Retail sales up 26pct in first eight months

Retail sales reached an estimated 1 trillion dong (US$51.3 million) during the first eight months of the year, an increase of more than 26 percent compared to the same period last year, according to the General Statistical Office (GSO).

A GSO report showed that tourism services saw the highest increase during the first eight months, climbing 35.4 percent to 90.4 billion dong ($4.6 million), while sales in goods and services rose 27.3 percent to 797.8 billion dong ($40.9 million).

Increasing foreign tourists’ arrivals during the period contributed strongly to these growth figures, said officials at the GSO’s trade department.

The Vietnam Retail Analysis for the 2008-12 period, carried out by global market research and information analysis company RNCOS, said the country was fast emerging as a preferred tourism destination, with an estimated compound annual growth rate of about 8 percent during the 2008-12 period.

And tourist arrivals would help keep the country’s retail sector busy, the report said.

In the first eight months, foreign retailers achieved a turnover of 29.7 billion dong by selling goods and services in domestic markets, representing a year-on-year increase of 49.2%.

The State-run sector, meanwhile, posted a revenue of 103.9 billion dong ($5.3 million) from retail sales in the same period, while the private sector gained a turnover of 345.9 billion dong ($17.7 million).

Analysts from the US-based Research and Market Company said the rapid growth in Vietnam’s retail market meant it remained an attractive destination for retail investment due to its strong GDP growth, changes in the country’s regulatory structure favouring foreign investors, and increasing consumer demand for modern retail concepts.

“We expect that despite the 2008 financial turmoil, the retail industry turnover in Vietnam will continue growing. government support and favourable consumer confidence will result in positive outlook for retailers in Vietnam,” said the firm.

“Traditional retail channels will continue to dominate the market, but a government decision to allow 100 percent entry to foreign retailers under WTO commitments will mean that continued high growth is unrealistic,” they said, forecasting that the country’s retail industry would surpass $85 billion in revenues by 2012.

“We also expect a short wave of consolidation during the next four years as foreign retailers will try to consolidate their position and deepen their market penetration.”

The GSO officials added that the upcoming holidays and growing consumption power would continue to fuel stronger retail sales towards the end of the year. – Vietnamnews

Tags: Vietnam retail market, Vietnam Retail Sales