Participants in a recent forum on international economic integration said that when foreign distributors penetrate the domestic market by getting involved in providing different kinds of high-quality goods at reasonable prices, they will attract a large number of consumers. As a result, small domestic traders and business circles will lose customers unless appropriate measures are taken. This fact is demonstrated by effective operations of the Thai small supermarket chains in localities. 

The impacts are both positive and negative. The challenge is how to increase positive impacts and how to raise domestic competitiveness.

A number of large distribution chains have been established in Vietnam such as a department store network by the Vietnam Textile and Garment Corporation (Vinatex), a supermarket network by the HCM City Cooperative Alliance and chains of shops and agents from large companies like Noodle Soup 24, Trung Nguyen Coffee and Family Taxi. In addition, there are sales services through telephone or the Internet and door-to-door services. 

However, Vietnamese consumers feel satisfied when shopping at foreign-owned supermarkets in Vietnam such as Big C, Metro and Cash& Carry. Cheap prices (retail prices equal to wholesale ones) are the most attractive thing for customers who are also impressed by the diversity of goods.

In fact, it is not always easy for foreign distributors to achieve success when gaining access to another country’s market. Most recently, Wall Mart- the well-known US distribution giant has to withdraw from the  Republic of Korea market as it failed to compete against domestic rivals.
 

The Republic of Korea’s experience is to only apply measures in accordance with WTO regulations thus allowing foreign distributors to set up in certain areas while providing favourable conditions for small enterprises to exploit the domestic market’s gaps to sell their products.

Meanwhile, most foreign supermarkets in Vietnam are licensed to operate in relatively good locations. A typical example is the Cash and Carry supermarket in HCM City which has set up more than 2,000 outlets after only several years of operation.