Foreign distributors: Effective channel for exporters

09:27 | 23/11/2017 Trade

(VEN) - According to the Ministry of Industry and Trade, a project designed to boost the participation of Vietnamese businesses in foreign distribution systems up to 2020 has yielded positive results.

effective channel for exporters
Vietnamese mangoes on Japanese supermarket shelves

Rapid growth

MM Mega Market Vietnam’s External Relations Director Tran Kim Nga said since TCC Holdings (Thailand) acquired Metro Cash & Carry Vietnam and changed its name to MM Mega Market Vietnam, selling Vietnamese goods through TCC Holdings’ supermarket chains in Thailand has become a central activity. The company has helped distribute more than 1,200 tonnes of dragon fruit and is assisting Vietnamese businesses in exporting other kinds of agricultural products via BigC Thailand supermarket chains.

In recent years, other retailers, such as Lotte, Aeon, Emart and Saigon Co.op, have participated in the project to increase the presence of Vietnamese goods in their global distribution systems. Total value of goods exported via these supermarket chains has amounted to several hundred million US dollars. These exports include agricultural, forest and aquatic products, processed food, and consumer goods.

Exporting via overseas supermarket chains enables domestic businesses to minimize intermediary costs and offers foreign consumers direct access to Vietnamese goods.

According to Lotte Mart Vietnam, VND1.3 trillion worth of Vietnamese goods were exported via Lotte Mart’s supermarket chains in 2016. Lotte Mart expects the export value will reach about US$2 trillion this year.

Vietnamese retailers have also taken active part in the project. Saigon Co.op Deputy General Director Nguyen Anh Duc said after joining hands in 2016 with NTUC Fair Price, a Singaporean partner, Saigon Co.op exported about VND45 billion worth of goods to different countries. Some kinds of Vietnamese goods have become familiar to Singaporean consumers.

Market information

Despite great potential, the presence of Vietnamese goods in foreign supermarket chains remains limited. Tran Kim Nga attributed this limitation not to quality but to a lack of information about market demand, as well as weaknesses in advertising and marketing. For example, Vietnamese farmers mostly grow large-sized dragon fruit, while Thai consumers prefer to buy small dragon fruit sufficient for one person. Due to the gap between supply and demand, the export value of this kind of fruit remains below expectations.

Sharing this view, Nguyen Anh Duc said market information is one of the most important factors for boosting the presence of Vietnamese goods in foreign distribution channels. Therefore, businesses need to increase research on consumer tastes and market demand. At the same time, they should be flexible in business management and maintain tight coordination with distributors. Suitable technologies should be applied to reduce production costs and ensure product quality and safety, he added.

Phuong Lan