Over 70 per cent of Thiên Long's revenue comes from the GT channel with traditional stores. — Photo courtesy of Thiên Long Nghi Sơn

HÀ NỘI — As the home market sees a rapid shift in consumer behaviours, domestic firms have promoted integration of modern and traditional distribution systems as a crucial solution to increase competitiveness.

The ability to connect with consumers across diverse MT and GT channels will ultimately define the leaders in the rapidly changing domestic market.

MT stands for modern trade, a form of contemporary commerce or a modern distribution channel with types of hypermarket, supermarket, convenience stores and e-commerce. While, General Trade (GT) is known for traditional product distribution with markets in residence regions in urban and rural areas or small outlets of business households.

The general director of Thiên Long Group Corporation, Trần Phưong Nga, a leading company in Việt Nam's stationery industry, said Thiên Long operates a vast business network across the country, with 55,000 points of sale.

Nga emphasised the importance of the MT channel, where product presentation is paramount to maintaining brand identity. Thiên Long places a focus on making products visually appealing, ensuring they stand out in the competitive retail environment.

Meanwhile, the GT channel has a different role in the company's strategy. Nga described the GT channel as a revenue maker to support investments in other distribution channels.

With over 70 per cent of Thiên Long's revenue coming from this channel, the company is restructuring and evaluating the effectiveness of each outlet across its GT channel.

This analysis helps identify regions that are underperforming, allowing the company to address these gaps and share success stories from more successful areas to encourage growth across the network.

Nga pointed out that their strategy to elevate the visual appeal of GT sale points, mimicking the high standards seen in MT outlets.

This initiative helps improve the GT store’s aesthetics, which in turn attracts more customers, benefitting both the store owners and the company’s overall sales.

Recent surveys have shed light on the increasing role of emerging enterprises in improving their distribution networks.

A study conducted by the Vietnamese High Quality Goods Business Association found that more than 44 per cent of enterprises have achieved nationwide coverage.

These companies, often focused on exporting to international markets with demanding standards, have seen significant improvements in market penetration.

Nguyễn Văn Phượng, who oversaw the survey, highlighted that while shopping activities in traditional markets have slowed down in recent years, the GT channel remains the highest in consumer spending.

The reason for this is that supermarkets and other modern retail outlets have not fully reached rural areas. Additionally, online shopping, which accounted for less than 10 per cent of consumer purchases in previous years, now represents 13 per cent in the food industry alone.

This increase reflects broader consumer adoption of multi-channel shopping habits. Of which, customers research product information at online channels, but often make purchases offline.

The trend toward multi-channel shopping has become more pronounced as consumers seek convenience and variety in how they shop.

According to a survey by QandMe Market Research, traditional commerce remains the most widely used by 96 per cent of consumers, while supermarkets and convenience stores account for 69 per cent.

Online shopping, however, is used by 35 per cent of respondents, with platforms like Shopee, Facebook and TikTok leading the way.

The survey also revealed interesting differences between urban and rural shopping habits.

Urban consumers tend to shop at supermarkets and online stores more frequently, while rural residents still prefer local markets.

Online shopping is notably more prevalent in urban areas, where 42 per cent of consumers engage in e-commerce, compared to 32 per cent in rural areas.

In addition, younger consumers are more inclined to use supermarkets and online shopping, whereas older individuals tend to stick with local markets. High-income groups also show a preference for shopping across diverse types of stores.

Experts argue that domestic enterprises' competitive advantage in today’s market lies in their ability to effectively manage and optimise distribution channels.

However, a crucial factor in this battle is the quality of the products themselves. No matter how advanced a company’s distribution system is, its products must meet consumer expectations to stand a chance in the competitive market.

In industries like food, competition is often fierce as companies try to capture the purchasing power of consumers who are becoming more price-sensitive due to tightening budgets.

Ensuring that distribution channels are easy to access and products are readily available is essential for any company seeking to maintain consumer interest and loyalty.

The current market environment is highly competitive, with many challenges such as slow growth, difficulty adapting to rapidly changing distribution systems, and high distribution costs.

So, these businesses are required to continuously innovate and redesign their distribution strategies. The enterprises that are able to integrate diverse distribution channels and meet consumer demands will have a distinct competitive advantage. — VNS