Not meeting expectations
The year 2020 was a year full of difficulties and challenges for most Vietnamese enterprises due to the impacts of the Covid-19 pandemic, prolonged natural disasters on a large scale, which caused a decline in the purchasing power. To catch up with the purchasing power in 2021, enterprises have prepared a large volume of goods to supply the Tet market - this "golden month" accounts for 30 percent of the total revenue of enterprises, which can explain why enterprises put so much efforts and large investment for it.
At the end of the Tet production and business season, some key enterprises said that the consumption of goods only reached about 70-80 percent of the plan, much lower than expected. Mr. Truong Chi Thien, Director of Vinh Thanh Dat Joint Stock Company, shared that the entire reserve of poultry eggs has not been used yet. Right after the Tet holiday, the company has had to implement several solutions, such as intensifying processing and running promotions, to completely clear the inventory.
During the Tet business season, the revenues of Vissan's products merely met the plan and failed to reach the expected increase of 5-10 percent as the volume of goods prepared. Noticeably, after the Lunar New Year, even though it is a supplier of essential food products, Vissan could not escape the situation in which the purchasing power declined by 15-20 percent in all product groups. This situation has never happened before. Mr. Phan Van Dung, Deputy CEO of Vissan, said that although the Government had controlled quite well the spread of Covid-19 in some provinces, it still hurt consumers' sentiment, causing purchasing power to slump after the Lunar New Year.
From the perspective of retailing, the Tet market ends late and starts business early. There are many reasons why shop owners extend their opening hours. The most important reason of which is trying to sell lots of goods to both avoid inventory and cover costs.
In many supermarkets and stores in the market stabilization program, the market resumed operations since the morning of the second day of the first month in the lunar calendar to ensure a smooth supply of goods to consumers. Many supermarkets of FDI enterprises and convenience stores even open continuously to welcome customers. Distributors also simultaneously launched big promotions by reducing the selling prices to stimulate consumer demand. The most obvious manifestation was at electronics supermarkets where many items, such as televisions and rice cookers, were sold at cost, or reduced selling prices by 30-40 percent. The multi-category supermarkets also embarked on the promotional race with hundreds of items with a discount from 5 percent to 49 percent. Meanwhile, wet markets were poorly patronized.
Deploying many solutions synchronously
In general assessment of the purchasing power in 2021, many enterprises said that they are nervous and anxious because the nature of the problem is because of the objective factors of the economy, especially in the situation that the pandemic develops complicatedly, while there is still no vaccine for mass vaccination.
Mr. Phan Van Dung, Deputy CEO of Vissan, said that the year 2021 will be more difficult and more challenging than the year 2020. It is likely that from now to the end of the third quarter of this year, the purchasing power will continue to drop by 15-20 percent. By the fourth quarter, if Vietnam has more vaccines for the people, which is considered the “passports”, paving the way for the development of trade and tourism, then the purchasing power will be better.
According to official data from the HCMC Department of Industry and Trade, the total retail sales of consumer goods and services in February (the peak month of the Tet business season) is estimated at more than VND110.67 trillion, up 4.7 percent over the same period last year. In the first two months of this year, the total retail sales of consumer goods and services are estimated at above VND228.91 trillion, an increase of 3.6 percent year-on-year. The retail sales of consumer goods alone are estimated at above VND144.17 trillion, accounting for 63 percent of the total retail sales of consumer goods and services in the city.