Businesses urged to have effective strategies for retail market

Domestic businesses need to rapidly improve their competitiveness and formulate suitable and effective business strategies as the deadline for Vietnam to open its retail market under WTO commitments looms, according to a senior government official.

Cong Quynh Co-op Supermarket in HCM City

Speaking at discussions regarding the opening of the distribution market, which took place in Hanoi on October 31, Deputy Minister of Industry and Trade Nguyen Cam Tu predicted that the opening of the retail market from January 1, 2009 will create favourable conditions for many foreign distributors who possess greater financial muscle and modern distribution methods to penetrate deeper into the Vietnamese market, thus having the knock-on effect of helping to develop domestic distribution systems.

However, domestic businesses will also face an increasing number of difficulties and challenges as foreign groups will be permitted to establish wholly foreign-invested companies, increase their investments and open new branches and outlets in Vietnam.

With this in mind, Vietnam’s ministries, localities and enterprises have spent a lot of time discussing a range of measures to improve the competitiveness of domestic businesses and to prepare legal foundations for the licensing of retail and wholesale establishments as well as strategies to develop local distribution systems.

According to the MoIT, Vietnam’s retail market has developed rapidly over recent years with total revenue reaching 44 billion USD in 2007, a 25 percent increase against the previous year. In the first ten months of this year, this figure stood at 782 trillion VND (46 billion USD), up 30.7 percent compared with the same period last year.

Vietnam now has around 400 supermarkets, 60 trade centres and close to 2,000 convenience stores. By 2010, the country expects to see the number of supermarkets to increase by 62.5 percent and trade centres to increase by 150 percent.