Vingroup agrees to support nearly 250 local firms

About 250 local firms sign distribution and cooperation contracts with Vingroup in Ha Noi on June 1. - VNS Photo

The firms in the industries of food, cosmetics, stationery and toys, household appliances and fashion and textiles were from 8 cities and provinces in Viet Nam.

Under the contracts, Vingroup and its subsidiaries of Vincommerce, Vincom Retail, VINECO, VinDS would offer a solution package for those firms such as incentive policies to distribute their products in the group and enhancing the firms' brand presence in the group's commodities and services. The group also supported those firms in technology, management, quality control, marketing and selling their products in its chains, thus they could improve their efficiency.

Over 140 firms signed the distribution contracts with Vingroup, thus they will be able to sell their goods in the chains of Vinmart supermarkets and Vinmart + convenience stores with preferential terms. Food suppliers, especially as those involved in fresh food such as meat, fish, poultry, vegetables and fruit would be enjoying a zero per cent discount.

According to the local firms, competition in the retail market has become harder after the country joined free trade agreements. As some foreign rivals in Viet Nam's retail sectors asked them for high discounts of between 17 and 25 per cent when distributing their products, many have faced the prospect of losses due to these demands.

Vingroup's vice chairman Le Khac Hiep also confirmed that the competition was extremely fierce, not only in the retail sector but also in total domestic production, however he considers it a chance for local firms to upgrade their product quality, adding that "the program aims to promote domestic production, contributing to safe food sources and also to build national brands with international standards to best serve the local consumers".

Vingroup said the incentive programme was to help suppliers have more funds to reinvest in product quality and improve standards of safety and hygiene. All the firms involved have committed to supplying the market with high-quality products. At the same time, Vingroup also encouraged those suppliers to decrease prices in support of consumers.

Vingroup has invested in 16 laboratories in cities and provinces that have Vinmart supermarkets. The local labs will be able to check and control the hygiene and food safety of the products sold in its system.

In addition, the group also signed co-operation contracts with about 100 firms so that they could strengthen their brand presence the group's chains such as Vincom Retail, VinDS and VinPro.

Vu Kim Hanh, chairwoman of Viet Nam High-quality Products Association said the support of Vingroup with local firms in the context of fiercer competition in the local retail sector would not only help the firms in distribution but also in management.

Local economist Pham Chi Lan, said as 97 per cent of local firms were of small and medium sizes, a big hand is needed to support and link them together, thus, she said the co-operation has met the expectations of many local firms, adding that "an economy can only be sustainable with a well developed local business community".