More global retailers eye Vietnamese market
06/08/2010 - 163 Lượt xem
Not until AT Kearney rated Vietnam third in the 2006 Global Retail Development Index, have big foreign investors and retailers made their first steady footprints into the Vietnamese market, of which Metro Cash and Big C are typical examples. With nearly 15,000 high-quality products, about 90,000 Metro Cash cardholders can buy commodities with lower prices of between 10-15 percent than in other domestic supermarkets.
In Hanoi, if local supermarkets such as Intimex, Citimart and No 5 Nam Bo Electronics await sales promotion from suppliers during special occasions such as summer holidays and the New Year Festival, foreign-invested supermarkets can launch promotion sales at any time.
When Vietnam was severely affected by the bird flu epidemic last year, and the current foot-and-mouth disease, foreign supermarkets such as Metro Cash and Big C capitalised on the situation by importing safe food to meet local people’s demand.
In addition, local consumers benefited from these foreign retailers when they offered distribution services through websites in both Vietnamese and English. These retailers also offer customer care services by sending their staff to customer homes.
Why do they believe in the Vietnamese people’s shopping spree? A recent survey showed that most consumers were born in 1970s and 1980s, and like shopping in leading supermarkets. Therefore, big retailers are determined to enter Vietnam to make the most of the market by snapping up ideal places in big cities.
According to the Ministry of Trade, modern supermarkets have been built in 30 out of the total 64 cities and provinces nationwide. Most of them are located in big cities, but the scale of these supermarkets is limited, alongside poor management skills and old business practices. Retail goods at these supermarkets make up 10 percent compared to 40 percent at markets and 44 percent at traditional shops.
Meanwhile, world leading distributors such as Walmart of the US and Carrefour of France plan to expand their retail services across Vietnam. Lotte of the Republic of Korea, Tesco of the UK and Dairy Farm of Singapore have applied for operations in Vietnam. Parkson from Malaysia recently opened its first shopping centre in Ho Chi Minh City and plans to develop nine other similar supermarkets in Vietnam.
Big C, Metro Cash and Parkson also pledged to open more similar centres and supermarkets in big cities across the country.
Pham Chi Lan, a member of the Government’s Research Board, said the traditional distribution network is facing tough competition from the modern one as powerful global distributors and Vietnamese businesses are growing very fast. She noted that there is no denying that new Vietnamese retailers are mostly agents rather then genuine retailers, therefore it is difficult for them to get the benefits from capital recycling.
According to the Domestic Market Policy Department under the Ministry of Trade, as a result of the competition, the market share of the traditional distribution network will be narrowed, leading to a fall in the proportion of domestic trade.
Expanding links and strengthening distribution networks are considered the optimum solutions that domestic retailers are seeking to apply. Under competition pressure from foreign retailers such as Metro Cash, Big C and Parkson, the only way for domestic retailers to exist is to join hands together to increase their competitiveness.
In addition to modern supermarkets, Vietnamese enterprises plan to build supermarkets for workers and low income earners.
Source: VOV news 11/06/2006
