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Local retail firms face off with foreign rivals

Update: September, 26/2013 - 10:04
Vu Thi Hau

(VNS) Local entrepreneurs can expect business to grow in 2013 despite a slump in consumption earlier in the year, according to Nhat Nam Joint Stock Company (NNC) deputy general director Vu Thi Hau.

In a recent conversation with the media, the NNC executive spoke about challenges in the domestic market faced by its own supermarket chain, Fivimart.

Experts have considered 2013 a difficult year for retail companies. Additionally, large retail firms have opened more trading centres and supermarkets. What is your opinion on the situation?

This year has been a really difficult year for retail companies. Local supermarkets, including Fivimart, have rolled out promotions to increase consumption but we are expecting revenues similar or even lower than last year with foreign retailers entering the domestic market and opening trading centres, supermarkets and convenience stores, local retail firms are now facing even more competition.

What should local retail firms do to deal with this?

Local retail firms should develop their own strategies. They need to continue finding and expanding their market and closely cooperate with producers and suppliers to sell goods on the market at competitive prices.

This year, Fivimart has arranged to open five more stores in the centre of Ha Noi and cooperated with producers to develop products with the Fivimart brand.

What do you have to say about the challenges local firms face with location and staff?

For the retail industry, location is one of the most important issues. In many provinces and cities, foreign enterprises deliberately choose good locations to attract customers and additional capital from foreign investors.

Additionally, local firms are disadvantaged by skills shortages in advertising and product development while foreign firms bring significant expertise in those issues.

How can the local retail industry sustainably develop in the face of such fierce competition?

Viet Nam's retail firms face significant disadvantage in finance, staffing, professional knowledge and technology so they should try to address these weaknesses. They need support from the State at the policy level to empower them to compete with foreign rivals.

During the past years, we have expanded the Fivimart network but we face difficulty in competing with foreign companies who carry new goods and undercut local businesses with lower prices.

Fivimart urges both the Ministry of Industry and Trade; and the Ministry of Planning and Investment to develop a joint plan to support local retail businesses.

Meanwhile, the provinces and cities must report on their supermarket needs; i.e. the goods they need and the size of supermarket needed.

But most importantly, the retail industry needs the State to provide favourable policies. — VNS


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