Vietnamese retailers should improve the quality of their service and management to compete with foreign rivals as international institutions will flock into the country to set up retail joint ventures in the near future, warned an official of the Trade and Industry Ministry.
Under its WTO commitments, Vietnam will allow foreign distributors to establish retail joint-ventures starting earlier this year. From 2009, they can set up wholly foreign-invested businesses, the official noted.
Unless Vietnamese retailers become more efficient, foreign giants like Malaysia’s Parkson and Germany’s Metro Cash & Carry could overwhelm them.
The management system of domestic retail sector is too poor whereas their foreign rivals are extremely good at providing services, said Nguyen Ngoc Hoa, CEO of the Ho Chi Minh City Commercial Cooperative Union (Saigon Co.op).
In most supermarkets, local customers have no choice but standing in long queues to wait to pay their bills, especially at the weekends, he added.
Saigon Co.op is one of pioneers to develop home delivery for purchases, Hoa said, adding that the service costs a minimum of VND200,000 once.
To help local retailers expand their market share, authorities have called for a master plan to develop the trade and distribution industry by 2010, including the construction of wholesale markets and other commercial facilities, the ministry’s official said. However, only 10 of the country's total 64 cities and provinces had submitted local plans.
Meanwhile, foreign retailers are getting ready to make a beeline for the country.
Korea's leading retailer Lotte began building a shopping center this month in Ho Chi Minh City’s District 7.
The German Metro Cash & Carry plans to open four more outlets, mainly in Ho Chi Minh City, southern Dong Nai province, Hanoi, and the central city of Nha Trang.
It already has six outlets with combined annual revenues of US$259.5 million.
Parkson retail group, a leading Malaysian shopping mall operator, plans to invest US$70 million to open 10 stores in commercial hubs like Hanoi, Danang, Can Tho, and Ba Ria-Vung Tau.
Other newcomers who are expected to have a major impact on the market include Wal-Mart and JC Penney of the U.S. (Thanh Nien Daily)
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