Why buy local?

May 11, 2016 | 06:12 pm PT
Hieu Ha Trung
I would rather have a drink at a local café than at a global coffee chain.

Many may still remember “You’ve got mail”, an American romantic comedy from 1998, starring Tom Hanks and Meg Ryan.

Kathleen Kelly (Meg Ryan) runs a small bookstore, which struggles to survive due to fierce competition from the rich Joe Fox’s (Tom Hanks) large chain store just across the street.

At the end of the film, the fate of Kathleen’s bookstore is not unveiled; however, I have seen small businesses which have been struggling like Kathleen everywhere I have been to, in Vietnam and many other countries.

Local small and medium-sized enterprises have to struggle painfully to compete with chain retail stores of foreign or domestic global corporations, which have an absolute advantage in capital, suppliers, distribution channels and are willing to bear losses for years to push small businesses into bankruptcy and capture the market. Victory is always in favor of the capitalist tycoons.

In the U.S., the year 2013 witnessed mergers and acquisitions of more than 23 percent of SMEs into large corporations, according to Dun and Bradstreet reports. "Businesses with fewer than 20 employees have only a 37 percent chance of surviving four years (of business) and only a nine percent chance of surviving 10 years. Restaurants only have a 20 percent chance of surviving two years.”

Within five years, (you can note this prediction and see if it is right), all independent electric retail stores or small mobile phone stores in Vietnam’s largest cities will most likely disappear, replaced by large retail chains of Pico, HC or Vinmart.

So if you were an owner of a small retail electric store, what would you do now?

I am not going to talk about the pains of SMEs.

Instead, I would like to argue why we, the consumers, should support independent local businesses. That is, why we should buy fish sauce of a domestic brand, handmade coconut oil, choose books from the small store of Kathleen rather than the big alternatives like Joe’s big bookstore chain.

1. The money that goes into your local community stays in the community

For every 100 dollars you pay a locally owned business, 68 dollars will stay and enrich your community, instead of large chains, according to Civic Economics – Andersonville Study of Retail Economics.

Local businesses directly purchase input materials and employ people locally. These businesses tend to buy services from other local businesses in the area, thus creating a sustainable and healthy business community.

For example, a fish sauce manufacturer in Phu Quoc will use all the input materials, from fish and salt to packaging and labeling, available locally. It will then promote, distribute and sell the fish sauce in your community, indirectly creating a local ecosystem of service providers for its own business. Therefore, locals in the region like you and your neighbors are those who benefit the most when you consume the local product.

Would you expect similar benefits from global corporations or large retail chains?

2. Local businesses are part of distinctive local culture

What would you think if in 20 years’ time, you look around Vietnam’s streets and find they are flooded with global brands like Starbucks, McDonald’s, Zara and 7-Eleven while local shops and products that symbolize your Hanoi and Vietnam are gone?

Local businesses add character to the current storm of mass production. Such character adds intrinsic value and diversity to the economy, especially in the food and beverage sectors.

Let’s thank the local businesses which give you 100 different tastes of ice cream to enjoy, instead of just several boring tastes of Vinamilk brands which can be easily found in any supermarket; and the taste of authentic Phu Quoc fish sauce, instead of artificially flavored bottled sauces. These businesses give you the taste of home.

Even when I travel, whether it is to Da Nang, Phu Quoc, Seoul or Paris, I always search for local businesses as they are the soul of a country’s economy and cultural identity.

3. You’re encouraging young people to start a business

Each cent you spend on local products or services is an encouragement to the young to change their lives and the image of their hometown and country. It gives them an opportunity to prove themselves against the big guys in the market.

With the power of a consumer, you can help support a healthy and fair competition - a playing- field without monopoly.

4. Learning to love in a different way

It is easy to fall in love with a handsome billionaire or a famous brand backed by a professional agency.

It is easy to say “I am a fan of Starbucks”, but not everyone is willing to say that you love a local coffee brand.

It is time we learn to love simple things in an honest way rather than chase after a handsome rich man or love something just because it is trendy. Anyone of us might do start-up one day, so giving local businesses a chance today is also giving yourself a chance tomorrow.

Hieu Ha Trung is overseas business director of VCCorp, a young traveler and works in start-up and internet business. He trusts in the good of human's instincts.

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