The Growing Retail Market
Since it first fully opened to the outside world starting on January 1, 2009, the Vietnamese retail market has been experiencing an encouraging growth. To become more competitive, local retailers need to together create a joint strength and learn more about modern customer tastes.
The Vietnam Retailers Association reported that there are more than 140 supermarkets of different sizes in addition to 20 big trade centers in Vietnam. The country’s total retail sales and services value has grown 18-20 percent per year. More than 70 percent of all producers interviewed by Nielsen Vietnam say that they would experience a two-digit growth in 2010 meaning that the Vietnamese retail market would increase 20-25 percent in that year.
Many more Vietnamese people now choose to go to a supermarket instead of going to a traditional marketplace. This contributes to the development of the modern retail system.
Lam Thi Phuong Thao from Ho Chi Minh City said that going to a modern supermarket makes it possible for her to save time and buy goods without bargain, and that such a supermarket has numerous choices for customers.
Surveys show that many Vietnamese choose buying goods at a supermarket after they go to that supermarket several first times for window shopping.
Nielsen Vietnam surveys indicate that in 2007, about 65 percent of all Vietnamese consumers occasionally bought goods at a supermarket, and that the rate is 95 percent in 2009. Accounting for more than 70 percent of the country’s population, young Vietnamese consumers make up a potential market for retailers.
Vietnam Retailers Association statistics show that Vietnamese customers accounted for nine percent of all people buying goods at modern supermarkets/trade centers in 2005, and that the rate increased to 14 percent in 2008 and is expected to reach 24 percent in 2010. In Hanoi and Ho Chi Minh City, Vietnamese buying goods in modern supermarkets/trade centers represent 24 and 37 percent of all people shopping in these places in 2009, respectively.
Ho Chi Minh City People’s Committee has a plan for developing the city’s retail market until 2015 and a related vision to 2020. The plan will make the city’s total retail sales and services value increase 25 percent in 2010, 35-40 percent in 2015 and 60 percent in 2020. Under the plan, from 2010-2015, the city will gradually decrease the number of traditional marketplaces and open additional 95 modern supermarkets and additional 140 trade centers in the city. The city will also improve traditional marketplaces to satisfy the local community’s shopping demand.
The biggest retail market in Vietnam, Ho Chi Minh City has acknowledged the importance of retail market development that satisfies future development demands, benefits the community and contributes to improving the competitiveness of the country’s retail sector.
Domestic retailers say that the Vietnamese retail market needs a ‘bandmaster’ who can make member businesses to work with each other in coping with competition from foreign rivals. They say that the State should be that ‘bandmaster’.
Ho Chi Minh City Investment and Trade Promotion Center (ITPC) Director Vu Kim Hanh says that Vietnamese retailers need the State’s policy-based assistance. Saigon Co.op General Director Nguyen Ngoc Hoa said that one year after the Vietnamese retail market fully opened to the outside world, domestic businesses have realized that they shouldn’t work individually but should work with each other to create a joint strength and become more competitive.
A number of Vietnamese companies, including the An Giang Agriculture and Foods Import Export Company (Afiex), the Vung Tau Housing and Trading Development Company, and more, have had a plan to cooperate with other businesses to develop a professional supply chain.
Hoa said that if domestic retailers have an appropriate development strategy and schedule they will be able to compete with foreign rivals./.
VEN
Tags: Vietnam retail market
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