What goods and services are subject to consumer sales promotions in Vietnam? What are the regulations on distinguishing between consumer sales promotion and trade sales promotion?
What is consumer sales promotion? What is trade sales promotion?
Pursuant to the provisions of Article 88 of the 2005 Law on Commercial of Vietnam on consumer sales promotion as follows:
Consumer sales promotion in Vietnam
1. Consumer sales promotion means activities of commercial promotion conducted by traders to promote the purchase and sale of goods or the provision of services by offering certain benefits to customers.
2. Traders conducting consumer sales promotion are those falling into one of the following cases:
a/ Traders directly conduct sales promotion for goods and/or services that they trade in;
b/ Traders engaged in providing sales promotion services conduct consumer sales promotion for goods and/or services of other traders under an agreement with the latter.
According to the above regulations, consumer sales promotion means activities of commercial promotion conducted by traders to promote the purchase and sale of goods or the provision of services by offering certain benefits to customers.
Currently, Vietnamese law has not provided a definition of trade sales promotions. However, “trade sales promotions” means activities affecting sellers (sales agents, intermediary customers, distributors) to stimulate the purchase of goods.
What goods and services are subject to consumer sales promotions in Vietnam? What are the regulations on distinguishing between consumer sales promotion and trade sales promotion?
What are the regulations on distinguishing between consumer sales promotion and trade sales promotion?
Consumer sales promotion and trade sales promotion are distinguished based on the following criteria:
Criteria | Consumer sales promotion | Trade sales promotion |
Definition | Consumer sales promotion means activities of commercial promotion conducted by traders to promote the purchase and sale of goods or the provision of services by offering certain benefits to customers | “trade sales promotions” means activities affecting sellers (sales agents, intermediary customers, distributors) to stimulate the purchase of goods |
Basis | Commercial Law 2005 and Decree 81/2018/ND-CP | There are no regulations |
Purpose | Targeting consumers, encouraging the purchase and use of products and goods ⇒ Increase purchasing power | Targeting sellers (intermediaries, agents, distributors) to increase sales ⇒ Increase sales power |
Nature | - Increase revenue; - Raise the demand; - Reduce inventory. | - Freeing inventory; - Enhance sales; - The more you sell, the more rewards you get from the manufacturer |
Form | - Giving samples of goods or providing samples of services to customers for trial use free of charge. - Gifting goods as gifts or providing free-of-charge services to customers. - Direct discounts; - Old goods exchange new goods; - Sweepstakes; - Organize regular customer program (points card). - Organizing for customers to participate in cultural, art, entertainment and other events for promotional purposes... (according to Article 92 of the Commercial Law) | - Sales bonus; - Giving a gift; - Travel bonus... |
What goods and services are subject to consumer sales promotions in Vietnam?
According to the provisions of Article 5 of Decree 81/2018/ND-CP of Vietnam on goods and services subject to consumer sales promotions as follows:
Promoted product and promotional product
Promoted product or promotional product must comply with regulations of the Commercial Law and the following regulations:
1. Promoted products must not include wines, lottery, cigarettes, breast milk substitutes, medicines for human use including those permitted for circulation as regulated by the Ministry of Health (except for the case in which sales promotion is dedicated to traders involved in drug trading), examination and treatment service of public medical facilities, education service provided by public educational facilities or public vocational training facilities, goods and services that have been banned from circulation in Vietnam and other goods and services prohibited from sales promotion as required by laws.
2. Promotional products must not include wines, lottery, cigarettes, curative medicines for human use including those permitted for circulation as regulated by the Ministry of Health (except for the case in which sales promotion is dedicated to traders involved in drug trading), goods and services that have been banned from circulation in Vietnam and other goods and services prohibited from sales promotion as required by laws.
3. Money can also be used as promotional merchandise, except for sales promotion conducted in the forms prescribed in Article 8, 10 and 11 of this Decree.
Pursuant to Article 93 of the 2005 Law on Commercial of Vietnam, sales promotion goods and services mean goods and services use by traders to promote their sale and provision in various forms of sales promotion. Sales promotion goods and services must be those traded lawfully.
Thus, sales promotion goods and services mean goods and services use by traders to promote their sale and provision in various forms of sales promotion, but does not include the following goods or services:
+ Wine
+ Lottery
+ Tobacco
+ Milk substitute for breast milk
+ Medicines for human use, including drugs that have been allowed to be circulated according to regulations of the Ministry of Health (except for the case of promotions for drug traders)
+ Medical examination and treatment services of public medical establishments,
+ Educational services of public institutions, public vocational education institutions
+ Goods and services banned from circulation in Vietnam
+ Other goods and services prohibited from promotion as prescribed by law.
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