Vietnam should tap domestic market for economic growth: insiders

Farmers harvest winged yam in Long An province’s Thuan Hoa district. (Photo: VNA)

Hanoi – Vietnam's domestic market still holds significant untapped potential, and stimulating domestic consumption is a vital strategy to drive economic growth in the near future, according to economic experts.

The government has implemented various policies to boost economic development, focusing on three key drivers, namely investment, consumption, and exports. Besides, developing the domestic market is a crucial pillar of this "three-horse carriage for growth".

Economist Vo Tri Thanh emphasised that regional economic development is a major asset for expanding the domestic market. Vietnam's domestic market underpins the retail sector, offering a diverse range of goods for local consumption. The proximity of suppliers reduces transportation costs, making it an attractive area for further investment. Thanh described it as a "gold mine for consumption," appealing to both domestic and foreign investors eager to expand their distribution networks.

In southern Vietnam, the Southeast region stands out as an economic powerhouse. With its large industrial hubs, major seaports, and densely populated areas, it holds immense potential for developing the domestic market. The region also represents a significant consumer base for agricultural products produced locally and nationwide.

Ho Chi Minh City, as Vietnam's largest distribution hub, boasts extensive infrastructure and bustling commercial activities, including wholesale markets supplying over 60% of the city's fresh produce, supermarket chains, and convenience stores. These factors enhance local distribution capacity and foster regional growth.

Nguyen Nguyen Phuong, Deputy Director of the municipal Department of Industry and Trade, highlighted the city’s success in attracting leading retail corporations to invest in supermarkets and distribution networks, particularly for agricultural products. For example, HCM City alone consumes around 10,000 pigs per day, along with large quantities of vegetables, fruits, rice, and other agricultural goods.

The Ministry of Industry and Trade has also reaffirmed its commitment to the "Vietnamese People prioritise Vietnamese goods" campaign. Minister Nguyen Hong Dien noted that the campaign has fostered a culture of Vietnamese consumption, encouraging local enterprises to produce high-quality, competitive goods for both domestic and export markets. This has led to significant improvements in product quality, technology, and branding, strengthening consumer trust in Vietnamese products.

The domestic market serves as a reliable foundation for Vietnamese enterprises, offering a multi-layered and segmented consumer base. It also acts as a safety net during export disruptions, providing critical support for export-oriented industries.

Dr. Nguyen Quoc Viet, Deputy Director of the Institute for Economic and Policy Research (VEPR), emphasised that domestic commerce and consumption will remain key drivers of economic growth in 2024. To sustain this momentum, industries and local governments must prioritise initiatives that stimulate trade and services within Vietnam, thereby bolstering local production and supporting businesses.

Recognising the importance of regional collaboration, Phuong highlighted Ho Chi Minh City's partnerships with neighbouring provinces like Dong Nai, Binh Duong, and Long An to facilitate the distribution of agricultural products. For instance, enterprises in Dong Nai excel in producing livestock, poultry, eggs, fruits, and vegetables.

Much of their production is professionally managed but often outsourced to larger brands. Rigourous quality control processes ensure safe food supplies for consumers and aid state management agencies in maintaining food safety standards, he added./.