Prospects of Vietnam’s retail market

Since 2009, Vietnam has opened its distribution market to foreign investors based on its WTO commitments and domestic retailers are trying their best to stand firm on their own turf.

Experts said Vietnam has great potential for retail and service markets. This sector is expected to create US$20 billion and increase by 30 percent per year.

Recently, administrative agencies and businesses paid much attention to building a retail distribution system, which was regarded as the core of an economy. This was discussed before and after Vietnam’s entry to the World Trade Organisation (WTO).

At that time, economic experts said domestic retail businesses should dump goods to control market before foreign distributors’ entry when Vietnam entered the WTO.

So far, some of Vietnam’s retailers have built their own trade names and raise their capacity to compete with international partners. However, they still face a number of snags in their operation, particularly in rural areas.

Expert Pham Chi Lan said: “The business infrastructure is very important. It is a directly competitive factor in domestic trading”.

Vietnam is among the most attractive retail markets in the world. The huge retailers, such as Walmart (the USA), Carrefour (France) and Tesco (the UK) are very interested in Vietnam’s retail market prospects.

It is urgent to establish a strong retail network to stop the flow of bad quality and fake goods illegally smuggled through the borders into Vietnam, they argued.

Nguyen Thi Hong Huong, General Director of the Vietnam Textile and Garment Group (Vinatex) shared her idea about an effective distribution system. “We have tried to combine domestic producers with the trade names and pledged to improve our product quality and reduce prices through a series of promotional campaigns”, she said.

Tran Tuan Anh, Deputy Minister of Industry and Trade said: “The domestic retail market has different scales and demands based on local development levels and requirements. So, to ensure sustainable development of the retail market as well as investors’ benefit, we must take local requests into consideration”.

Vietnam’s retail sector accounts for 20-22 percent of the nation’s total retail market (compared to 55 percent in Thailand, 60 percent in China and 60 percent in Malaysia). Economic experts said 2011 will see a booming retail market in Vietnam. – VOV

Tags: vietnam retail industry, Vietnam retail market