Vietnamese retail market is likely to grow 23% to US$ 43.7 Billion in 2007 due to strong competition. It has attracted foreign investors also, thus increasing scope for growth.
Phan The Rue, Chairman of recently established AVR (Association of Vietnamese Retailers), believes that the retail market in Vietnam may grow up to 23% to US$ 43.7 Billion in 2007. He attributed this growth to the increasingly intense competition, as reported by Vietnam Net.
Vietnam became a World Trade Organization member in early 2007. According to Phan The Rue, the country remains committed to opening distribution channels, so that the market does not remain dominated by the local companies. It has, therefore, now become a probable destination for international retailers and multinational corporations, which has increased both the scope and threat in the market.
Phan The Rue said in a statement published by Vietnam Economy, “Domestic companies have to retain their position by improving on competitiveness and grasping development trends of the market to apply suitable business strategies and modern management methods”.
Truong Dinh Tuyen, the Ex Minister of Trade, shared this view. He said that in order to compete successfully with the foreign distributors, the local retailers would, at the very beginning, have to focus on investments on the distribution outlets, as reported by Vietnam Economy. He also added that the companies would have to upgrade their managerial proficiency, and invest more in developing professionally inclined human resource sector.
Big competitors like Metro, Dairy Farm and Wal-Mart are attempting to establish themselves in Vietnam. Therefore, it becomes necessary for the local companies to co-operate with each other. The biggest challenges that they face are poor employee training and lack of information technology. Foreign retailers have better experience and expertise in planning, employee training and capital mobilization. The experts are, therefore, cautioning against the foreign companies, which are threatening domestic companies.
According to a Senior Research Analyst at RNCOS, “It is not surprising that the Vietnamese retail market is being targeted by many global retail giants. The Vietnamese market has been very stable and showing good results from the past five years. Vietnam’s move to open its retail market is also providing the Vietnamese enterprises’ opportunity to become stronger and investments of foreign and domestic investors have strengthened the retail market”.
Related Market Research Reports:
Vietnam Retail Analysis (2008-2012)
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Booming Retail Sector in India
