Foreign Competition Worries Domestic Retailers in Vietnam

There're plentiful of growth opportunities for large retail chains in Vietnam. However, certain key obstacles need to be overcome by the industry in order to take on the likes of Big C and Parksons.

This opinion of the Enterprise Development Foundation was published in news by VietnamNews. Half of Chinese population is below the age of 30 with a fondness for spending their disposable income at modern retail outlets, where sales increased by 20% in 2005. EPIC Business Intelligence JSC General Director Pham Thanh Hung feels that the trend has generated lots of opportunities for local and foreign retailers, in the news on VietnamNews.

Vietnam is being eyed for its prime potential market by major international retail chains. Gmetro, Bourbon and Parkson are in a frenzy of opening new supermarkets in the country. Retail giants like WalMart, Carrefour and Tesco in the meantime are in negotiations for entering Vietnam's retail market.

The biggest challenge that Vietnam's traditional retailers faced was the air-conditioned retailing formats including supermarkets and hypermarkets. The popularity of modern retailing formats is increasing with convenience shopping for consumers. Supermarkets and hypermarkets went on with the expansion of stock-keeping units for both mass and premium platforms to offer high-quality products at affordable prices.

Strong development of foreign distributors and retailers in Vietnam is poised to entice more global retail giants in future years that may lead to problems for local companies in retaining their market share. WTO entry promises numerous opportunities for Vietnam's enterprises for entry into more world markets and new export markets.

The expectation of economic experts is an increase in overseas retailers entering Vietnam in the near future, alongside the expansion of the current giants, undermining the efforts of domestic retailers and contributors for securing market share. The need for domestic retailers is to concentrate on bettering their competitive advantages in addition to creation of new ones to rise to the challenges posed by foreign competitors.

A RNCOS research analyst is of the view that realization will dawn on most local retailers of a competitive showdown with bigger and better foreign firms in the coming years. Therefore, their chances of survival and those available to them are crucial. Two ways for local retailers to boost their operations to take on future competition are through expanded ties and stronger local distribution networks.

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Vietnam Retail Analysis (2008-2012)
Poland Retail Analysis (2008-2012)
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