HA NOI (VNS)— Vietnamese small-and-medium-sized enterprises are in desperate need of a product overhaul to become more competitive in the domestic market.
|The last stage of unburnt brick production at the Khang Minh Brick Joint Stock Company in northern Ha Nam Province. The company is among few small-and-medium enterprises that keep investing and renovating their products to improve competitiveness. — VNA/VNS Photo Minh Dong
That is the view of Pham Thi Thu Hang, vice general secretary of the Viet Nam Chamber of Commerce and Industry (VCCI), who feels firms have reached a sink-or-swim crossroads.
The task has become more urgent due to local markets becoming dominated by large numbers of smuggled goods.
But according to a nationwide survey of over 2,500 private enterprises conducted last year by the Viet Nam Central Institute of Economic Management (CIEM), only 11 per cent of enterprises had diversified and renovated their products in the last two years.
This represents a decline from the last survey in 2009 when the corresponding figure was over 16 per cent.
Up to 40 per cent of the enterprises surveyed said they had been unable to improve or change their products in the last four years.
Hang said the declining rate of enterprises' product updates was alarming.
"If this trend continues, it's likely that many small-and-medium-sized enterprises (SMEs) will be forced out of the market," she said, noting that in the first nine months of this year, over 42,000 enterprises across the country stopped operations and dissolved.
The survey also found that in the last two years, the average rate of market exits among SMEs has been nearly ten per cent.
Two years ago, nearly 12 per cent of enterprises surveyed thought the economic crisis would create opportunities for enterprises. However, according to the survey of 2011, only 5.6 per cent believed the crisis had a positive impact on their operation.
CIEM Vice Director Vu Xuan Nguyet Hong said SMEs, which account for nearly 97 per cent of total enterprises in Viet Nam, were becoming the core of the country's socio-economic development.
In the last 15 years, CIEM has conducted seven surveys on SMEs, providing evidence of the changing Vietnamese business environment every two years. — VNS