Paying greater attention to distribution

08:02 | 26/03/2015 Trade

(VEN) - In the current context of a greater amount of domestically-made products competing with an influx of foreign retailers into the Vietnamese market, there is an urgent need to develop a better distribution system for Vietnamese goods. Asides from efforts by Vietnamese retailers to develop the domestic market through the Buy Vietnamese Goods campaign, more attention needs to be focused on distribution in order to improve the competitiveness of Vietnamese goods.

Paying greater attention to distribution

Expansion of domestic distribution channels

Vice Chairman of Vietnam Fatherland Front Central Committee and Deputy Head of Buy Vietnamese Goods Campaign Steering Committee Le Ba Trinh noted that after five years of implementing the campaign, Vietnamese consumers have changed their shopping behavior. Nowadays, Vietnamese shoppers give priority to purchasing domestically-produced goods over foreign products.

To obtain these results, domestic producers have made continual attempts to apply technological solutions to increase product quality and competitiveness. In addition, they have focused on building store chains while creating close ties with distributors such as supermarkets or commercial centers.

For its part, to support the producers, the domestic distribution channels have also strived to expand their businesses. The Saigon Co.op has developed its Coopmart supermarket network and chain of CoopFood convenience stores. In late 2013, the Saigon Co.op formed a trade joint venture with the Singaporean retailer NTUC Fair Price to muscle-in on the hypermarket business model.

Citimart also cooperated with Aeon and officially rebranded its 30 supermarket Citimart chain into Aeon Citimart. Under their partnership agreement, Aeon will help Citimart renovate the management of this new chain and rebuild their new brand together. The two sides will make use of each other’s advantages and strive to increase the number of Aeon Citimart stores to 500 by 2025.

At present, Vietnamese goods in distribution channels such as Coopmart, Big C, and Metro account for more than 90 percent of the total products. Many cities and provinces have organized trade cooperation programs to bridge the supply and demand for goods between localities which has helped bring Vietnamese agricultural products directly to consumers.

Strengthening distribution channels

Despite these successes, Vietnamese goods have, for the most part, only been distributed in the cities. In rural and remote areas, there have only been periodic mobile consignments instead of the establishment of a real distribution network. In addition, Vietnamese enterprises have not made the best use of wholesale markets, which are one of the biggest channels to deliver domestically-produced goods to localities. Therefore, to make the campaign more efficient in the future, one of the important solutions is developing the distribution network of Vietnamese goods to meet the consumer demand.

The domestic market project associated with the Buy Vietnamese Goods campaign in the 2014-2020 period was approved by the prime minister on April 29, 2014, and received the widespread support of distributors. According to Deputy Minister of Industry and Trade Ho Thi Kim Thoa, the project has created a good motivating force to increase the competitiveness of domestic distributors.

The project has encouraged Vietnamese enterprises to promote their business and investment activities, develop their trade infrastructure, and expand sale networks, especially in remote areas. It has also focused on implementing coordination programs among cities and provinces across the country to help promote local specialties and crafts across different regions. In addition, it has organized training classes for enterprises, cooperatives, and business households to increase their sale skills, while building Vietnamese brands and linking supply and demand.

In order to bring Vietnamese goods deeper into the distribution systems in rural and remote areas, the project has initiated a coordination program on a national scale between domestic producers and distributors to expand the coverage of Vietnamese goods. By 2020, the project has targeted building 100 pilot models on stalls selling Vietnamese goods called “Pride of Vietnamese goods”. It intends to implement these at markets, supermarkets, commercial centers, and districts in remote border areas. From this, it will build five pilot models based on the “Pride of Vietnamese goods” chain, which will take each Vietnamese product from the production stage to sales. These solutions are expected to strengthen the domestic distribution channels in the future.                

By Phuong Lan