HÀ NỘI – Deputy Prime Minister Trịnh Đình Dũng has asked ministries and authorities to help support local retailers while better managing the operations of foreign retail firms.

The wholesale and retail market is developing rapidly with large potential and attracting the attention of both local and foreign investors, according to a recent note from the Government Office.

Regarded as a sensitive sector, the retail market has been gradually opened to foreign investors following Việt Nam’s international commitments. However, management of foreign retailers has proven to be inefficient while there has been a lack of supports for local firms to expand their distribution networks, the note said.

In the note, Dũng called for management of foreign retailers to be tightened to ensure compliance with the law. In addition, the expansion of distribution networks of foreign firms must be kept in check.

The Ministry of Finance was directed to increase inspections of foreign wholesale and retail firms to prevent transfer pricing and collect taxes.

The Ministry of Industry and Trade was asked to aid local retail firms with land lease fees to promote their development.

Dũng also asked relevant ministries to draft a decree which would replace Decree 23/2007/NĐ-CP on the purchase and sale of goods by foreign-owned enterprises. The decree should be sent to the Prime Minister within the first quarter of this year.

Dũng said that the new decree should encourage foreign retailers to commit to distributing locally-produced products.

With a population of 90 million, around 40 per cent of which are urban citizens, and double-digit growth in total retails sales of goods and services since joining the World Trade Organisation in 2007, Việt Nam’s retail market has been attractive to foreign investors.

In recent years, the market has been entered by large retailers, including firms from Japan, Thailand and Korea, through the opening of supermarkets and acquisition deals.

According to the Việt Nam Institute for Trade under the Ministry of Industry and Trade, the retail market is set to grow by 11.9 per cent per year to reach a value of US$179 billion by 2020 from $102 billion in 2015.

Under the industry’s planning, there will be 1,200-1,500 supermarkets, 180 trade centres and 157 shopping centres by 2020. — VNS