Vietnam minister says not to worry about local retailers losing at home
Vietnam minister says not to worry about local retailers losing at home
Vietnamese retail companies are still developing well and there are no worries they will lose to foreign rivals on their home turf, Minister of Trade Vu Huy Hoang told lawmakers during a Q&A session on Monday.
Hoang is upbeat about the development of local retailers, although Nguyen Ngoc Hoa, who represents Ho Chi Minh City, said in his question to the trade minister during the National Assembly session in Hanoi that foreign retailers are increasing their market dominance.
International retailers are opening more stores and supermarkets, and at the same time, acquiring retail and supermarket chains operated by Vietnamese firms, Hoa said.
“So would the minister please tell us how the domestic retail system will develop given the current situation … Will Vietnamese retailers lose on home soil, especially when Vietnam joins free trade agreements with other countries?” the Ho Chi Minh City lawmaker asked.
In response, minister Hoang said retailing is a “sensitive sector,” and Vietnam seeks to open the market in steps to create favorable conditions and provide time for local businesses to develop and compete with international rivals.
Vietnam’s retail revenue topped VND2,700 trillion (US$127.08 billion) in 2013, and the figure is expected to reach VND3,000 trillion ($141.2 billion) this year, according to the trade minister.
There are currently more than 900 retail facilities in Vietnam, and only 70 of them are operated by foreign companies, Hoang said, adding that more than 800 of the remaining ones are under the management of leading Vietnamese retailers such as Saigon Co.op or Saigon Trading Group.
Foreign retailers only accounted for 3.4 percent of total retail revenue in 2013, but they posted the strongest growth, more than 21 percent, economic newswire The Saigon Times Online said, citing data the Association of Vietnam Retailers released at a forum in Hanoi last month.
Retail sales from modern distribution channels such as supermarkets accounted for only 25 percent of retail revenue, while 75 percent came from traditional channels such as small markets, grocery stores and home shops, according to the association chairwoman, Dinh Thi My Loan.
Many domestic chains such as Co.op Mart, Fivimart, Intimex, and electronics stores including Nguyen Kim, Tran Anh and Pico have an established reputation among consumers, and this is “only some evidence of the strong development of Vietnamese retailers,” The Saigon Times Online quoted Loan as saying.
“Vietnamese retailers also have an advantage against their international rivals, which is a close relationship with local suppliers,” she said.
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