A fierce competition is expected to occur in the nation's retail marketwhen V ietnam is to fully open its retail market in 2015, accordingto radio The Voice of Vietnam (VOV).
When the gloves comeoff, tens of thousands of goods from ASEAN member countries will be dutyfree, which is certain to lead to intense price competition ascompetitors aim to get the lion’s share of the country’s 90 millionconsumer market.
However, in the lead up to January next year,foreign retailers seem to be revving their engines preparing for therace while domestic enterprises seem to be idling, downsizing andcutting back.
A number of foreign retailers have been rapidlyexpanding their operations throughout the country. Recently, the leadingretailer of the Republic of Korea - Lotte – announced it is targetingopening 60 supermarkets throughout the country by 2020.
MeanwhileAeon from Japan has announced it will open a second commercial centrein October, aiming to be the dominant player in the Vietnamese retailmarket.
The group also plans to open 20 commercial centres by2020, with a product mix of one-third Japanese goods, one thirdVietnamese products and the remaining from other countries.
USretailer Walmart is also waiting for the green light to get into therace just as soon as the Trans-Pacific Partnership (TPP) Agreement isfinalised and comes into effect.
In general, strong internationalretailers have taken a methodical and strategic approach to positioningthemselves for the opening of the markets.
Can Van Luc, DeputyGeneral Director of the Bank for Investment and Development of Vietnam(BIDV), said foreign retailers have invested heavily in developing brandname recognition, which benefits them in gaining Vietnamese consumers’trust.
They also have more sophisticated and flexible paymentmethods, which meet customers’ demands, providing them distinctcompetitive advantages over domestic retailers, Luc said.
Vietnamnow has 8,500 smaller traditional markets spread throughout thecountry, tens of thousands of private shops, 650 supermarkets, and 125commercial centres.
The leading foreign retailers include Metro,Big C, LotteMart, and Parkson while domestic ones are just Saigon Co.op.CityMark, Hapro, Fivi Mart and Intimex.
The domestic market hasrevealed many weaknesses, with lack of coordination among domesticretailers topping the list, resulting in small and unmethodicaldevelopment.
There are only a few domestic retailers who havegained sufficient trust from suppliers to ensure stable supply of goodsfor customers. In addition, human resources are also weak and lackprofessional skills.
It is clear domestic retailers areconfronting big pressures, requiring them to reconsider trading models,to be more active and professional and improve their capacity.
Theymust find measures to strengthen coordination and cooperation formutual development if they do not want to be left sitting on thesidelines.
It is very important for domestic firms to raise theircompetitiveness by diversifying products and designs and improving thequality of goods and services in order to supply high-quality and safeproducts to customers.
One strength domestic retailers do haveis that currently Vietnamese people are still keen on buying goods attraditional markets. A survey shows more than 87 percent of Hanoianslike temporary, small and traditional markets.
The Hanoi citygovernment’s plan to establish 1,000 supermarkets by 2020 confrontsobjections from many economists who think that it is not a good solutionto promote the development of the retail sector.
Vu Vinh Phu,President of the Hanoi Supermarkets Association, hopes that the NationalAssembly will consider reducing taxes to stimulate retail sales.-VNA
When the gloves comeoff, tens of thousands of goods from ASEAN member countries will be dutyfree, which is certain to lead to intense price competition ascompetitors aim to get the lion’s share of the country’s 90 millionconsumer market.
However, in the lead up to January next year,foreign retailers seem to be revving their engines preparing for therace while domestic enterprises seem to be idling, downsizing andcutting back.
A number of foreign retailers have been rapidlyexpanding their operations throughout the country. Recently, the leadingretailer of the Republic of Korea - Lotte – announced it is targetingopening 60 supermarkets throughout the country by 2020.
MeanwhileAeon from Japan has announced it will open a second commercial centrein October, aiming to be the dominant player in the Vietnamese retailmarket.
The group also plans to open 20 commercial centres by2020, with a product mix of one-third Japanese goods, one thirdVietnamese products and the remaining from other countries.
USretailer Walmart is also waiting for the green light to get into therace just as soon as the Trans-Pacific Partnership (TPP) Agreement isfinalised and comes into effect.
In general, strong internationalretailers have taken a methodical and strategic approach to positioningthemselves for the opening of the markets.
Can Van Luc, DeputyGeneral Director of the Bank for Investment and Development of Vietnam(BIDV), said foreign retailers have invested heavily in developing brandname recognition, which benefits them in gaining Vietnamese consumers’trust.
They also have more sophisticated and flexible paymentmethods, which meet customers’ demands, providing them distinctcompetitive advantages over domestic retailers, Luc said.
Vietnamnow has 8,500 smaller traditional markets spread throughout thecountry, tens of thousands of private shops, 650 supermarkets, and 125commercial centres.
The leading foreign retailers include Metro,Big C, LotteMart, and Parkson while domestic ones are just Saigon Co.op.CityMark, Hapro, Fivi Mart and Intimex.
The domestic market hasrevealed many weaknesses, with lack of coordination among domesticretailers topping the list, resulting in small and unmethodicaldevelopment.
There are only a few domestic retailers who havegained sufficient trust from suppliers to ensure stable supply of goodsfor customers. In addition, human resources are also weak and lackprofessional skills.
It is clear domestic retailers areconfronting big pressures, requiring them to reconsider trading models,to be more active and professional and improve their capacity.
Theymust find measures to strengthen coordination and cooperation formutual development if they do not want to be left sitting on thesidelines.
It is very important for domestic firms to raise theircompetitiveness by diversifying products and designs and improving thequality of goods and services in order to supply high-quality and safeproducts to customers.
One strength domestic retailers do haveis that currently Vietnamese people are still keen on buying goods attraditional markets. A survey shows more than 87 percent of Hanoianslike temporary, small and traditional markets.
The Hanoi citygovernment’s plan to establish 1,000 supermarkets by 2020 confrontsobjections from many economists who think that it is not a good solutionto promote the development of the retail sector.
Vu Vinh Phu,President of the Hanoi Supermarkets Association, hopes that the NationalAssembly will consider reducing taxes to stimulate retail sales.-VNA
