Retail market moves towards modernisation

Many giant international retail groups such as Auchan, Robinson and Walmart are likely to set up more convenience stores, supermarkets and big commercial centres in Vietnam when the country completely opens its retail market next year, said the Vietnam Business Forum Magazine (VBF).

Vietnam's retail market is changing extensively, becoming more modern and integrated. In the first ten months of 2014, total retail sales nationwide reached nearly 2,400,480 billion VND, up 11.1 percent compared to the same period of 2013. 

Total retail sales of goods and services for 2014 are projected to reach 2,970 trillion VND, up 11.3 percent compared to 2013.

According to the Vietnam Retailers Association, as of 2013, Vietnam had about 724 supermarkets, 132 commercial centres, a few hundred convenience stores, nearly 9,000 markets of various kinds and about 1 million family stores. 
By 2020, the country is expected to have about 1,200-1,300 supermarkets, 180 trade centres and 157 shopping centres. Currently, this type of distribution is claiming about 25 percent of the Vietnam distribution market.

According to Nguyen Tien Vuong, Deputy General Director of Hanoi Trade Corporation (Hapro), in recent years, businesses have started to conduct more drastic measures to renovate, construct and expand trade infrastructure systems in the city as well as some northern provinces . So far, Hapro has had 2 HAPRO Shopping Centres, 3 Market Centres, 40 supermarkets and HaproMart convenient stores, 44 Haprofood shops selling guaranteed products and other specialised store systems.

According to Le Viet Nga, Deputy Director of the Department of the Domestic Market (Ministry of Industry and Trade), local enterprises have recently expanded distribution channels in order to get closer to consumers across the country. A notable example was Vinatex with the chain retail supermarkets Vinatexmart. Besides Vinatexmart, the member units of the group such as Viet Tien, Garment 10, Duc Giang, Hanosimex and Phong Phu also actively opened stores and dealers to introduce products into all provinces and cities across the country. As of 2013, there had been 4,125 stores (a 4 percent increase compared to 2012). In 2014, this figure is expected to reach 4,286 stores.

Sharing experiences doing business in Hanoi , Dang Thuy Ha, Customer Director of Nielsen Vietnam in the northern region, said the retail sector was ushering in a new era. Shopping trends in the digital era tended to steer toward e-commerce with modern technology. Vietnamese retailers should focus on category management and services such as loyal customer cards to catch up with the development trend of regional modern sales channels.

According to the Vietnam Retailers Association, although foreign investors in the retail sector account for only 3.4 percent of the businesses involved in this sector, they have gained the strongest growth rate, reaching over 21 percent. The competition between domestic and foreign enterprises has been getting fierce, but it does not mean that domestic firms are losing their “home ground” or falling into a passive situation. 

Chairperson of the Vietnam Retailers Association Dinh Thi My Loan was quoted as saying that foreign firms getting into Vietnam 's retail market are often widely advertised, so people think that they have a strong presence. In fact, however, modern retail channels account for about 25 percent only and almost all foreign retailers are investing into these channels alone.

Some local strong retailers indicated by Loan include Pico, Nguyen Kim, Tran Anh. Reputable networks of local businesses such as Fivimart, Intimex and Coopmart also have more advantages than foreign competitors. 

According to David Alan Treadgold, Member of the Advisory Council of Oxford Institute of Retail Management, Vietnamese businesses should prepare themselves fully in terms of technology, human resources and management to cut costs and improve competitiveness.
VNA/VOV.VN