14:56 | 10/07/2017 Society
(VEN) - The Global Retail Development Index (GRDI) report recently issued by the US consulting firm A.T Kearney shows that this year, Vietnam moved ahead five places to rank sixth among the 30 most attractive retail markets worldwide.
|Domestic retailers need to enhance their competitiveness|
Vietnam joined the list of top 30 most attractive retail markets in 2008 and has maintained its position there, except for 2012.
The report attributes the attractions of the Vietnamese retail market partly to Vietnam’s open investment regulations.
Specifically, in 2015, the government allowed retail businesses to be established with 100 percent foreign capital - this has attracted global retail giants to Vietnam. Other reasons include Vietnam’s young population with high purchasing power and high demand for goods. According to the Ministry of Industry and Trade, total retail sales have grown rapidly for many years and reached VND1,600 trillion in the first five months of 2017, 10.24 percent higher compared with the same period last year.
The domestic retail market has attracted a number of global retail giants. The Japanese firm AEON has invested US$500 million in Vietnam; the TCC Holding Group (Thailand) has acquired Metro Cash & Carry at a cost of US$655 million; the Central Group has acquired the Big C supermarket chain at a cost of US$1.14 billion. Many other retail firms also intend to add shops in Vietnam, such as FamilyMart which expects to have more than 800 shops by 2020, and Lotte Mart - 60 shops.
However, Vietnam’s position among the world’s most attractive retail markets requires Vietnamese retailers to compete fiercely with foreign firms with greater potential in all aspects.
At a recent seminar on Vietnamese goods in the competition to join modern distribution channels, Vietnam Retailers Association President Dinh Thi My Loan said the association has encouraged domestic retail companies to join forces to enhance their competitiveness. The association has also requested relevant state authorities to create favorable conditions for domestic retailers to join linkages between manufacturers and traders.
In the opinion of Hanoi Supermarket Association President Vu Vinh Phu, retail companies should take the initiative in setting up linkages with farmers to build closed chains involving all stages from manufacturing to sale in order to reduce prices. This is very important to enhance their competitiveness.
Phu emphasized that retail companies should be given preferential loans to build their distribution networks. Appropriate mechanisms should be created to promote strong retailers, such as VinGroup and Saigon Coop, which can guide smaller businesses. It is hoped that such measures will help Vietnamese retailers withstand the competition with foreign rivals in the domestic market.
|The government recently assigned the Ministry of Industry and Trade to preside over and coordinate with other institutions in supporting the development of domestic distributors and retailers, helping enhance their competitiveness.|