Metro Cash & Carry Vietnam managing director Philippe Bacac describes how the firm has spent a decade serving professional customers with the finest produce via developing quality supply chains and helping local producers and suppliers reach world-class quality standards.
Please give us a brief outline of Metro’s development and success in Vietnam since its first outlet opened in Ho Chi Minh City in 2002.
Metro is the international leader in wholesale exclusively for professional customers such as hotel and restaurant operators, catering and hospitality firms, independent small retailers, institutions and offices. Since the opening of our first wholesale centre in Vietnam in 2002, we have grown to 19 outlets nationwide serving around one million registered customers. Each centre creates employment opportunities for some 400 people.
Cooperation with farmers is another great success. We have trained 20,000 fishermen, farmers, producers and provincial officers to achieve international quality standards such as Global GAP (Good Agriculture Practice Certification), the most widely recognised and trusted standards for farm assurance and food safety. Certified farmers are benefited from better access to domestic and export markets.
We have also succeeded in building up a modern distribution infrastructure linking local producers directly to the market. Farmers achieve a better income, while consumers benefit from better product availability and quality, lower prices as well as greater transparency in the supply chain. In 2011 and 2012, Metro in Vietnam achieved the Best Awards of Sustainable Supply Chain Implementation.
How has Metro, as a pioneer in self-service wholesale field, contributed to the development of modern trade infrastructure in Vietnam, an emerging market?
With its concept designed to help customers operate their business successfully, Metro brings benefits to local suppliers and producers as well as to small- and medium-sized independent businesses. We not only buy directly from the local farmers, producers and enterprises, but support them to improve quality assurance, food safety and hygiene through training courses and knowledge provision on sustainable food supply chains, agricultural development trends, good agricultural practices and post-harvesting storage technologies.
Efficient supply chain management generates economic growth, as on one-end local farmers and producers get direct access to the market and on the other end, customers get stable supply of high quality goods at competitive prices. Our fish platform in the Mekong Delta and our fruit and vegetables platform in Lam Dong province are two good examples of this achievement. Currently over 90 per cent of the products sold in Metro’s stores are sourced in Vietnam.
What are Metro’s thoughts on its business prospects in Vietnam given the shift of local people from traditional to modern shopping, increasing disposable income and the development of the local hospitality industry?
Increasing demand for high-quality and safe consumer goods and rising disposable incomes as well as a continuous development of the hotel, restaurant and catering industry will continue to fuel growth in this 90 million population economy. Therefore, we still see very good prospects for our business in Vietnam. Also, rising urbanisation and an expanding rural retail area promoted by improved infrastructure will further support such growth.
What is the position of Vietnam in Metro’s strategy and what are you doing to adhere to that strategy?
Supporting a long-term development of the countries where Metro operates is the company’s core focus. In the Asia-Pacific region, Metro considers Vietnam an important market because of its young population, dynamism and fast economic growth.
Metro runs a unique business-to-business concept providing everything under one roof for independent small- and medium-sized businesses. We are further focusing our business concept to meet the demands of core customer target groups such as Vietnamese eateries, local restaurants, Mom and Pop shops, canteens, offices, and manufacturers. Metro will continue to provide customers with a comprehensive and evolving assortment of food and non-food items. In addition, we will deploy innovative services such as delivery and consulting for small retail shops to improve the efficiency and competitiveness of our customers.
We know that to grow profitably, we have to manage our business in a sustainable manner. This means not only aiming at profitable growth and optimal capital expenditure, but also ensuring that the whole business chain - from supply to customer service and community - is driven by a sustainable development. Thus, we will continue to invest in our supply chain, to improve safety and hygiene conditions to safeguard customers’ wellbeing, to improve farmers’ productivity and income, and to support disadvantaged families and children.
Besides we have been implementing a variety of measures to reduce our energy consumption.
We understand that lowering the amount of energy we use is a quick, simple and cost-effective way to reduce Vietnam’s carbon mark, to limit national energy dependence and to help businesses cope with rising energy prices.
Clear customer orientation, proven competence in assortment and services as well as strong corporate social responsibility will position Metro distinctively as a reliable partner for independent businesses.
The Vietnamese economy has encountered macroeconomic difficulties over the past two years including a decline in consumption. Did the situation impact on Metro’s business outcome in 2012? Do you expect improved business results in 2013 given that macroeconomic indicators are expected to get better?
The last two years have been tough for Vietnam. After more than a decade of fast growth, the economy has been slowing revealing structural weaknesses. Last year was also a challenging year for Metro, but we are confident that with our more focused business strategy we are on a good track to sustain our business development. In 2013 Metro will focus on strengthening its existing stores and tailoring its business concept to satisfy professional customers’ needs in order to increase sales and profitability. We will also continue to invest in developing supply chains, providing farmers with training courses, and qualifying local producers.
What are Metro’s recommendations for Vietnamese authorities to provide better business conditions for the firm and a better business environment in general?
Whilst the government has achieved much in terms of controlling inflation, it is clear that there are issues which need to be solved. Metro remains positive for the medium-term development of Vietnam, but is concerned by the constant changes in laws and regulations and the variations of law interpretations at different levels.
To improve the business climate, we would recommend law-makers develop electricity pricing mechanisms to encourage projects on energy efficiency and clean. Incentives in land rents could also be considered for companies creating employment opportunities and contributing to local economic development.