The Tet market is flooded with foreign candies.

This is a challenge and opportunity for domestic enterprises to improve product quality.

If in the past domestic candies overwhelmed foreign candies, now the opposite is true, foreign candies flood the market.

According to our survey, the closer to Tet, the more American, French, German, Japanese, Thai, Malaysian, Indonesian candies appear on the market in Ho Chi Minh City.

Hundred flowers bloom

In some supermarkets such as Big C, Lotte Mart, Aeon Citimart… there are many new and eye-catching foreign confectionery models. Foreign confectionery is often displayed in good locations for customers to easily observe and choose. While Vietnamese products are often placed in locations that are more difficult for customers to observe.

There are also some domestic cake brands such as Bibica, Pham Nguyen, Huu Nghi... available on supermarket shelves. But the most popular are still foreign cakes with all kinds. For example, Malaysia has the Royal British brand, Germany has Lambertz, America has Peperidge Farm... The price of foreign cakes usually ranges from over 100,000 VND to over 500,000 VND/box depending on the type and weight.

Ms. Tran Hong Hanh, living in Tan Binh district, is looking to buy cakes to display and give as gifts at Co.opmart Rach Mieu Supermarket. “I usually choose items with beautiful designs and affordable prices, regardless of whether they are foreign or domestic. For example, when buying as gifts or to display on the altar, I choose a cake box that looks a bit luxurious. If domestic and foreign products have similar prices, I will choose foreign cakes because the designs look more eye-catching,” said Ms. Hanh.

The same goes for candy. Vietnamese candy only has a few familiar brands but they are not as unique and diverse as foreign products. Currently, Butter Toffes imported candy from Mexico costs 115,000 VND/600g box, Frutal Arcor candy in a luxurious tin box from Türkiye costs more than 130,000 VND/400g box.

Not only in supermarkets but also in markets and retail stores, there are many candies and chocolates from Germany, Belgium, Russia, America, Switzerland; chestnuts, prunes, raisins, and cherries from Germany and America.

Chinese goods, which were once all the rage, are now in decline. The owner of a candy stall at Binh Tay market said that recently customers no longer dare to eat Chinese candy due to concerns about its safety, and even those who buy it from the provinces rarely buy it.

Foreign confectionery is dominating the high-end segment.

May lose market share of 40,000 billion VND

According to the research results of the international market research company Business Monitor International (BMI), the revenue of the Vietnamese confectionery industry in 2013 reached 26,000 billion VND, in 2014 it was over 27,000 billion VND and is forecasted to reach about 40,000 billion VND by 2018. However, the market share of Vietnamese confectionery is gradually shrinking.

In fact, Vietnam has had a number of big names in the confectionery industry for a long time, such as Kinh Do, Bibica, Huu Nghi, Hai Ha, Hai Chau, Pham Nguyen... However, not long ago, Kinh Do officially sold 80% of its shares to the US Mondelez Group. Before that, Korea also held 44% of the shares of Bibica Confectionery Company...

Since then, the market balance has tilted towards foreign companies. This also explains why the market is flooded with foreign confectionery this Tet season.

In addition, recently a series of domestic supermarkets have fallen into the hands of powerful retail corporations from the US, Japan, Korea, etc. As a result, many types of foreign confectionery have also flocked to Vietnam. There are even opinions that with the current momentum of attack, domestic confectionery will soon "completely withdraw into secret operations" and not just be barely surviving as it is now.

Regarding this issue, Ms. Pham Thi Thanh Thao, Deputy General Director of Pham Nguyen Confectionery Joint Stock Company, said the company has determined that fierce competition with multinational corporations is inevitable.

“Imported confectionery from ASEAN countries is currently flooding the market, due to the relatively low import prices to Vietnam. During the past year, when we surveyed the market, we noticed that the number of imported goods increased many times,” Ms. Thao stated.

The Ho Chi Minh City Food and Foodstuff Association analyzed that currently, many raw materials, machinery, equipment, etc. for confectionery production are imported in part or in whole from foreign countries at high costs. This makes domestic confectionery lose its competitive advantage compared to foreign products.

If change, there is still room to live

According to a newly published report by market research company Kantar Worldpanel, as of November 2015, the confectionery market is still growing quite strongly. Typically, biscuits have grown 7% in terms of consumption value in urban areas and 6% in rural areas. Other products such as chocolate and cakes have achieved double-digit growth rates. This shows that the confectionery market still has a lot of room for development, especially in the rural market.

Commenting on this issue, Mr. Nguyen Huy Hoang, Business Development Director of market research company Kantar Worldpanel, said that foreign confectionery products with higher quality and price are mostly consumed well in urban areas, where income is relatively high. On the contrary, in rural areas or in the lower income segment, customers still give priority to Vietnamese products.

“Domestic and foreign confectionery both have their own advantages. If we know how to take advantage, promote and combine with appropriate strategies, everyone has the opportunity to gain the trust of Vietnamese customers,” Mr. Hoang commented.

According to Mr. Hoang, the influx of Thai, Japanese, and Korean confectionery into the domestic market is both a challenge and an opportunity for domestic businesses to systematically improve their brand image and enhance product quality.

The most important thing is to grasp the change in Vietnamese consumer trends towards newness, modernity, luxury and eye-catching. Because in addition to consumer needs, especially during holidays and Tet, customers also have the need to buy as gifts.

For example, the line of cakes given as gifts during Tet must be designed with delicate designs, bright colors and imbued with the traditional Tet atmosphere of the Vietnamese people. If these factors can be harmonized, there will still be opportunities for domestic confectionery.

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