In 2015, when Vietnam opens its retail market completely, a large number of retail groups such as Auchan, Robinson and Walmart are likely to penetrate the market, which could create an explosion of modern retail channels such as convenience stores, supermarkets and big commercial centres. Modernisation and expansion
Vietnam’s retail market is changing extensively, becoming more modern and integrated, and as a result its requirements are also getting increasingly higher and more diverse. In the first ten months of 2014, total retail sales nationwide reached nearly VND2,400,480 billion, up 11.1 percent compared to the same period in 2013, slightly lower than the 12.6 percent increase of last year. The main reason is weak purchasing power. Excluding the factor of increased price, the total retail sales of the first ten months had an increase of 6.4 percent. Total retail sales of goods and services for 2014 are projected to reach VND2,970 trillion, up 11.3 percent compared to 2013.
According to the Vietnam Retailers Association, as of 2013, Vietnam had about 724 supermarkets, 132 commercial centres, a few hundred convenience stores, nearly 9,000 markets of various kinds and about 1 million family stores. By 2020, the country is expected to have about 1,200-1,300 supermarkets, 180 trade centres and 157 shopping centres. Currently, this type of distribution is claiming about 25 percent of the Vietnam distribution market.
Mr Nguyen Tien Vuong, Deputy General Director of Hanoi Trade Corporation (Hapro) said that in recent years, businesses have started to conduct more drastic measures to plan, renovate, construct and expand trade infrastructure systems in the city as well as some northern provinces. So far, Hapro’s trade infrastructure has developed and consisted of 2 HAPRO Shopping Centres, 3 Market Centres, 40 supermarkets and HaproMart convenient stores, 44 Haprofood shops selling guaranteed products and other specialised store systems.
According to Ms Le Viet Nga, Deputy Director of the Department of the Domestic Market ( Ministry of Industry and Trade), domestic enterprises recently continually expanded distribution channels in order to get closer to consumers across the country. A notable example was Vinatex with the chain retail supermarkets Vinatexmart. Before, stores and dealers of textile enterprises were often only present in big cities, but now consumers can easily find retail garment stores in all provinces and cities across the country. Besides Vinatexmart, the member units of the group such as Viet Tien, Garment 10, Duc Giang, Hanosimex and Phong Phu also actively opened stores and dealers to introduce products into all provinces and cities in the country. As of 2013, there had been 4,125 stores (a 4 percent increase compared to 2012). In 2014, this figure is expected to reach 4,286 stores.
Sharing experiences doing business in Hanoi market, Ms Dang Thuy Ha, Customer Director of Nielsen Vietnam in the northern region, said the retail sector was ushering in a new era. Shopping trends in the digital era tended to steer toward e-commerce with modern technology. Vietnamese retailers should focus on category management and services such as loyal customer cards to catch up with the development trend of regional modern sales channels.
Vietnamese retailers maintain the initiative
According to the Vietnam Retailers Association, although foreign investors in the retail sector account for only 3.4 percent of the businesses involved in this sector, they have the strongest growth rate, reaching over 21 percent. The competition between domestic and foreign enterprises has been getting fierce, but it does not mean that domestic firms are losing their “home ground” or falling into a passive situation. Chairperson of the Vietnam Retailers Association, Ms Dinh Thi My Loan, said that foreign firms getting into Vietnam’s retail market are often widely advertised, so people think that they have a strong presence. In fact, however, modern retail channels account for about 25 percent only and almost all foreign retailers are investing into these channels alone.
Some local strong retailers indicated by Ms Dinh Thi My Loan include Pico, Nguyen Kim, Tran Anh. Reputable networks of local businesses such as Fivimart, Intimex and Coopmart also have more advantages than foreign competitors which are the initiative in goods, especially domestic brand names.
Mr David Alan Treadgold, Member of the Advisory Council of Oxford Institute of Retail Management, pointed out that the only visible weakness when comparing internal and external enterprises was the ability of applying e-commerce and marketing techniques. Mr Treadgold suggested that Vietnamese businesses should prepare themselves fully in terms of technology, human resources and management to cut costs and improve competitiveness.
Huong Ly
Đăng ký: VietNam News