Leading retailer Saigon Co.op, for instance, makes home delivery for purchases of VND200,000 or more. Few other retailers do.

Most supermarkets have just a few billing counters that leave customers standing in long queues, especially on weekends. Those without the patience to queue take their shopping elsewhere.

An official from the Ministry of Trade and Industry (MTI) points out that foreign retailers are very good at providing service.

Nguyen Ngoc Hoa, CEO of Saigon Co.op, warns that poor management is one of the biggest problems facing the domestic retail industry.

Efforts to improve their service have seen 130 retailers unite to set up the Association of Vietnamese Retailers.

They hope it will help them compete with foreign rivals.

Industry master plan

A master plan to develop the trade and distribution industry could be ready by 2010, an MTI official said, but added that only 10 of the country's 64 cities and provinces had submitted local plans.

The local plans include construction of wholesale markets and other commercial facilities.

However, the race to build whole-sale markets without planning for pitfalls is resulting in inefficient investment.

For instance, Saigon Trade Corp. (Satra) built a duty-free shop at the Moc Bai border with Cambodia. But later the local government licensed the Construction Corp., to build a similar shop next to it.

This forced Satra to buy out the rival shop. Soon after, a foreign retailer set up shop across the street.

Foreign players

Under its WTO commitments, the government agreed to allow foreign

distributors to set up retail joint-ventures starting earlier this year. From 2009, they can set up wholly foreign-invested businesses.

Korea's leading retailer Lotte began building a shopping center this month in Ho Chi Minh City’s District 7.

The German Metro Cash & Carry plans to open four more outlets - one each in Ho Chi Minh City, the neigh-boring Dong Nai Province, Hanoi, and the central city of Nha Trang.

It already has six outlets with combined annual revenues of $259.5 million.

Parkson retail group, a leading Malaysian shopping mall operator, plans to invest $70 million to open 10 stores in commercial hubs like Hanoi, Da Nang, Can Tho, and Ba Ria-Vung Tau.

It recently opened its second outlet in Hai Phong following its first in HCMC.

Other newcomers who are expected to have a major impact on the market include Wal-Mart and JC Penney of the US.

Source: ThanhnienNews.