Vietnamese goods still have low sales to Wal-Mart

Vietnamese manufacturers and suppliers don’t expect high profits from selling goods via Wal-Mart, but they hope Wal-Mart can serve as the bridge that links them to the US and other choosy markets.


 
In 2014, Cuu Long An Giang’s products began entering Wal-Mart chain directly, not through intermediaries.

Vinamit’s dried fruit products have been available at Wal-Mart China for many years. Trung Nguyen Coffee has also been present at Wal-Mart Chile, Brazil, Mexico and China.

In 2008, Thuan Phuong Company sent staff to Wal-Mart’s office in China to negotiate the distribution of the company’s products at the retail chain. After the negotiation, Thuan Phuong became the first Vietnamese garment company selling products to the Wal-Mart chain.

At first, Thuan Phuong provided 200,000 products only in the first year, but now it provides 3-5 million products a year. It has built two more factories in Long An province to satisfy the high demand. Other Vietnamese garment companies have followed Thuan Phuong’s move and found positions in the Wal-Mart chain.

However, an analyst commented that while Vietnamese companies have successfully brought their products to Wal-Marts in the UK, China and Mexico, the volume of products in Wal-Mart in the US remains modest.

He also pointed out that though Vietnam’s products have entered Wal-Mart, they are mostly cheaper outsourced products and don’t bear Vietnamese brands.

A footwear company in Binh Duong province has two product lines available at Wal-Mart, but the products bear Nike and Wal-Mart brands. There are only the words ‘Made in Vietnam’ on the products which show their origin.

He said that to date, no Vietnamese garment and footwear company can export products under their own brands to Wal-Marts in the US.

The representative of a company belonging to Vinatex revealed that his company once supplied products to Wal-Mart, but it later stopped, because Wal-Mart only accepted very low prices, and the company could not make profit.

Dong Hung JSC, a big leather shoe manufacturer, is a partner of Wal-Mart. However, a senior executive of the company, said doing business with Wal-Mart doesn’t bring high profit, because the average export price is $4-5 per product only, which is close to production costs.

International media recently reported that Wal-Mart met with big difficulties because of the stiff competition from many of its rivals, including online retailers like Amazon. This has discouraged some big Wal-Mart suppliers.

However, Vietnamese still want to become Wal-Mart suppliers, because they hope Wal-Mart can serve as the bridge that links them to the US and other choosy markets.

Dong Hung, for example, still accepts outsourcing for Wal-Mart, though it must show samples to the partner to check before placing orders.

Kim Chi / vietnamnet