Supermarkets have started ordering businesses to develop products under their own brand, and companies and consumers are reaping the rewards.

Consumers shop at a supermarket

Nguyen Mai Ngoc, Director of the Hanoi-based An Thanh Production and Trading Co, Ltd, one of the enterprises making products for supermarkets, said the biggest benefit was optimising the capacity of machines, equipment and factories, without worrying about demand. This has encouraged the enterprises to scale up production, Ngoc said.

Deputy Director of the Ministry of Industry and Trade’s Domestic Market Department Le Viet Nga said the supermarkets provide their own brand products, making customers enjoy cheap goods and manufacturing companies have more orders.

Chairwoman of the Vietnam Retail Association Dinh Thi My Loan said most supermarket-branded products are low or medium-grade products so they mainly compete with small companies’ ones.

The competition has encouraged small-sized companies to innovate in their designs and diversify products as well as to improve product quality for attracting consumers, Loan said.

Deputy General Director of the Hanoi Trade Corporation (Hapro) Nguyen Tien Vuong was quoted by the Kinh te do thi (Economic and Urban Affairs) newspaper as saying that the development of supermarket-branded products is direct co-operation between manufacturers with retailers to cut out the middle man and give more options to consumers.

Hapro supermarkets sell own brand ham, sausage and wine made by Hapro member enterprises, he said. This helps enterprises develop their production capacity, protects them from competition and increases profits as they don't have to give discounts to suppliers.

These products have attracted the attention of consumers because the selling price is lower while the quality is similar with the same products.

Director of Ha Dong Co.opmart Nguyen Thi Kim Dung said the supermarket-branded products are cheap because supermarkets have distribution channels and don't spend much on advertisement.

The cheap prices allow consumers more options, while the retailers know the tastes, trends and spending levels of customers so they know the products that need to be invested in.

In Hanoi, most major supermarkets such as Vinmart, Co.opmart, Hapro and Big C sell many supermarket-branded products.

Co.opmart started offering products with its brand in 2007 and so far, it has introduced nearly 500 goods to its supermarket system, focusing on essential consumer goods from food to household appliances.

From December 2018, Saigon Co.op introduced its supermarket-branded products to serve customers, from popular to high-end.

In 2015, Vingroup invested in the agricultural sector with VinEco producing agricultural products according to VietGAP and Global GAP standards.

So far, VinEco has produced thousands of tonnes of clean agricultural products to sell at VinMart supermarkets and VinMart stores.

Big C sells some supermarket-branded products such as confectionery, writing paper and washing powder.

Meanwhile, since 2016, Lotte Mart supermarket system has started to provide supermarket-branded products as Choice L with more than 1,000 items ranging from household items, fashion and electronics to essential goods.-VNS/VNA