Retail trade poised for development

Although traditional markets are still dominating the Vietnamese retail market, the popularity of supermarkets and retail shops is forecast to increase strongly in the near future, Nguyen Nu Tuyet Hong, deputy director of TNS market research company, said at a seminar held yesterday in HCM City.

According to the latest survey conducted in HCM City, Ha Noi, Da Nang and Can Tho by TNS, 78 per cent of consumers like modern retailing because of the ease of finding products.

The findings showed that 77 per cent chose these markets for safe products and 72 per cent for new products.

The survey revealed that convenient, healthier products and higher quality brands in supermarkets were decisive factors for consumers’ decisions. They were also ready to pay higher prices for products.

Hong said shopping expenditures at modern retail stores had doubled in the past six years.

The average expenditure of a shopper is VND600,000-1.4 million per year at supermarkets or modern outlets.

Last year, Viet Nam ranked 12th in global destinations for the most attractive emerging retail market, according to the A.T. Kearney consultancy firm.

Viet Nam’s fast-moving consumer goods market continued to shine in Asia with a growth rate of 21 per cent, while Thailand was 4.5 per cent, Taiwan 10.1 per cent, Philippines 4.6 per cent, South Korea 7.7 per cent and Malaysia 1.9 per cent.

Aaron Yeoh It Ming, general director of Shop & Go retail shop chain, said it had 47 convenience shops and plans to expand to 70 by the end of this year on the faith of the development of the Vietnamese retail market.

He has worked with more than 100 local distributors; 60-70 per cent of goods in his shops are Vietnamese products.

Private brands

At the seminar, Loic Deleplace, Purchasing Director – Fast-Moving Consumer
Goods at Groupe Casino, which owns the Big C chain in Viet Nam, said development of their own brands should be increased by retailers to satisfy the demand of consumers, especially during times of inflation.

Low-cost products will sell better as consumers are now trying to purchase cheaper products to cut expenses.

Brand products will have a quality equal to those of the same kinds of other brands, but will sell at prices15-30 per cent lower.

According to the latest survey AC Nielsen conducted in March, many current retailers are trying to develop their own brands.

Metro Cash & Carry Viet Nam, the foreign distributor who came to Viet Nam in 2002, is considered a pioneer for the tendency of retailers to develop products with their own brands. It now has six brands.

The Vietnamese Co-Op Mart Chain of Sai Gon Co-Op has also marketed products with its own brand in collaboration with 45 producers such as Kinh Do, Lix detergent, Sai Gon Paper and Dong Nai foodstuff processing factory.

To develop private brands, the producers will have an advantage to display their products at “good positions” on the shelves, which will help catch the attention of customers.

They will save a large amount of expenses on marketing and advertising their own products. — VNS

Tags: vietnam retail industry, Vietnam retail market