Vietnamese retail market down in global rankings

Vietnam has been removed from the list of the most attractive retail markets, according to a recent report from A. T. Kearney, a US-based global management consulting firm.

The report on the 2012 Global Retail Development Index (GRDI) shows that Vietnam has consistently dropped in the ranking, from its top place in 2008 to 23rd position last year, and it is no longer in the top 30.

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Big sales at supermarkets

Dr. Dinh Thi My Loan, Vice Chairwoman and Secretary General of the Vietnam Retailers Association, says Vietnam’s drop in the rating was due to a decline in revenue of the world’s top ten retailers, whose growth rates stood at only 1.6-1.8 percent at the end of last year as a result of high unemployment rates and the debt crisis in Europe.

According to a recent report from the Hong Kong and Shanghai Banking Corporation (HSBC), the domestic retail market, which was thriving in the past, is shrinking in the face of a sharp increase in fuel prices and rising production costs.

Loan says the problem is that most small-and-medium-sized enterprises (SMEs) find it difficult to access bank loans.

To help them through a hard time, Loan stresses the need to evaluate the impact of inflation and deflation on each local retailer, and the entire retail sector, from different angles in order to deal with the situation. For their part, Vietnamese retailers should be aware of what is impacting on the operational structure of the retail sector as well as the shopping habit of consumers, she says.

Loan suggests domestic retailers focus on reducing costs, managing risks and improving customer-care services, as well as building the brand names of their products through sales and marketing activities.

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Dr. Dinh Thi My Loan

In addition to seeking new foreign markets, Loan says, Vietnamese businesses should devise marketing strategies and plans for their retail outlets, including large trade centres, major supermarkets, specialty shops and discount stores. They need to learn experience from successful retail models in other countries such as the Republic of Korea, Thailand and Indonesia which have developed many mini-supermarkets catering for local consumers.

According to Loan, smart retail marketing based on scientific research and advanced technology has led to the establishment of online shopping models and customer-care networks.

She reveals that VinatexMart, Vietnam’s biggest garment and textile agent, has opened nine new supermarkets nationwide since the beginning of this year, bringing its total number of supermarkets to 70. Other retailers such as Satra, Saigon Coop Mart, HaproMart, Intimex, Fivimart, Fahasa and Nguyen Kim electronics are also busy expanding their distribution networks for local retailers to achieve a steady growth in the near future.