Speaking at a recent business roundtable to retailers, Vo Van Quyen, deputy director of the trade ministry’s Domestic Market Policy Department, said categorically that despite its World Trade Organization (WTO) accession Vietnam would only open up its retail market step-by-step. So, there would be time for local distributors to prepare for the competition.

But the retailers, mindful of their weaknesses compared international operators, especially with regard to size, have begun to make expansion plans.

The country’s leading retail chain Saigon Coop Mart seeks to expand its 15 outlets by opening stores in all 64 provinces.

It has invested US$1.5 million in improving its IT-based supply chain management which, according to its general director Nguyen Ngoc Hoa, played a vital role in the retail business.

It plans to boost cooperation with firms nationwide to set up supermarkets and wholesale centers.

The G7 Trading and Service Co. Ltd., an arm of Trung Nguyen Coffee known for its instant coffee brand G7, is joining hands with retailers and wholesalers to set up the country’s biggest supermarket chain.

The $395 million project is in the final stages of preparation and will be completed by July with the opening of the first 500 outlets. The number will go up to 10,000 by 2010.

G7 sought to develop the biggest distribution network in Vietnam with a view to enhancing the competitiveness of local distributors, Dang Le Nguyen Vu, its general director, said.

The Saigon Trading Corp., or Satra, has similar plans.

Dao Ngoc Tam, a company executive, said it would continue to cooperate with domestic enterprises to develop markets and outlets in the countryside besides expanding operations in HCMC.

The state-owned firm plans to build five supermarkets and warehouses and two shopping plazas in addition to its Binh Dien wholesale trade complex near HCMC which is under construction.

Satra has also opened a supermarket in the Mekong Delta province of Tien Giang.

Partners, not rivals G7’s Vu said developing a modern distribution network would be a challenge for Vietnamese retailers while international rivals were experienced in inventory management, marketing, and negotiating with retailers.

Local distributors should team up instead of operating individually if they were to take on international giants, he said.

Other distributors agreed saying it would be easier to resolve difficulties if there was such cooperation.

Reported by Trung Binh – Translated by Ha Viet

Source: Thanhnien news