Duo hope to take retail market by storm

Dinh Thi My Loan, general secretary of Association of Vietnam Retailers (AVR)

Saigon Co.op stepping into grand supermarket segment will inevitably entail changes to Vietnamese retail and distribution market share. True?

Increased visibility of modern retail and distribution forms matches the global development trend, so it should be propped up. Forming a grand supermarket is new to Vietnamese firms but it currently grabs special attention.

The hook-up between Saigon Co.op and NTUC FairPrice was planned for a couple of years. The recent launch of Co.opXtraPlus and in the upcoming time Co.opXtra proves that local firms have actually recognised  the model efficiency and confident with their investment ventures.

Grand supermarkets number only a handful in Vietnam at present and mainly belong to foreign invested enterprises, but I believe the birth of new ones will not create a counterbalance in the market.

Apparently, retail and distribution market is the target of both local and foreign companies. This is positive since Vietnam’s retail market has yet to be named among top 30 most attractive markets to foreign investors according to US’s A.T Kearney appraisals.

Does this mean the start of a new competition between local newcomers and established foreign incumbents?

There needs to be analyses based on full accurate statistics when appraising foreign players’ engagement in Vietnam’s retail and distribution market. However, such studies have not yet taken  place.

In fact, global players are pushing up grand supermarket model in Vietnam like Big C and Metro.

From the part of local firms, the AVR figures show that Vietnamese retailers are growing robustly in width and depth and poised for competing. Several years ago, when Vietnam began to execute World Trade Organization commitments on opening up the domestic market to foreign retailers and distributors scores of local firms wanted protection. They talk nothing about it now.

In action, firms have taken clear strategies. Some businesses took solidifying market position and holding their prestige towards customers as their top priority like Citimart, Maximark or Fivimark, some others made use of opportunities for network expansion like Vinatex, Nguyen Kim or Tran Anh.

The joint ventures between local firms and foreign players, mainly in the form of small- and medium-sized convenience shops, have proven less successful then expected. Does that make you worry about Vietnamese firms’ competitiveness in the grand supermarket model?

Forming joint venture is a good way to bring forth each party’s advantages. Businesses know the most the ventures they are contemplating.

In my view, the Vietnam’s retail and distribution still offers great room for development. Local companies need to find suitable ways to boost competitiveness and better their brand value.