After more than one year Vietnam joined the World Trade Organisation (WTO), the Vietnamese retail market gets a clear facelift. Local retailers are actively expanding their networks, upgrading infrastructure, professionalising salesperson and manager workforce and cooperating with each other to consolidate and increase their strength on the market.
The total retail and service turnover of Vietnam was estimated to exceed VND700 billion, representing an on-year increase of 23 per cent. This growth rate, to a certain extent, cleared away worries about the Vietnamese retail market. Ms Dinh Thi My Loan, General Secretary of the Vietnam Retailers Association, said: “The retailer community in our association has been aware of the market picture. Previously, many thought that the domestic retailing industry would be collapsed, even the traditional channel of small markets, roadside shops and modern market chains. However, Vietnamese companies know that the opening of the market will give both opportunities for domestic and international players. Vietnamese retailers are not passive but gradually adaptive to the new situations.”
Mr Nguyen Ngoc Hoa, General Director of Saigon Co-op, stressed that “One year is a very short time to tell deadly WTO affects on any industry. It takes time and it depends on the pressure from international players and on the progressive capacity of local enterprises.” He said, under the pressure of various factors, including the WTO, the Vietnamese growing economy will push up the purchasing power. Significantly, the demand for better quality of products and services from producers, distributors and retailers heats up the market.
The retailers are now divided into three groups. World-leading retailers, which are not present in Vietnam, are popularising their names and cooperating with local retailers and they have opened representative offices in Vietnam to wait for the time Vietnam to fully open the market. Foreign companies, which have been already in Vietnam, are actively expanding their networks and increasing competitiveness. Domestic retailers are expanding cooperation with local partners to promote their advantages.
Saigon Co-op, a leading retailer in Vietnam, has consolidated its market position and influence. Hoa said his company has set the targets of market speedup and network expansion. It has increased its presence in key urban markets and extended to rural markets. “We accepted losses in the first years but will soon build a strong retailing chain throughout the country. At present, we have 26 supermarkets and target to operate 50 supermarkets in 2010. This is a pressuring goal. Specially, Saigon Co-op is deploying the second phase ERP system to link its entire network in 2008.”
Each enterprise has its own development policies. However, according to Ms Loan, to assist domestic retailers to integrate, the Government should have consistent and clear plans, forecasts and policies.
Bien Ngoc
Vietnamese
