Why do Vietnamese enterprises decide to have their products outsourced to China?In general, regular components are imported from China which can provide products at low prices. As for specific components which require high quality, Vietnamese enterprises have to use the products from Taiwan, Japan and South Korea.
I think that in the age of global integration, the origin of products is not the most important factor. The quality and the price are more important.
Apple, for example, also has its products outsourced to China. The country is now considered the factory of the world. Previously, Samsung also made its products in China, and it has just moved to Vietnam.
The key factor is that Vietnamese enterprises should take wise steps and they should know what they need and where they should import components from. It is like being a clever housewife, you knows how to choose the best food at the market.
It always happens that Vietnamese customers refuse to pay high prices for the products made in China. What would you say about that?
Enterprises should understand that no matter where they have their products outsourced to, they must have good designs and they must master the technologies.
We go to China to hire Chinese enterprises to work for us, and not everything provided by Chinese enterprises will be used by us.
However, if Vietnamese enterprises cannot make any components of products, and the only thing they have in the products is the brand name, will Vietnamese brands be able to become famous in the world market?
The story about Dell, a very famous brand in the US, is a typical example. The manufacturer does not have factories, or even depots. If necessary, it has others to do the design for it, has its productionoutsourced to others sand then sticks on its own label to sell.
Hard drives are made in Thailand, CPU by Intel, chips in Thailand, while computers are assembled in China. Who says the computers are not the products of Dell, a US brand?
I once told CMS and FPT Elead that the most important thing for them now is to design a model which can “win the hearts and minds” of customers with high quality and low prices. Acer buys CPU from Intel, Dell also buys CPU from Intel and so does HP. Why can’t Vietnamese CMS and FPT Elead do that?
It is now the age of knowledge-based economy. The companies, that can be good at choosing components and can launch the products which satisfy customers, will be the winners.
As you said, Vietnamese enterprises are now also outsourcing to China, like foreign enterprises. But why cannot Vietnamese brands become famous, whlie some of them have even disappeared from the market?
The business success depends on the management of enterprises. Many Vietnamese enterprises try to simply sell as many products as possible, while they do not pay much attention to developping high quality products.
As you may know, Nokia 1202 is dirt cheap, selling at 400,000 dong. However, it still defeats all other brands in the low-cost market segment. The product is very durable.
Then, Vietnamese enterprises, please don’t try to do 3Gs. Just focus on low-cost products priced at 300,000-400,000. If your products are durable, you will cement your firm position on the market. But if users have to throw your products away after one month of using, you will not survive.
In order to develop a brand, enterprises have to spend a lot of time and money. However, it seems that Vietnamese brands have not beenaround for a time long enough to conquer customers’ hearts. When you have a brand, you need to develop and protect it. You cannot just “live from hand to mouth” .
But what will happen if all phases of the production process rely on foreign producers?
I think that we need to change our viewpoint on the issue. The strategies on electronics and supporting industries development put forward by the Ministry of Post and Communication and Ministry of Industry and Trade prove to be infeasible. No one and no country in the world can make all components necessary for assembling the whole machine.
The big names like Sony and Panasonic only focus on research and design, or they only make very special products, while they have their products outsourced to the countries where the labour cost is cheap.
So, what should Vietnam do to develop Vietnamese brands in the world market in the globalization period?
I think that there are three ways to develop brands and build a base for future development of Vietnamese brands
First, we should invest in designing. And not say we cannot do that. Two Vietnamese engineers once won the first prize in the competition to design specialized IC in Japan.
Second, we need to develop supporting industries, but we should not try to do everything. We have to focus on specific products.
Third, Vietnam should join the global chain.
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