Drafters have clearly divided the strategy into two phases. The first half, for 2006-10, focuses on improving the assembly market systems at regional and provincial levels. The second half, titled the "acceleration" period, will focus on in-depth trade development and growth quality.

During the first phase, new trade centres and supermarkets will be established in major cities such as Hanoi, HCM City, Hai Phong and Can Tho. According to the draft strategy, the next five years would also see the introduction of over-the-counter trade in agricultural produce, and e-commerce would be used in about 60% of large scale enterprises.

Specialised trade corporations will be established to promote the development of domestic trade activities on a large scale and to gradually progress from passive to active roles in influencing production.

To realise these goals, drafters said it was necessary to create incentives in land, finance, and credit for enterprises investing in technical infrastructure for trade. Regulations on OTC transactions would also govern trading activities.

For the second phase, once Vietnam opens its distribution market, drafters worked out several major tasks.

Markets in rural areas will be considered key distribution channels, which, together with a system of retail stores and warehouses, will create a favourable circulation network for agricultural produce, food and manufactured consumer goods.

During this period, retail sales via modern models such as supermarket and e-shopping should account for about 40% of the total retail sales. Trading floors for agricultural produce will be developed as well.

Hoang Tho Xuan, director of the Domestic Market Policy Department under the Ministry of Trade, said it was high time for local business people to build large competitive distribution networks or they wouldn't survive. Vietnamese retail trademarks have been having a hard time to do effective distribution because of weak financial standing and poor business technology.

Meanwhile, a series of large foreign retailers such as Wal-Mart (US), Carrefour (France) and Tesco (UK) are eying Vietnam as a potential new market.

Vietnam ranked eighth in the 30 fastest growing retail markets worldwide, according to ATKearney - a consultant company.

Economic observers said the Government's open policies and the country's high consumption potential (with 83mil people) were attractive to major retail chains like Big C, Metro Cash & Carry and Parkson, all of which were already present in Vietnam.

The General Statistics Office's figures showed that total domestic retail sale turnover last year reached VND335,000bil ($20.9bil).

A survey by the Vietnam High-Quality Goods Club found that this year, consumer spending was 18.4% higher than the same period last year.

Next month, a new domestic distribution system and retail chain worth VND6.1tril (US$395mil) will be launched by the G7 Trade and Service Company. Dang Le Nguyen Vu, chairman of G7's management board, said the G7 Mart aimed to become Vietnam's number-one distribution system as a counterbalance to foreign distributors and to assist Vietnam's trademark development.

There were 200 supermarkets, 30 trade centres, some 1,000 self-service stores and 10,000 smaller markets currently in operation nationwide, according to the Trade Ministry. Major local retailers include Saigon Co-op Mart, Intimex and Vinatex.

Source: Viet Nam News, 01/03/2006