Vietnamese retailers are seeking to develop the rural retail market to compete with foreign rivals. (Photo: brandsvietnam.com)Hanoi (VNA) – Facing increasing competition fromthe arrival of many world leading retailers, domestic retailing companies areturning their eyes to the rural market to capitalise on the advantage of homeground.
A recent survey of the retail sector in 30 developingcountries conducted by consultant company AT Kearney showed Vietnam is one of themost attractive markets in Southeast Asia. The country was also ranked 6th in the global retail index in 2017.
According to statistics of the Ministry of Industry andTrade, retail and service revenues in the country increased by an average 10percent per year during 2011-2017 to reach 3,234 trillion VND (approximately141.5 billion USD) in 2017.
In the first five months of 2018, total retail revenue wasestimated at 1,752 trillion VND (76.65 billion USD), up more than 10 percentyear on year.
The presence of foreign retailers in the market is apositive sign, as they will create changes in the retail market and bring moreoptions for consumers. Experts said domestic retailers should change in orderto differentiate themselves from foreign counterparts. They should work to makeuse of the advantage of home ground through bringing into play the particularlocal culture and products.
Many local retailers have begun to invest in supermarketsand convenience stores in rural areas.
Vingroup is an example, whose chain of VinMart convenience storeshas become the largest in the country with 1,500 stores across 30 cities andprovinces only after more than two years.
Saigon Co.op has gone a different way, turning traditional groceriesin residential areas into modern retail agents bearing the group’s logo Co.opSmile.
Besides big corporation, many small- and medium-sized retailersare also investing in convenience stores. The Tuoi Mart Trading Company in HoChi Minh City has joined hands with the trade unions in some companies to openmini-supermarkets in the compound of companies in suburban areas of Ho Chi MinhCity and other provinces such as Tay Ninh and Long An, meeting the needs ofworkers in far-flung areas.
To assist domestic retailers in competing against foreignrivals, the Vietnam Retail Association has proposed to the Government theestablishment of a retailing group based on a partnership of the four leadingdomestic retailers, which are Saigon Co.op, Phu Thai Group, Satra and Hapro.The new group would have total revenue of 4-5 billion USD per year.
For the domestic retail market to catch up with the world,experts pointed to the need for support in the form of macro policy. On thepart of domestic retailers, they should invest in personnel, managementtechnology, brand building and promotion, and expand retailing forms.-VNA
