Retail firms see pressure to compete
Retail firms see pressure to compete
The pressure from growing foreign investments into the Vietnamese retail sector is forcing local retailers to improve their competitiveness in order to take on foreign rivals, a conference heard yesterday.
At the conference held by the Viet Nam Institute for Trade in Ha Noi, experts said that 2016 was a year full of opportunities and challenges for the Vietnamese retail sector, which was opened fully to wholly foreign-invested firms since the beginning of 2015 following commitments to the World Trade Organisation.
The landing of foreign retailers on Vietnamese shores was inevitable, given the large untapped potential of the market with a population of more than 90 million, 60 per cent of whom were young consumers with high shopping demand and improving purchasing power. The retail market was expected to scale from US$102 billion in 2015 to $179 billion by 2020, making it a fertile land for investments.
"If domestic firms do not improve their competitiveness, they can hardly afford to compete with foreign retailers," Ngo Tuan Anh from the National Economics University, said. He said that the retail market was undergoing a clean-up and also offering opportunities to Vietnamese firms to participate in the global supply chain.
However, it was critical to develop a distribution network with competitive prices and appropriate planning in order to protect market shares and promote the distribution of locally-produced goods.
Le Huy Khoi from the trade institute said that Vietnamese retail firms should focus on developing supermarkets specialising in distributing certain products such as the electronics store chains of FPT, Tran Anh or The Gioi Di Dong.
Khoi said that local retailers should not ignore the traditional market which remained an important shopping channel for the Vietnamese due to their age-old habits.
At the conference, Nguyen Duy Hung, deputy director of the Ministry of Industry and Trade's Domestic Market Department, said that the ministry proposed to Prime Minister Nguyen Xuan Phuc that he approve a programme to support small- and medium-d firms in using the distribution network throughout 63 provinces and cities.
