Foreign brands’ rapid expansion awakens Vietnamese plastics producers

The plastics export turnover is just equal to 1/3 of the material import turnover in 2011, estimated at 4 billion dollars.

 

When Lock&Lock penetrates the market

Engrossed with making plastic bags, packing products and industrial plastics, Vietnamese big plastic manufacturers, namely Dai Dong Tien, Duy Tan and Ngoc Nghia could not imagine that the South Korean Lock&Lock could expand so rapidly in the domestic market.

It has just opened the 19th shop in Vietnam, the biggest one in HCM City which covers an area of 500 square meters at Vincom Eden shopping mall in district 1.

Lock&Lock, which introduces its products as friendly and safe to human health, has rapidly conquered the heart of the Vietnamese consumers. It has launched “green” products, including the food preservation boxes which allow keeping food fresh for a long time, preventing the escape of vitamins and nutrients.

Lock&Lock has been expanding so rapidly that its products have been available at supermarkets, shopping malls and all possible channels.

Not only Lock&Lock, more and more high grade household plastics brands have appeared on the domestic market, namely Biokips of Komax Vietnam, BioZone of HomeTech and Incense. In general, foreign brand products are tens of times more expensive than the domestically made products of the same kinds.

At first, Lock&Lock set up its factory in Vietnam just to make products for exporting to other markets. However, later, realizing the high demand in Vietnam, the South Korean plastics manufacturer has decided to both set up the factory and develop its distribution network in the country.

It spent 60 million dollars to build the factory in the Nhon Trach 5 Industrial Zone, and in early 2011, it spent another 75 million dollars to build the heat resistant glass factory in My Xuan A2 Industrial Zone in Ba Ria – Vung Tau province.

Vietnam is a vast market

The recent surveys by Fredonia Group, an US market survey firm showed that the demand for food preservation boxes in the world in 2011-2013 would increase by 3.8 percent per annum, expected to reach 124 billion dollars by 2013, thanks to the food productivity increase in the globe and the consumers’ tendency of choosing packaged products.

Meanwhile, Vietnam only has a few enterprises that make high end household products.

According to the Ministry of Industry and Trade, there are some 1200 plastics enterprises. Most of them focus on making plastic packs, accounting for 39 percent of the market share. The figures are 21 percent for construction plastics, 19 percent for technical plastics and 21 percent for household plastics.

Food preservation boxes are just a small market segment, which, therefore, has not been paid high attention by domestic manufacturers so far.

And only when seeing Lock&Lock expanding its business in the domestic market, did the domestic manufacturers recognize that they have missed a very potential market segment.

It seems that Vietnamese plastics manufacturers have been satisfied with their positions now in the market. Over the last five years, Vietnam made products have been dominating the home market after Chinese products were dislodged from Vietnam. Consumers nowadays turn their backs to Chinese plastics after hearing the rapid fire news about the toxic products, harming people’s health.

Duong Thi Quynh Trang, Public Relation Director of Big C distribution chain said 85 percent of plastics available at the retail chain are made in Vietnam. Especially, Vietnamese products dominate some market segments. Dai Dong Tien and Duy Tan brand products, for example, are dominating the popular household plastics market.

DNSG