Tuesday, November 21 2017

VietNamNews

Confectionery giants face fierce Tết competition

Update: January, 24/2017 - 10:02

A confectionery aisle at the Aeon Supermarket in Ha Noi. — VNS Photo Doan Tung

HCM CITY Confectionery giants are struggling to compete for market share during the Tết (Lunar New Year) holiday, which begins next week.

Big companies like Kinh Đô Mondelez, Bibica, Topcake, Hải Hà, Hữu Nghị, and Biscafun have launched promotion to attract more customers. 

With the slogan “Seeing Kinh Đô Means Seeing Tết”, Kinh Đô Mondelez has introduced more than 40 confectionery products to serve the Tết market, priced at VNĐ40,000-200,000 (US$1.8-8.8) to serve a range of customers. 

Vũ Quốc Tuấn, deputy general marketing and communication director of Kinh Đô Mondelez, said Kinh Đô began running promotions for Tết since the end of last month.

Bibica has also introduced more than 1,800 tonnes of new confectionery products to the market, a rise of 10 per cent over the same period last year.

Most of Bibica’s confectionery products are available at more than 500 stores, supermarkets and 10,000 retail shops nationwide.

Trương Phú Chiến, general director of Bibica, said sales had doubled the target after nearly a month of introducing new products.

“Bibica focused on improving product quality and selling Tết products earlier. It has emphasised various segments of products to meet customer demand,” he said.      

Meanwhile, Topcake is ready for competition with two major segments, including the high-end segment priced at VNĐ100,000-150,000 and the low-end segment at VNĐ40,000-100,000.

Lâm Ngọc Thẩm, general director of Topcake, said Topcake early last year invested in advanced technology and improved production capacity.  

Other well-known brands such as Hải Hà, Hữu Nghị and Biscafun are also expected to increase confectionary output by 10 per cent to serve the holiday this year. 

Business Monitor International (BMI) reported that Việt Nam’s confectionery market is expected to generate VNĐ40 trillion (1.76 billion) in 2018.

BMI pointed to the high market potential in Việt Nam, where the average person consumes around two kilos of sweets a year, compared to the global average of 2.8 kilos.

The high growth has attracted many foreign businesses.

Foreign competition

The confectionery sector generates $1 billion every year in Việt Nam and most of the profits go to foreign firms.

Many Vietnamese economists worry that outsiders are taking over the market since local consumers appear to have lost their appetite for locally made cookies, cakes and candies.

Although accounting for more than 70 per cent of market share at big supermarkets like Big C, Lotte and Aeon, more and more foreign confectionary brands are present in Việt Nam.

Severe competition between local and foreign brands exists in minimarts, retail shops, traditional markets and industrial parks.

There are few major local names to compete with Tous Le Jours, Paris Baguette and Orion from South Korea, Break Talk from Singapore, Mars and Kraft Foods from the US, or Euro Cake from Thailand.

The foreign snack brands import all of their supplies instead of using Vietnamese ingredients.

A representative of Pat’a Chou, a French bakery brand with two outlets in HCM City, said they imported everything from wheat flour to milk powder from Europe.

A vendor at wholesale Bình Tây market in District 6 said it was very difficult to sell local confectionery products as they were not as eye-catching as foreign brands and the selection was quite poor.

“Most of my customers prefer foreign brands,” he said.

Lưu Thuỳ Vân, 42, a confectionery importer in HCM City, said customers seemed to prefer foreign confectionery products over local ones.

Imported sweets are becoming more diverse in the high-end segment with famous brands from Europe such as Denmark, France and the UK as well as in the mid-range segment with products made in Thailand and Malaysia.      

More and more foreign confectionery companies have invested in local businesses.

For example, the Kinh Đô group now belongs to Mondelez International Inc., the maker of Oreo cookies and Ritz crackers after a merger and acquisitions deal.

In addition, Orion Vina was invested in by the Orion group of South Korea.

To compete with foreign brands, industry insiders said the local confectionery businesses should reform its practices, from packaging to quality to price of products.

Fake and counterfeit products are another challenge faced by local businesses, which has become a serious issue during the Tết holiday.

Nguyễn Thành Phương, a representative of the HCM City Market Management Division, said counterfeit confectionery products had become a critical issue as it was becoming more difficult to identify counterfeit products.

Counterfeit products are produced not only locally but are also imported, requiring businesses to work more closely with agencies to fight such products, he said. — VNS   

 

 

 

 

 

 

 

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