Vietnam, a lucrative retail market, has taken a step down on the list of the most attractive global retail destinations, according to the 2007 Global Retail Development Index (GRDI), an annual study conducted by AT Kearney of retail investment attractiveness among 30 emerging markets.
Vietnam scored 74 on the GRDI, a full 100-point scale, less than last year, losing its third place position to China. Vietnam’s score gradually increased from 76 in 2004 to 79 in 2005 and rocketed to 84 in 2006.
The study based its results on four variables: "country risk," measuring political risk, debt and credit ratings; "market attractiveness," encompassing retail sales per capita, population, infrastructure and regulations; "market saturation;" and "time pressure."
The higher the ranking is the more urgency for retailers to enter the market, according to the study.
Vietnam improved the country risk rating this year by scoring 57 points against 43 in 2006, 54 in 2005 and 52 in 2004.
China scored 75 points in the category for 2007, Russia 62, and India 67.
Vietnam made the most encouraging improvement in terms of attractiveness, but it still fell far short of its three main competitors, wining 29 points in 2004 and 2005, 24 in 2006 and 34 in 2007, much lower than India’s 42, China’s 46, and Russia’s 52.
Vietnam saw sharp declines in the other two criteria, getting 90 points for market saturation level in 2004, but 88 in 2005, 87 in 2006 and only 76 in 2007.
Time pressure has become Vietnam’s worst category with only 59 points, a huge drop of 22 points over the previous year.
Local experts expressed concerns that this revealed unstable development, which could make the retail market less stable. (Thanh Nien Daily, VnExpress)
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