, some foreign companies still import products into Vietnam despite their establishment of new distribution companies. However, according to some FDI enterprises which already set up their factories in Vietnam, direct usage of products produced by their factories to serve the domestic market is already included in their plan. Representative of Brother International says that if an agreement with Vietnamese government is reached, the company will start having its products made by its factory in Vietnam. This will help reduce cost, helping the company to avoid having to import or re-import products made in Vietnam through its office located in Singapore.
Luong Tuan
Vietnamese
