Vietnam tries to jumpstart stalled retail industry

Rising inflation and other economic difficulties are pervading the entire retail market.

According to the General Statistics Office, revenue from retail sales in the first six months of the year is estimated to reach VND912 trillion, up 22.6 per cent against the same period last year.

Dinh Thi My Loan, deputy chairwoman and general secretary of the Viet Nam Retailers Association, said the real growth rate of the market was only 7 per cent because of the slippage in prices.

Loan said the growth of Viet Nam’s retail market could be 6 per cent for the entire year if there would be no improvement.

During the last six months, the expanding speed of supermarket systems has been slowed down.

Sai Gon Co.op deputy general director Tran Thi Tuyet Hoa said Co.opMart had delayed the opening of new large-scale supermarkets, and was focused in expanding the Co.op Food store system. Local electronics retailer WonderBuy in late May declared bankruptcy after only one year of operations, citing a loss of VND52 billion.

It is the first electronics retailer in HCM City to do so due to the harshness of the market as customers were curtailing their spending.

To cope with the situation, retailers have offered many promotional programmes to attract customers, and negotiated with suppliers to have the best price.

Keep calm

Loan said retailers should keep calm and conduct market research to have suitable business plans.

They need to double-check their investment activities and manage their price policies.

Middle – and high – grade managers need to have advanced skills in management, information technology applications, and experience in art displays.

US-based global consulting firm A.T. Kearney has announced the annual Global Retail Development Index for 2011 in which Viet Nam slid nine grades to the 23rd position among 30 surveyed emerging economies.

A.T.Kearney’s annual reports showed that Viet Nam ranked first among the most attractive retail markets in the world in 2008, fell to sixth in 2009, and then to the 14th position last year.

Loan said the downgrading of the Viet Nam retail market was not a worrying issue because domestic retailers were still confident.

The bankruptcy of WonderBuy could cause customers to turn back on retailers, said Nguyen Xuan Phu, marketing director of Nguyen Kim Electronic Appliance Center.

To make customers feel secure, many retailers have had messages and activities as well on their sales policies.

Phu said Nguyen Kim undertook to guarantee after-sales benefits for customers.

Dinh Anh Huan, general manager of The gioi Dien tu (World Electronic Company Limited), a member of The gioi Di dong (Mobile World Co Ltd), said: “Each retailer should prove its business capacity to gain customer’s belief.”

“The gioi Dien tu proves it by the expanding of stores nationwide.”

Huan said the company would open an additional eight electronic appliance centers nationwide, besides two existing centers in HCM City and southern Dong Nai Province.

The gioi Dien tu, and The gioi Di dong would apply the Customer Relationship Management to administer all customer inform-ation, from accumulating points to gifts, to their complaints, Huan added.

Smaller electronic center iDeas is offering a promotion to give gifts or deduct from the last payment.

“The promotional form is not something unheard of, but it could make customers feel secure,” Ngo Quang Vinh, marketing director of iDeas, said. – VNA

Tags: vietnam retail industry, Vietnam retail market