HA NOI (VNS) — The home appliance industry should see promising growth amid more economic integration with the world, experts said at a conference in Ha Noi.
The conference held by the Ha Noi Stock Exchange (HNX), VietinBank Securities Company and Son Ha Sai Gon JSC forecast a bright picture of development for local home appliance production.
Vo Van Quyen, head of the domestic market department from the Ministry of Industry and Trade said home appliance consumption accounts for 9 per cent of total personal consumption worth US$12.5 billion to $13 billion.
Quyen said the growth came from the high number of population between 18 and 45 years old and higher income which led to changes in consumption. It was also from the interest in buying a local brand from both urban and rural areas in the country.
At the same time, Quyen said the possible Trans Pacific Partnership, the ASEAN Economic Community, the Free Trade Agreements with Japan, South Korea and other partners had opened up opportunities and challenges for the industry as they could enjoy tax incentives with many countries when exporting their products.
Phan The Rue, former Minister of Trade, said with a population of over 90 million and about 100 million people by 2020, the demand for home appliances would be huge.
Khong Phan Duc, General director of VietinBankSec, said Vietnamese spent 66 per cent of their total personal income on home expenses, much higher than 32 per cent spent by the Singaporeans. He said spending on home appliances ranked second after food and beverages.
As one of the leading manufacturers of metal tanks, containers and storage instruments, Son Ha Sai Gon JSC has been spreading its distribution to the rural areas of Viet Nam to attract local buyers.
It has also exported to the neighbouring countries of Laos and Cambodia and produced high-end products to export to the US and Canada.
Nguyen Xuan Phu, chairman of Sunhouse Group, a local manufacturer and distributor of cookware and electric home appliances in Viet Nam, thought that the home appliance industry which uses basic materials could benefit from the cheaper prices of materials in the next three years.
However, Phu also brought up some challenges from integration when the country faces strong competitors such as Thailand and South Korea who will also benefit from the zero per cent tax. He thought the risk of losing the local market was very large due to the consumer trends of buying foreign products.
The Sunhouse Chairman forecast Vietnamese businesses in the industry would face difficulty in the same period. He targeted foreign markets as potential markets, however, he said there were not many supporting policies for the export business.
Meanwhile, Nghiem Phu Hung, CEO of Son Ha Sai Gon JSC, said technology was still a shortcoming for many of the local businesses in the industry, as a result, most of the local products were not special or outstanding compared with others. Hung added while an improvement in technology was urgent, it was not easy work.
At the conference, former minister Rue said the dependence of imported materials from non-partnership countries would bring more challenges to the industry. — VNS