Local businesses seek way to win on home turf
(VOV) -Participants at an October 3 seminar on retails and investment policies raised their concern over the domination of foreign retailers who, thanks to their advantages in capital and technology, may defeat local ones.
Dr. Dinh Thi My Loan, Chairwoman of the Vietnam Retailers Association, said the modern retail sector is experiencing fierce competition between local businesses and foreign rivals. At present, no foreign retailers care about rural areas and traditional markets as these marketplaces are unlikely to generate huge benefit.
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Loan denied recent rumours that the local retail market is being cornered, affirming that domestic businesses are sharpening their competitive edge and proving effective operation.
She revealed that modern retail distribution accounted for only 25% of total market share, while traditional retail market is developing well.
According to the Ministry of Industry and Trade (MoIT)’s statistics, by the end of 2013, Vietnam has 8,546 markets of different types. Of the figure, around 1 million are in small size, mostly owned by households. The country has approximately 724 supermarkets and 132 shopping malls.
Regarding the development trend of modern retail channel, Pham Dinh Doan, Chairman of Phu Thai Group, analyzed that the coming signing of free trade agreement (FTA) and the Trans-Pacific Partnership (TPP) agreement will have more open market commitments and offer more opportunities for local retailers.
Apart from building technical barriers following WTO rules, Doan suggested that local firms should enter joint ventures with foreign partners and promote experience sharing in management and trademark development.
Nguyen Anh Duc, Director of Saigon Co.op supermarket chain, stressed that after opening up market in line with international commitments, consumers have been provided with multi choices. Foreign investment has helped lifted Vietnam’s retail market to a higher level, he said.
Local retailers should strengthen linkage, boost technology transfer and increase competitiveness to hold a firm foothold on their home market, Duc recommended.
Tran Nguyen Nam, an MoIT official, said in the future many foreign investors will get involved in the Vietnamese retail market, so domestic businesses should find way to gain success.
Dr. Loan, once again, affirmed that it is unnecessary to provide subsidy as local firms have become stronger. The core matter is how to ensure transparency in foreign attraction policies, she noted.