International Providers Flock to Vietnam.
In the report “Vietnam’s retail industry analysis” RNCOS noted Vietnam’s retail industry infrastructure is in a state of rapid transition in 2007-2011. Any foreign provider investing in Vietnam is likely to be successful.
According to the report, most manufactures and leading giant retailers in Vietnam, such as Metro Cash & Carry from Germany running 8 supermarkets, are reaching annual growth up to 45 percent.
After eight years of operation in Vietnam, Bourbon from France has created a network of 6 supermarkets with the Big C trademark at Ha Noi, Ho Chi Minh City and Hai Phong. Another retail giant is Parkson, reaching growth of 35 percent after two years in Vietnam and planning to establish 10 more commercial centres.
Recently, Vietnam Unilever Company officially opened the most modern product distribution centre, with US $12 billion capital for construction, located in Vietnam-Singapore industrial zone of Binh Duong province. Mr Greg Sullivan, vice chairman of supply chain for Unilever Vietnam, said construction of the centre keeps Unilever on the forefront of the rapid changes in Vietnam’s market under WTO commitments.
RNOS economic experts predict that many foreign giant retailers will do business in Vietnam in coming years, and Vietnam’s retail market will rank third world-wide, behind China and India.
Local Providers: Cooperation to Competition
Some experts worry about fates of local enterprises facing rapid changes in the domestic market under WTO commitments in 2009. However, Vietnamese providers must strengthen themselves by improving both cooperation and competitiveness.
Mr Pham Dinh Toan, general director of Phu Tai Company Limited, a leading wholesale corporation in Vietnam, said it was high time Vietnamese providers paid attention to setting up great syndicates with the necessary competitiveness to dominate foreign groups.
Recently, four leading Vietnamese providers, Satra, Hapro, Saigon Co.op and Phu Thai group, associated with each other to establish the Vietnam Distribution Associate Network Development and Investment Joint Stock Company (VDA), with capital over VND6,000 billion.
The participants expect VDA will become a leading company in Vietnam distribution, because combines four joint stock companies. Saigon Co.op is very good as a wholesale provider, accounting for 50 percent market share in Ho Chi Minh City. Hapro and Satra, with long experience and developed infrastructure systems, hold significant market share in both the South and the North. Phu Thai owns 100 supermarkets, 5,000 wholesale units and 50,000 retail stores nationwide. Mr Nguyen Huu Thang, Hapro general director, believes the cooperation among the four above enterprises creates the strength of a “bundle of chopsticks” which will be difficult for foreign enterprises to fight.