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Obstacles block formation of supermarket joint venture

Update: December, 31/2013 - 09:20
Photo hanoimoi

HA NOI (VNS)  — Domestic retailers have failed to forge an alliance to compete with foreign rivals, experts have said.

Four large domestic retailers – Satra, Hapro, Phu Thai and Sai Gon Co-op – planned to build a large retail group, VDA, with a strong trademark that could compete with foreign trademarks and would be the driving force in the local retail industry. However, the plan fell through for many reasons.

Pham Dinh Doan, Phu Thai Group chairman, told Thoi bao Kinh Doanh newspaper that the greatest challenge had been acquiring land and infrastructure. Establishing the alliance required support from the government.

In addition, the state should provide support for logistics services to the group because these services are poor in the domestic market, stated Dinh Thi My Loan, chairwoman of the Association of Viet Nam Retailers.

Therefore, the group has planned to build a logistics system to complete the supply chain in the domestic retail market, but the group has faced difficulty in acquiring land to build warehouses in various provinces and cities.

Nguyen Thi Thu Hien, Hapro's managing director, noted that the four large retailers had the same target for launching the joint venture, but they did not have a unified management system for it.

Hoang Tung, the founder of the Pizza Home trademark, claimed the VDA was a joint venture amongst the four groups, but they each had a different business culture and varying business targets, so it was hard to achieve success.

However, just because the alliance was not successful does not mean the local retail industry cannot compete with foreign retailers, Tung explained.

A marketing expert said the revenue of local retailers has increased due to expansions of their retail system and attempts to approach more customers.

In addition, local retailers hold the advantage of knowing the shopping habits of domestic customers, whereas foreign firms have to conduct market studies for this information. — VNS

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