Supermarkets stock more imports as retail war heats up

Shoppers who visited Big C in early July were surprised when seeing an ‘island of dairy products’ near the entrance door. 

The cartons of soy milk were not from Vinamilk or Vinasoy, the well-known soy milk producers. Their name: ‘Soy secretz’, an imported product. 

Observers said this could be seen at other foreign-owned supermarkets as well. Imports are heaped up to create ‘islands’ and ‘towers’ located at the center of the supermarkets. 

At Aeon, Japanese-made goods are arranged in a chain for customers to pick up easily.

At South Korean Lotte, Japanese Aeon, Thai BJC and French Auchan, many imported products have been put on shelves next to domestic products.

After taking over Metro in 2014, BJC, the new owner of the retail chain, stated that Thai products would account for 60% of the products at the supermarket.

Pham Trong Nhan, a NA Deputy from Dong Nai, warned that once foreign retail groups dominate the domestic market, this will cause serious consequences to domestic production. 

Dinh Thi My Loan, chair of the Vietnam Retail Association (VRA), said VRA has asked for the Prime Minister’s permission to set up a multi-ownership retail group of Vietnam. 

The model was first initiated 10 years ago but the plan failed. The businesses which got involved in the plan were the Hanoi Trade Corporation (Hapro), the Saigon Trade Corporation, Phu Thai and Saigon Co-op.

If the group is established, it would have revenue of US$4-5 billion a year, according to Loan.

The Domestic Market Management Department under the Ministry of Industry and Trade (MOIT) estimates that 97% of the domestic retail market is still in the hands of Vietnamese enterprises. Foreign enterprises mostly target modern retail channels which account for 3.4% of the retail market share.

At Big C, trolleys stay in long queues at 20 counters. Most buyers show membership cards when making payments.

Not far from the Soy secretz ‘island’ a small stall of The Gioi Di Dong has been replaced with the stall of Nguyen Kim, a business with a 49 percent stake held by Thai investors.

According to the 2016 AT Kearney GRDI report, six out of 20 potential markets were in Asia. The leading potential markets were China, India, Malaysia, and Indonesia, while Vietnam was the eleventh.