Sales are falling across the board despite a desperate bid from both distributors and manufacturers to launch numerous promotions and discount programs to woo customers.
Poor sales despite promotion race
A logistics division director of an electronics importer from Japan complained to the Daily that electronics producers have had to join hands with retailers to launch promotions constantly in an effort to attract buyers.
Despite this, they have seen no improvements as expected as the sales volume is not enough for them to cover input costs.
“We all acknowledge the impossibility of luring clients right now but we have no other choice but to continue launching promotions and that is frustrating,” he stressed.
According to the director, due to limited resources of marketing expenses in the backdrop of financial constraints, electronics producers are shifting to cooperation with qualified distributors instead of accepting any partners like before.
As for electronics shopping centers, most refused to disclose information on the current purchasing power but they all shared the view that the market is in difficulties.
This is the reason why traders are making full use of all holidays, not just National Day on April 30 and International Labor Day on May 1, to initiate promotions constantly with attractive prices applicable for several days.
Tran Thach Quang, in charge of marketing of Vietnam Fan Joint Stock Company (Asia Vina), said the electronics market and centers now have to accept break-even-point sales and many of them are even cutting the prices of low-value products to below input costs to stimulate consumption.
All this has adversely affected the business activities of outlets of Quang’s company.
No light at the end of the tunnel
A staff member responsible for sales at a domestic electronics producer told the Daily that the market is experiencing its toughest ever period now which many people think has been was over.
For instance, the staff members at one electronics center said that from last year to earlier this year they still ordered products from producers steadily regardless of the stagnant consumption then.
But the firm now has seen no demands for its new products while its sales volume has tumbled by over 20%.
Similarly, the logistics director of the aforesaid company also complained that the business situation of his enterprises is extremely dreary, with no signs of recovery for the foreseeable future.
The point is that there are no wholesale customers who are project owners given public investment cuts, while end-users are only present as window shoppers, he asserted.
“When visiting a large electronics shopping center in District 1 last weekend, I noticed that customers were just there to have a look at products instead of buying them.
The reason is people consider going to shopping centers as a way to relax, not to shop for goods like before,” he explained.
He believed that the market is increasingly tough because consumers are sticking to cutting expenses, adding that this is inevitable as local residents are most vulnerable to the negative outcomes of the ongoing economic slowdown.
The fact that consumers are keeping a tight grip of their money has pushed electronics manufacturers and shopping centers into a tailspin.
Consequently, producers have decided to halt new product imports while distribution centers are holding inventories, especially high-value products like televisions or air conditioners.
“We are forced to postpone the plan to introduce new products in September since we understand that no products will be sold,” the logistics director said, adding that electronics centers, meanwhile, are keeping inventories given their commitments with producers.
Under the current climate, producers and distributors still pinned hopes on the recovery of the market towards the year-end although they understand that expectation is groundless.
Source: The Saigon Times