Applying advanced technology to improve productivity and competitive value for productsThe COVID-19 epidemic broke out and raged fiercely around the world, which was also the timewhen th
Supply of face masks
Applying advanced technology to improve productivity and competitive value for product
The COVID-19 epidemic broke out and raged fiercely around the world, which was also the time when the story of medical masks became a concern and an opportunity for many individuals and businesses to get rich.
With the advantages of effective anti-epidemic, the potential for mask production and export in Vietnam is currently enormous, experts say, Vietnam has many opportunities to become a
"factory" for mask production only at present and in the future to supply fastidious markets such as the US, Europe
Therefore, investing in a modern mask production line, and optimizing productivity and product quality is a must to be able to proactively source masks if business owners want to enter the export market of face masks—this item To quickly adapt to the new context, Vietnamese enterprises need to constantly innovate in technology and equipment and apply modern management systems, innovative tools, and advanced business models to quickly adapt to the new context to improve production and business efficiency.
Affirming that the application of technical improvement and application of advanced technology in production has improved productivity and competitive value for products, said Mr Le Duy Anh, General Director of Xuan Hoa Vietnam Joint Stock Company , the company has applied product quality management toolkits to the main production stages, so product quality has been improved In 2020, despite the impact of the COVID-19 epidemic, the company's export products still increased by 30%, and domestic consumption increased by 7%.
Number of masks produced in the market
With 50 businesses reporting to the Ministry of Industry and Trade, the mask production capacity in Vietnam has reached 8 million pieces per day, equating to around 200 million pieces per month Taking into account unreported businesses, the national output is expected to be significantly higher.
The raw materials for the production of masks are not too strict Previously, enterprises had to import antibacterial fabrics or chemicals to produce antibacterial fabrics But now some enterprises, such as Nam Dinh Silk Textile Company, can produce completely antibacterial fabrics by themselves entirely from domestic bio-materials Therefore, if there are markets and customers, the current mask production capacity can be further improved.
Source of mask production in Vietnam
In Quang Ngai, 4 garment factories of Vietnam Textile and Garment Group (Vinatex) are Vinatex Dung Quat, Vinatex Nghia Hanh, Vinatex Tu Nghia, and Vinatex Duc Pho; Thuyen Nguyen Garment Company, Hoa Tho Garment Joint Stock Company (Tinh Phong Industrial Park) have increased production capacity, with hundreds of thousands of quality masks for markets in provinces and cities in the country, especially in the locality translation method.
Vinatex Nghia Hanh Garment Factory (Dong Dinh Industrial Complex, Nghia Hanh District) currently has 430 workers, with 6 operating lines, producing high-class masks and ordinary masks On average, about 50,000 masks are supplied to the market every day.
Vinatex Dung Quat Garment Factory, with 12 sewing lines, and about 650 workers, produces about 100,000 masks of all kinds/ day Particularly, Vinatex Tu Nghia and Duc Pho garment factories are producing according to orders through the focal point of the Ministry of Industry and Trade.
The guarantee in the supply of masks
According to information provided by some distributors, people can buy masks at several locations, such as:
From February to April 2020, Aeon Vietnam Co., Ltd.'s five department stores and general supermarkets distributed over 1 million masks monthly, equating to more than 33,000 masks daily.
People can queue to buy at the Company's points of sale, each person can buy a maximum of 2 boxes, 30 pieces each.
In addition, Saigon Co.op supermarket system: Saigon Co.op regularly supplies 20,000 per day
At the same time, strengthen inspection at supermarkets, commercial centers, convenience stores, and retail stores.
To proactively serve customers, supermarkets have contacted many suppliers to place backup orders, ensuring continuous supply to the market at more stable prices.
Market demand for masks
Characteristics of the market on the consumer side
Before 0:00 on April 1, 2020 (the time when Vietnam implemented social distancing nationwide), the people's disease prevention mentality was pushed to a climax The image of many people rushing to buy medical supplies such as masks, hand sanitizer, physiological saline,etc to protect their families against the epidemic has become a familiar scene in pharmacies This was shown by a statistical chart produced by Statista and Rakuten in collaboration in the same year (Figure 2.1).
Figure 2 1 Frequency of wearing masks when going out due to coronavirus COVID-19 among Vietnamese people in 2020
Through the chart, we can see that in addition to stockpiling food (90.53%), and personal products (61.6%), the rate of people hoarding medical supplies (including masks) in the country The situation of the COVID-19 epidemic is not inferior to other consumer products (59.34%) (40,084,463 million people)
To effectively protect individuals, communities, and loved ones from the transmission of COVID-19 and other infectious diseases, face masks have emerged as a crucial solution Their efficacy has fueled the exponential growth of the mask market within the national landscape.
Consumer income
According to data from the General Statistics Office of Vietnam (GSO) in 2020, the average income of employees is 5.5 million VND, down 2.3% compared to 2019 In addition, as of December 2020, the whole country 32.1 million people aged 15 years and older were negatively affected by the COVID-19 epidemic, of which 69.2% had their income reduced, 39.9% had to reduce working hours, rotate left, and take time off from work 14% had to suspend or stop production and business activities The COVID-19 pandemic not only deprives workers of employment opportunities but also causes them to fall into underemployment, leading to reduced incomes
Income is an important criterion in deciding the purchasing power of consumers When the consumer's income changes, the demand for the goods changes.
Consumer trend
Amidst the ongoing COVID-19 pandemic, mask usage has emerged as a prevalent practice among consumers globally Statistics from a survey conducted by Ipsos and Statista reveal that Vietnamese citizens exhibit a significant rate of mask adoption (91%) in comparison to major powers such as China, the USA, and the UK This observation suggests that mask-wearing has become an ingrained habit for Vietnamese people within the "new normal" context.
Figure 2.2 Frequency of using masks due to the COVID-19 pandemic
Understanding consumer tastes and preferences is crucial for businesses producing goods, including masks To meet these desires, businesses have consistently developed and diversified their mask offerings, providing consumers with a wide range of styles and experiences.
Consumer expectations
In addition, another statistic from Ipsos through a survey of 29,000 people from 15 different countries around the world (including Vietnam) thinks about the use of masks from April 9,
2020, to December 12 April 2020 (Figure 2.3) has shown that Vietnam's recommended level of mask use in public places and even after the epidemic has ended is up to 88%.
Figure 2.3 Statistical chart of the perception of the use of masks by Ipsos
Thereby, we can see the sustainability and trust in the mask consumption habits of Vietnamese people even after the pandemic ends, which has made the demand for the mask market increase.
Consumption quantity
The significant increase in the number of people using masks leads to an increase in the demand for goods.
According to statistics from Statista in 2020 about the frequency of using masks when going out Vietnamese people (from 16 to 49 years old) (Figure 2.4), up to 56% of the Vietnamese population regularly use them Masks when going out, 33% of the population often use masks when going out However, during the period when the epidemic gradually became more unpredictable, there were still about 2% - 8% of the population using masks with a very low frequency Even 1% of people do not use masks when going out for various reasons.
Figure 2.4 Frequency of wearing face masks while staying outside due to coronavirus COVID-
The price of masks
In 2019
The price of masks in 2019 has not changed much when this is just a normal product, only fluctuating about 35,000-40,000 VND/box (50 pieces) for 4-layer type, 40-50 thousand VND/box (50 pieces) pcs) for class 5
For the price of more advanced masks like M3, the price ranges from 9,500-10,000 VND/piece.
In 2020
The price of masks began to fluctuate in the market as a series of videos about COVID-19 in China began to spread and people began to become aware of the potential danger of COVID-19, but The peak was when Vietnam there were the first 2 cases in January, this caused a sudden increase in the number of people buying masks while the supply remained unchanged, causing the market price of masks to increase dramatically as follows:
The price of masks continues to increase through the months of February and March, there are times when the price of 4-layer and 5-layer masks reaches 300,000-500,000 VND/box (50 pieces) According to an online statistic of 672 participants on Statista in February 2020 about two typical masks of the Vietnamese market (Figure 3.1), the frequency of using masks of medical masks reached the threshold of 88% in 2018 when the frequency of using cloth masks only reached 47% Because of the higher popularity of medical masks in the Vietnamese market, it has created a shortage of goods and at the same time pushed the price up very high.
Figure 3.1 The chart of the frequency of using two typical masks in Vietnam in 2020 in the current situation of Statista's COVID-19 epidemic picture
Following the government's implementation of a social isolation order on April 15th, the price of medical masks experienced a notable decline, returning to its original stable value in April, May, and June This price reduction coincided with a decrease in the number of buyers as the epidemic situation stabilized during those months Consequently, the price of a box of 50 medical masks dropped to 50,000 VND.
The price of masks remained unchanged at the beginning of July, but in the last days of July and the beginning of August when the epidemic situation in Vietnam has bad changes when there is 1 positive case in Da Nang, and at the same time people also started to buy in the form of hoarding masks at home as a quantity to buy Masks spiked because of the sudden increase in demand, so the price of masks is now increased for 3-4 layer masks, its price has been increased to 105,000- 150,000 VND copper/box (50 pieces).
The price of masks in the following months until the end of 2020 is always a phenomenon Continuous discount until the price of masks reaches the lowest level in December when the price of 4-layer masks at this time only ranges from 35,000-60,000 VND/box (50 pieces) because at this time, the supply of masks is abundant and the number of buyers is still much but there was a decrease compared to the end of July.
In 2021
change is always stable, but by the end of January, the price of The page continued to be padded when the epidemic situation in Vietnam began to change bad causing the number of buyers to increase suddenly, which made the price of an exported Equipment price increase to 150,000-290,000 VND/box (50 pieces)
In February and March, although the demand for masks increases, the price of masks increases Pages tend to be stable, there is no shortage of goods like in epidemics before
In April, the price of masks fell to the lowest level in the past 3 years because now The supply of producers has exceeded the level, causing a phenomenon of overcapacity and goods lots of inventory
Going through May, although the amount of domestically produced goods are still very much, the situation The price of masks in the country is better and more stable.
Assessment of supply-demand response according to influencing factors
Factors affecting supply
This is the main factor affecting product supply In the principle of supply and demand, when the price of a product increases, the supply of the product also increases and vice versa Especially, when the epidemic happened like today, the price of masks has increased quite a lot compared to the previous day, leading to an increase in supply During the peak epidemic (March 2020) the price of medical masks increased to 300,000 VND / box (6 times higher than the price before the epidemic), so the mask factory, company has been trading in masks more and more until now. b) Technology
The change in supply can also be due to advances in technology that help reduce production costs (if there are modern machinery and technology, the hiring of workers will be greatly reduced) from which the cost of products is also reduced In addition, when businesses can put technology into production, it will make products more diverse and functional Masks, instead of covering dust and droplets, also have anti-virus and fine dust functions c) Government Policy
With the role of regulating and protecting the economy, the Government has a great influence on the supply of products The lower the tax, the higher the supply of that product On the other hand, if strict regulations are introduced and excise taxes are added, the supply of products will decrease.
Currently, the Government's mandatory wearing of masks in public places to prevent the COVID-19 epidemic has also increased the supply of masks: "At the point, a clause 1, Article 12 of Decree 117/2020/ND-CP, regulations A fine ranging from VND 01 million to VND 03 million shall be imposed for failure to take personal protection measures for participants in the fight against epidemics and people at risk of contracting the disease according to the guidance of health authorities.
Thus, the act of not wearing a mask in public when required to prevent the epidemic can be fined up to 03 million VND.” The above fine level is the fine level for individuals For the same act of administrative violation, the fine level for organizations is equal to 02 times the fine level for individuals.
Factors affecting demand
Demand for goods and services also depends on people's income Masks are an indispensable item, but if the user's income is high, the supply will be diverse in terms of the function of the mask (instead of using a medical mask that can only prevent droplets and dust, people with low- income High level will require more anti-fine dust, virus and of course the price of this mask will also be higher for eg N95, 3M, ) In contrast, for people with low or middle income will be less there is a need to use a better quality mask. b) Number of consumers
The demand for masks in the market is affected when personal demand increases at present, or when potential consumers can pay different prices for goods and services The higher the number of mask consumers, the greater the market demand When everyone is out, everyone must wear a mask Thus, if a person has to go to work every day, that person must use a mask every day (at least 1 per day) On the contrary, if a person only stays at home and does not go out, they will rarely use a mask If the number of people going out increases, the demand for masks will increase and vice versa.
However, there is still a case for using masks indoors in large households when some family members begin to show signs related to or similar to symptoms of COVID-19 According to statistics from Statista, the habit of using masks in the home of Vietnamese people during the COVID-19 epidemic in 2020 has shown the essentiality of this item.
Figure 4.1: Frequency of wearing face masks while staying inside due to coronavirus COVID-19 among Vietnamese 2020 c) Consumer tastes
Consumer tastes and preferences significantly impact demand When consumers favor specific brands or product attributes, their demand increases Conversely, if consumers encounter negative experiences with a product, such as discomfort or health concerns, demand declines Therefore, understanding consumer expectations and fulfilling them is crucial for businesses aiming to meet market demands effectively.
Another factor that affects the demand for goods is consumers' expectations about future commodity prices If the price of masks increases without adding outstanding functions or overcoming adverse factors, it will certainly disappoint consumers and switch to another type of mask And when consumer expectations decrease, they will partially suspend mask consumption, causing their current demand for masks to decrease And when the brand meets the expectations of consumers, they will continue to use that type of mask, causing demand to increase.
Market dynamics have been significantly influenced by factors that have disrupted the supply and demand equilibrium for masks These factors have driven a surge in demand, leading to a subsequent shift in the relationship between supply and demand As a result, the market has witnessed a transformation in its overall landscape, with masks becoming a highly sought-after commodity.
Excess and shortage of goods
In 2020, COVID-19 has caused a serious shortage in the supply of masks, which is mainly caused by a spike in demand.
Countries in the world in general and Vietnam, in particular, are almost unable to meet the demand for masks According to the law of supply and demand, when businesses cannot meet the needs of customers, the price increase is natural.
Figure 5 1 The demand for medical masks has increased sharply in many countries
However, with the COVID-19 epidemic situation, it seems that Vietnamese people can be willing to buy masks at any price because their necessity leads to relatively inelastic demand Even a significant increase in price does not change the quantity consumers are willing to buy Because of the necessity of this product, the demand for this product will increase in a short time.
That is the theory, but in fact, we can see that there is a shortage in the quantity of this type of item when the manufacturing enterprises cannot supply enough for the people's consumption This has caused an imbalance in the market.
According to experts, the price of masks will continue to increase if the epidemic situation becomes stressful while the supply cannot meet the demand of consumers.
With such a shortage of masks, many problems will arise, including the formation of a black market and providing consumers with a more expensive price In addition, it is difficult to avoid the fact that consumers are forced to queue to buy goods leading to uneven and unfair distribution of goods Therefore, the Government has chosen to increase the supply of masks by directly subsidizing businesses.
Subsidizing a preferential loan for manufacturing enterprises to create growth in supply and at the same time, create a balance in the market Basically, mask manufacturing enterprises in the country, after receiving preferential loans from the state, have shown signs of returning, with sufficient production capital to meet the needs of domestic consumers.
The market will gradually stabilize when the production facilities have enough resources However, that has resulted in an oversupply of goods that will take place soon when more and more businesses produce masks This helps consumers have a variety of choices, but with too much domestic supply, this product has been kept in stock in warehouses and factories Therefore, to solve this problem, businesses will turn to domestic production to meet people's needs, and at the same time export masks to countries that are experiencing shortages of this product.
According to a report by the Industry Department, there are now more than 37 million cloth masks of all kinds that have been successfully exported, but there are also more than 20 million pieces of cloth masks in stock, causing many difficulties for businesses textile industry.
Due to the government's timely support, businesses in the mask market have rebounded, leading to an ample supply that meets domestic demand As a result, the mask market has stabilized, with fears of shortages and price gouging subsiding.
Government policies affect the market
Due to the severe impact of the COVID-19 epidemic in 2021, the economic activities of each household were halted or reduced, causing revenue to be negatively affected while the demand for spending on appliances medical equipment, and preventive equipment for epidemics increased again Therefore, the Government must set policies to support people and businesses through this pandemic as well as in the future.
Enterprises importing materials for mask production must adhere to Ministry of Health standards outlined in Decree No 98/2021/ND-CP Masks are classified based on risk levels, while medical mask facilities must comply with ISO 13485 and have proper documentation Additionally, mask distribution requires clinical trials adhering to Decree No 98/2021/ND-CP Chapter IV, with full trial records, product registration, and accountability from participating individuals.
After the successful clinical trial has passed, businesses have begun to distribute masks to the consumer market According to Thanh Nien Newspaper on June 3, 2021, in Ho Chi Minh City, there are currently 30 businesses making medical masks with a production capacity of about 12-
13 million pieces/day, selling prices ranging from 25,000-56,000 VND /box of 50 pieces (4 layers with filters) Currently, on the market, there are standard masks such as cloth masks, N95 masks, and 3M masks, for people to use.
However, due to the increasingly stressful epidemic situation, the Government has decided to reduce tax by 5% from August 1, 2021, according to Circular No 14/2018/TT-BYT: Regulations on medical equipment goods belong to the right of the Government For imported masks, the Government has issued regulations on tax exemption Because of this, it has stimulated production facilities to appear more and more consumers, creating a balance of market supply and demand.
Businesses exploiting government tax cuts to increase revenue will be penalized under Decree No 98/2020/ND-CP, with fines for production facilities varying by violation Additionally, Decree No 98/2021/ND-CP requires medical establishments to provide qualified medical consultation services Specifically, private medical consultants must meet professional qualifications and follow established procedures and record-keeping.
Information on medical masks must be accurate and up to standards according to Chapter IX of Decree No 98/2021/ND-CP: Information on medical equipment must be complete, accurate, easy to understand, and truthful The Ministry of Health together with other ministries must fulfill their responsibilities according to the Government's policy, chapter XII of Decree No 98/2021/ND-CP: Ministries will have different responsibilities for the management of masks
Thanks to the Government's policies, the interests of consumers as well as production facilities are protected, leading to the balance of market supply and demand during the increasingly stressful and difficult epidemic period.
Recommendations
Through our research on the mask market in Vietnam from a micro-economic perspective, we realize that this is a very potential and important market in Vietnam, but there are still some shortcomings When there are external factors affecting this market, typically the recent COVID-
19 pandemic, our team would like to offer some solutions for the market:
-The Government should set a ceiling price for each type of mask to avoid the situation where the price of masks suddenly increases, making it difficult for people to buy masks during the epidemic period, in addition to giving Setting a ceiling price can also help make the market more stable, avoiding the fact that merchants take advantage of situations such as the epidemic to buy and block the supply of masks from manufacturers and sell them at higher prices.
-It is advisable to encourage domestic mask manufacturers to always have a reserve and large enough to supply to the domestic population to prevent bad situations that may occur.
- The State should have more policies to support businesses and companies in the domestic mask manufacturing industry in terms of finance, more advanced technological equipment in order to stabilize the supply for the market In addition, the Government can issue other policies to support the development of other industries related to mask materials.
Individuals must possess the knowledge to select masks that align with their financial and functional requirements, ensuring their suitability Furthermore, it is crucial to distinguish between genuine and counterfeit masks to prevent deceptive practices and protect one's well-being.
Figure 2.2: https://www.statista.com/chart/21452/share-of-people-wearing-face-masks-per-country-COVID- 19/Can, H A (2020, February 24) Vietnam Values Retrieved from Vietnam Investment
Figure 2.3: https://www.ipsos.com/en/more-people-say-theyre-wearing-masks-protect-themselves-COVID- 19-march
Figure 2.4: https://www.statista.com/statistics/1097285/vietnam-frequency-of-wearing-masks-outdoor/
Figure 3.1: https://www.statista.com/statistics/1097298/vietnam-types-of-used-face-masks/
Figure 4.1: https://www.statista.com/statistics/1097292/vietnam-frequency-of-wearing-masks-indoor/
In the wake of the COVID-19 pandemic, the pricing of face masks has undergone significant fluctuations Initially, panic buying and supply shortages caused prices to surge However, as production increased and supply stabilized, prices have gradually decreased Despite this, some healthcare-grade masks remain relatively expensive due to their higher quality and efficacy The pricing of face masks is influenced by a range of factors, including production costs, supply and demand, and government regulations.