When customers turn to low-cost products

Fashion suppliers nowadays tend to offer products with low prices rather than high-end goods, in order to meet the demands of customers who are cutting back in the age of high inflation.

Nguyen Thi Loan, who lives in Tan Binh district, was eyeing some jewellery made of 10K gold and artificial diamonds for VND3.7mil. Loan’s relatives advised her to buy 18K gold, because she would be able to sell the higher-quality gold later for profit. However, Lan still decided to buy the 10K gold as it was cheaper.

At many jewellery shops, a lot of items made of less-than-18K gold have appeared, accounting for nearly 50% of the items displayed. Rings made of Italian gold or 18K gold have been replaced by 10-14K gold rings.

Lang Van Hai, Director of Saigon Gold and Silver Jewellery, said that more customers nowadays like 14K gold jewellery. These items have helped stores stay afloat.

In an effort to attract normal folks, Han Han Company recently marketed 40,000 clothing items, including shorts and shirts, at 50% off previous price levels. The low prices helped the company sell out all products in under a week.

Viet Thy Company is now trying to unload products at retail points with the discount rates of 20-60% before it launches new products onto the market, including more upper-middle-range products, and fewer luxury ones.

Dang Quynh Doan, Director of Viet Thy, said she has discovered that her clients prefer buying several product items at reasonable prices to buying one or a few luxury products.

“I have decided to raise the rate of mid-range goods to 45% of total products, and the rate of medium-to-high-class products to 35%, while the other 20% will be high-end products,” Doan said.

Analysts say that consumers began shifting from purchasing luxury products to lower-cost products in August this year. A lot of customers have begun purchasing China-made clothes, which are considered to have lower quality, or older styles. However, not all customers are satisfied by the materials and designs of these products. Therefore, domestic producers have been trying to attract clients with reasonable prices and good quality.

Doan said that producers can’t cut production costs by purchasing cheap and low-quality materials; they have to cut design and advertising expenses. (Saigon tiep thi)