Apparel firms shy away from rural areas

04 May '10

2 min read

Textile, apparel and consumer product producers are not willing to explore and develop rural markets of Vietnam, despite the fact that a large percentage of the population lives in rural areas.

The reasons are not far to seek. There are about 60 million consumers living in rural areas, but the rural consumer market accounts for only 27 percent of the country's total retail sales, according to a recent survey.

The other big challenge is in setting up of well-oiled distribution networks, which can help goods reach the remotest corners of rural Vietnam, the investments for which are very high.

This is the main reason why, small and medium sized producers are shying away from reaching the rural consumers. The second major reason is the availability of cheap Chinese consumer and apparel goods.

Since the domestic companies did not concentrate on fanning out in to rural markets, cheap and sometimes low quality Chinese goods have flooded the rural as well as urban markets of Vietnam.

Mr Binh of Ha Noi Textile and Garment Co, a big textile firm justifies by saying that their products are focused at the middle and upper class consumers, due to which they have not targeted rural areas.

As per an expert, a long-term retail strategy needs to be developed to help these enterprises produce high quality, low-priced products and establish a comprehensive distribution network.

Fibre2fashion News Desk - India

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