|Korea's leading retail corporation, Lotte Mart has just opened its fourth trade centre in HCM City and by 2020, Lotte Mart will have 60 outlets throughout the country.— Photo dddn
HCM CITY (VNS) — Vietnamese retailers risk losing the domestic market, which will soon be dominated by foreign ones, the Lao dong (The Labour) newspaper reported on Wednesday.
Currently, Viet Nam has about 700 supermarkets and trade centres, 40 per cent of which are owned by foreign retailers.
Officials at the Ministry of Industry and Trade, say that the domestic commodity market will see a growth rate of 14 per cent on average this year and next.
Looking at projections for 2015, total retail sales through modern distribution channels will have risen to 40 per cent, while traditional channels will retain the majority, with 60 per cent.
Insiders say Viet Nam is a growing potential retail market with a population of 90 million – as the average income per capita of Vietnamese people rises, so does retail demand.
New additions to the Vietnamese retail market from overseas, such as Lotte Mart, Aeon, and Parkson, illustrate the increasing appeal of the market.
Korea's leading retail corporation, Lotte Mart has just opened its fourth trade centre in HCM City and by 2020, Lotte Mart will have 60 outlets throughout the country.
Aeon, one of Japan's leading retail groups, recently opened its first branch in Viet Nam at the Tan Phu Celadon Mall in HCM City's Tan Phu District. The second branch, at the Binh Duong Canary mall is expected to open in October.
Established Malaysian department store chain Parkson, recently opened its ninth outlet in Viet Nam. Alongside HCM City, Parkson also has outlets in Ha Noi, and Hai Phong. The Parkson group recently revealed plans to open two or three outlets every year. The next phase is set to include Da Nang, Can Tho, Nha Trang and Bien Hoa.
Do Van Binh, chairman of Song Bac Joint Stock Co. said under the agreements of the WTO, as of January 11, 2015, Viet Nam will allow foreign retailers to set up businesses with 100 per cent foreign capital.
Moreover, when Viet Nam joins the Trans Pacific Partnership, the import tax rate will be decreased to zero per cent, benefitting consumers who will be able to access high quality products from US and Japan.
However this will pose risks and challenges for Vietnamese businesses.
Vu Vinh Phu, chairman of the Supermarket Association, said when TPP comes into effect, domestic businesses must actively reinvent themselves to improve the quality of their products and lower their prices to increase competition, if they do not want to lose domestic market to foreign retailers.
But similarly, Vietnamese businesses will be able to access advanced management technology brought over by foreign retailers, he said.
Some domestic retailers are increasing their expansion plans, such as the Ha Noi Trade Corporation (Hapro) and Fivimart. By 2020, Fivimart plans to open 30 outlets throughout the country. — VNS