Partners crucial for local retailers

Co-operation was one of the most crucial factors to help domestic retailers survive in the domestic market since the country opened its doors to international retail at the beginning of 2009 under its commitment to the World Trade Organisation (WTO), a seminar was told.

At a meeting held by the Ministry of Industry and Trade (MoIT) in Ha Noi on Tuesday, Huynh Van Minh, chairman of the Viet Nam Distribution Network Development and Investment Joint Stock Company said Vietnamese retailers should work with both local and foreign partners under joint stock, capital contribution and joint investment models.

Chairman of Phu Thai Joint Stock Company Pham Dinh Doan agreed with Minh, saying that domestic retailers should create favourable conditions to attract foreign investors.

“Foreign companies are very interested in co-operating with Vietnamese partners in the retail field. In a joint venture, the Vietnamese partner should hold 51 per cent or more of the charter capital, so they are financially secure. Therefore, co-operation should be encouraged,” Doan suggested.

At the meeting, Nguyen Thi Hong Huong, director of Vinatex Mart conceded that co-operation among domestic retailers was still lacking sustainability, saying that foreign retailers were controlling the market which forced local retailers to follow their lead.

Huong also said co-operation among Vietnamese retailers would help sharpen their competitive edge in the retail field while boosting domestic production and their grip on the market.

Vinatex was co-operating with several large local retailers in the fashion field, including Intimex, Fivimart and Hapro. However, they were struggling to work together, due to problems regarding location, she said.

Several retail representatives expressed their concerns over the sudden influx of foreign retailers with abundant capital, following Viet Nam’s commitment to the WTO. They went on to suggest that foreign companies received preferential treatment when it came to choosing retail locations.

Meanwhile, Vietnamese retailers were mostly small-and-medium-sized companies with low competitiveness, due to a lack of capital and human resources, and were not given the preferential treatment that their foreign competitors enjoyed.

A representative from Hapro said Vietnamese retailers should focus on retail infrastructure development, adding that they were faced with difficulties in finding locations to built trade centres. As a result, they had to sub-lease land from private firms while foreign retailers were given priority regarding land to build trade centres.

To help them compete, Minh said that domestic retailers should be allowed to rent land with long-term contracts at preferential rates.

Chairman of the Viet Nam Retailers Association Pham The Rue said the Government should create a playing field for both foreign and local retailers regarding the business environment and land policies.

At the meeting, MoIT’s deputy minister Ho Thi Kim Thoa said the ministry would mull over policies on distribution and retail system development.

Regulations for joint-ventures between foreign and domestic retailers with a 51 per cent or more share held by local partners would also be considered, she said, adding that the ministry would also review policies on logistical system development and “Made in Viet Nam” programmes in order to help retailers become more competitive.

Thoa said MoIT would co-ordinate with the Ministry of Natural Resources and Environment to set up a land fund for distributors and retailers.

“Smuggling, counterfeit commodities and trade fraud would be strictly punished,” she added. — VNS

Tags: vietnam retail industry, Vietnam retail market