HA NOI — Building a modern and efficient distribution-retail industry is the only way to become a developed economy, according to Dinh Thi My Loan, vice president and general secretary of the Viet Nam Association of Retailers.
|Customers shop at an Intimex supermarket in Ha Noi. Experts have said developing a modern distribution-retail industry would effectively promote the economy. — VNA/VNS Photo Quang Quyet
"Developing distribution channels should focus on infrastructure," she said.
However, challenges remain and include the transition from traditional definitions, structures, systems and business practices to an effective commercial industry with high productivity, modern technology and oriented-consumers.
According to the association, the small and ineffective market, coupled with poor purchasing power, offers additional problems. The modern market also makes up only 20 per cent of the national platform with figures ranging from 40-42 per cent in HCM City and 13 per cent in the capital.
Retail companies have also been weakened in terms of professional, long-term strategy, financial and logistic capacity and level of competitiveness.
However, Loan noted that distribution-retail was a potential service industry with high added value and wide spill-over effects.
The Government has implemented "the policy to encourage companies and individuals in all economic sectors to do business in distribution-retail areas and develop human resources".
As part of Viet Nam's Trade Development in 2011-20, the growth rate of overall retail sales and service revenues is expected to increase with an average of 20 per cent and 21 per cent per year during 2011-15 and 2016-20.
A relatively young population exposed to the internet, television and travelling would necessitate increased retail consumption, especially amongst those with modern life styles interested in high technological products.
Furthermore, urbanisation would also help increase the need for convenience and time saving, Loan said, asserting that the market still had much room for both overseas and domestic investors.
She said that Vietnamese consumers not only cared about reasonable prices but also freshness of products, promotion activities, safety, friendliness and caring.
According to consultancy and global market analyst RNCOS, total revenues will reach US$85 billion in 2012.
The Vietnamese retail industry has asserted its role in the country's economy.
Luong Van Tu, former deputy minister of Trade, said that the domestic distribution-retail industry had developed very fast and helped contribute to socio-economic development.
The contribution of wholesale and retail sales to the GDP has been increasing over the past few years, accounting for a big share in Viet Nam's economic sectors (13.32 per cent and 14.43 per cent in 2005 and 2010, respectively).
The establishment of supermarkets, shopping centres and convenience stores had modernised the habits of Vietnamese customers, he said.
In the past few years, modern retail models have continued to develop strongly in Viet Nam. By May last year, the country had nearly 640 supermarkets, 100 shopping centres and, by the end of 2010, nearly 8,600 markets.
The traditional retail channel has also changed in terms of quality under pressure from competition. — VNS