Stimulating consumer demand: A solution to unlock market bottlenecks.

(Baonghean) - It can be said that never before have discount and promotional programs been as diverse, abundant, and flexible as they are today. While in previous years, promotional offers were only applied at specific times and to certain items to attract customers, nowadays, discounts and promotions occur frequently; they don't need to wait for holidays, Tet (Lunar New Year), grand openings, or seasonal changes or "off-peak" periods. Discounts and promotions take place year-round, continuously, and even for an entire year.

Customers shopping at Metro Supermarket (Vinh City).

Walking down any street in Vinh City, you'll be dazzled by the countless signs displayed in fashion stores advertising "Sale off 30-50%", "Complete Clearance Sale", "All items at a flat price of 100k - 150k"... This is most prevalent on Dang Thai Than and Nguyen Van Cu streets, where up to 80% of fashion stores offer these promotions. Similarly, along Minh Khai Street – considered a street specializing in digital devices and mobile phones – you'll find numerous discount and promotional signs.

For essential goods such as household items and necessities, which are dynamic and potential markets with high purchasing power like in Vinh City, promotions are also very active and widespread. Representatives of retail supermarkets said that recently, customers have minimized purchases of expensive items and prioritized essential household goods that fit their financial capabilities during these difficult times. Understanding this situation, supermarkets like Big C, Metro, and Intimex have continuously implemented attractive promotional programs and gifts to stimulate shopping, targeting these items. Ms. Bich Van, who came from Da Lat to visit relatives in Vinh City, exclaimed upon seeing these kinds of advertising signs: "What a huge discount! Is it really true? A 30% discount already seems like a lot, but a 50% discount? Where's the profit? Are the businesses really losing money, or is this just a price reduction to 'lure' customers? Or are these counterfeit or low-quality goods?" To answer this question, Mr. Le Anh Duc, owner of a first-level Donafoods distributor, explained: Discount promotions are perfectly normal. Businesses want to reduce inventory or release products nearing the end of their cycle. This type of promotion serves both to stimulate consumption and to clear out stock, before launching new products.

According to statistics from the Department of Industry and Trade, trade and service activities in the first six months of 2014 maintained growth and achieved the set targets and plans. Specifically, total retail sales of goods and revenue from consumer services reached an estimated 26,500 billion VND, an increase of 9.21% compared to the same period in 2013. In addition, the distribution network in the province has expanded, becoming more diverse and flexible, facilitating the circulation of goods and stabilizing market prices. The consumer price index (CPI) in the province increased by 3.43% in the first six months compared to the same period; out of 11 groups of goods included in the CPI calculation, 10 groups saw an increase, specifically: other goods and services increased by 8.91%; education increased by 8.63%; Housing, electricity, water, and fuel increased by 6.3%, while transportation increased by 4.91%... This is considered the lowest increase compared to the same period in previous years. One of the important reasons for the low CPI increase is that consumer demand is lower than last year, with people spending more cautiously, economically, efficiently, and intelligently. In addition, consumers are no longer afraid of inflation, so they are not buying goods to stockpile. However, the sharp decrease in CPI is also an optimistic sign for the goal of stabilizing and controlling inflation this year. On the other hand, the decrease in CPI provides a basis for banks to continue lowering lending interest rates, helping businesses reduce input costs, lower production costs, and thus stimulate consumer demand.

Regarding the overall business situation, Ms. Tran Thi My Ha, Head of the Trade Management Department - Department of Industry and Trade, stated: “The stable goods market is a positive sign, showing that trade and service activities in the province are being strictly controlled. In the first six months of the year, the department approved 20 lottery-based promotional programs with prizes worth over 1,212 million VND; received over 2,500 notifications of promotional activities with prizes worth over 20 billion VND… Promotions are one of the effective ways to stimulate demand for goods and services. Proper promotions benefit both sellers and buyers. However, due to the always diverse and vibrant market while management and control are still limited, many businesses take advantage of promotions to mix in counterfeit, fake, and substandard goods… affecting the rights of consumers and the interests of legitimate businesses. Therefore, in parallel with receiving registration procedures and notifications of promotions Regarding trade, the Department of Industry and Trade has directed the Market Management Sub-department to inspect the compliance with legal regulations on promotional activities of businesses in the province to promptly handle and correct units that intentionally violate the content of their registered and notified promotions at the competent authorities. Therefore, promotional activities in our province in the past period have mostly complied with the regulations of the Commercial Law and related regulations. Most promotional programs organized in the province have involved cooperation with suppliers and distributors of products such as technology products; household goods; electrical and electronic goods; motorcycles; banking and telecommunications services, etc.

The objectives and effectiveness of promotional strategies vary. However, to some extent, this is not only an opportunity for businesses but also a great opportunity for customers. And the widespread promotional campaigns currently being organized are also the most practical way for businesses to share profits with consumers… To further regulate promotional activities by businesses, contribute to market stability, and ensure consumer rights, state management agencies need to strengthen coordination in inspecting and supervising the implementation of promotions; and promptly and strictly handle violations. They should also strengthen the organization of activities to disseminate and publicize legal regulations in the field of promotions to relevant parties to raise awareness and understanding of the law when conducting promotional activities. At the same time, consumers should be encouraged to actively and proactively participate with state management agencies in monitoring and detecting violations in promotional activities.

Ngoc Anh