Price collusion in Vietnam
Me: Why was yesterday’s price 10K per kilo but today’s 8K?
Mango guy: Mango was cheaper this morning at the wholesale market
Me: There are over 20 mango carts here on the street. Surely you all don’t go to the same market.
Him: No we don’t
Me: How do you make sure the guy up the street isn’t selling the mangos cheaper?
Him: We call each other
Me: WHAT?
Him (smiling gleefully and poking me in the stomach): Yup. We have each other’s number and we change the price in sync!
Me: 
This is par for the course in Vietnam.
Everywhere you look there are vendors who cluster together. They have exactly the same products and exactly the same prices. It’s obvious they collude.
This strategy can work to eke out a modest profit. Unfortunately, though, it discourages innovation and limits growth.
It’s why you rarely see Vietnamese companies trying to think of new ways to add value to customers.
Chris F Harvey
February 18, 2013 at 7:20 am
[...] a blog where he posts insightful observations of life in Vietnam. Recently I read his post “Price Collusion in Vietnam.” It’s a great little story that shows clearly why so few Vietnamese companies or [...]
Why Vietnamese Rarely Innovate - Chris Forrest Harvey
February 18, 2013 at 7:51 am