The domestic market is poised to play an important role in getting the nation’s socio-economic development back on track following the easing of the novel coronavirus (COVID-19) pandemic, with local firms needing to pay close attention to developing trends due to the ongoing economic impact caused by the virus.

The country’s economy has been experiencing a difficult and challenging period since the first COVID-19 outbreak was detected. Indeed, the past three months have seen the majority of the production and business sectors encounter plenty of difficulties caused by the negative impact of the epidemic. This has resulted in both exports and domestic consumption enduring a slowdown with a number of items having an excess supply, leading to losses or an overall decrease in profits. As a result, a number of enterprises have been unable to survive and have either suspended operations or gone bankrupt.

According to figures released by the General Statistics Office, the first four months of the year saw the number of companies ceasing operations or facing bankruptcy higher than the rate of newly-established firms. Most notably, in domestic trade many stores were either forced to close, open at reduced hours for a long period of time, or completely halt operations. Due to the recent economic downturn sales at many supermarkets, shopping centres, and stores have suffered a sharp fall.

The latest report by the Ministry of Industry and Trade indicates that total retail sales of goods and social consumer services for the entire country over the past four months has dropped by 4.27% in comparison to last year’s figures. This represents an unprecedented decline in revenue within the domestic market, the most potential and important feature of the national economy.

Facing up to the consequences of the COVID-19 pandemic, Vu Vinh Phu, former Chairman of the Hanoi Supermarket Association, believes that in order to achieve greater global market penetration, it is essential for domestic businesses to place a major focus on developing the domestic market. If problems occur within the distribution system along with links between production and distribution, then companies will face serious hurdles, especially in the context of the ongoing spread of the COVID-19 globally.

Phu suggests that ministries, sectors, and localities should continue to improve the local business environment by making it more public and transparent, whilst simultaneously taking on monopolies occurring in sectors, the hoarding of goods, speculation, transfer pricing, and tax evasion.

“Enterprises need to continue building a strong domestic retail brand, bolster confidence of buyers and sellers in a long-term and sustainable manner. That is a firm foundation for the fast and effective development of each business organisation and individual in the market,” he added.

Vu Tien Loc, Chairman of Vietnam Chamber of Commerce and Industry (VCCI), stated that the market represents a vital issue for Vietnamese enterprises. In the context of the country’s deeper integration into the global economy following the signing and implementation of dozens of free trade agreements, this is seen as opportunities for local firms to gain a greater foothold within the global market.

As a means of enjoying a level playing field, with many opportunities coming alongside challenges and tough competitors, ways in which to secure a firm foothold within the domestic market looks to be an issue of major importance.

According to economic experts, the domestic market’s increasing demand over recent years and ahead in the future means its development will promote the production of Vietnamese goods in a strong and highly competitive fashion, therefore serving domestic consumption and exports. As a result, the domestic market will play an important role in the nation’s socio-economic development throughout 2020 and in subsequent years.