Hanoi enterprises pin hopes on domestic market to fuel growth

Consumers shop at Hoang Cau Fuji Mart in Hanoi. (Photo: VNA)

Hanoi – Amid numerous challenges facing export, the domestic market has proved its attractiveness and important role, helping with Hanoi’s economic growth.

Since the last months of 2022, a number of manufacturers were unable to export their products due to a serious shortage of orders.

Hanoi recorded a slight year-on-year decrease of 1.3% in exports to 5.3 billion USD in the first four months of 2023. The revenue comprises 2.9 billion USD by the domestic sector, up 0.8%, and 2.4 billion USD by FDI-invested firms, down 3.8%, according to its Department of Industry and Trade.

Commodities that posted export declines during the period include apparel, vehicles and spare parts, timber and wood products, footwear, and leather products.

In April alone, the capital city earned nearly 1.52 billion USD from overseas shipments, rising 3.6% month on month and 2.3% year on year, statistics showed.

Tran Thi Phuong Lan, Acting Director of the Department of Industry and Trade, elaborated that the fall in the four-month exports was due to the downward trend since the last months of 2022. Though Hanoi witnessed a trade surplus in January and February, the export value of most groups of commodities dropped, with many staples’ turnover plummeting by double-digit rates from the same period last year.

Facing that context, many businesses in the capital city have been restructuring production and boosting supply for the domestic market as a source of support for them.

Le Hai Lieu, Chairman of the Board of Directors of the Duc Thanh Wood Processing JSC, said that his company is investing more in designing, marketing, and producing items for the domestic market.

Similarly, many other enterprises and sectors also pin high hopes on the domestic market for 2023.

General Director of the Garment 10 Corporation JSC Than Duc Viet held that with a population of 100 million, Vietnam is a potential market for textile and garment businesses.

Wholesale and retail have enjoyed good growth, Lan said, adding that total retail sales of goods and consumer service revenue in Hanoi reached some 184.4 trillion VND (over 7.8 billion USD) in the first quarter, up 12.6% from a year earlier. That includes 118.9 trillion VND in retail sales, accounting for 64.4% of the total and growing 12.2% year on year.

Thanks to domestic consumption stimulus programmes, retail sales and consumer service revenue have risen, helping enterprises address difficulties and boost production and business activities and contribute to the city's economic growth, the official added.

Economist Vu Vinh Phu perceived that from now to the end of 2023, domestic consumption must be viewed as an important impetus for Hanoi to reach this year’s target.

Echoing the view, economist Dinh Trong Thinh highlighted the considerable attractiveness of the domestic market with nearly 100 million people, noting that among the three growth pillars, export is still facing difficulties while investment needs more time to prove effective, so promoting consumption is now the most effective and least-costly measure.

To foster consumption and sustainably develop the domestic market, experts recommended authorised agencies push ahead with overhauling legal documents on the domestic market development and aligning them with the current situation so as to serve macro-economic governance and domestic trade.

It is also necessary to strongly and effectively implement the strategy for developing domestic trade by 2030, with a vision to 2045, along with the related programmes and plans. Authorities should assist businesses, especially small- and medium-sized enterprises, production establishments in craft villages, farming households, and cooperatives to promote trade, build and protect brands of domestic wholesale and retail chains, and further advertise specialties and typical products of regions across Vietnam, they added.

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