Local retailers face tough competition

Monday, Oct 06, 2014 08:33

Products are sold at Big C supermarket in Ha Noi. A number of large foreign wholesalers in Viet Nam are seeking to expand their operations.- VNS Photo Thai Ha

HA NOI (Biz Hub) — Local retailers do not require preferential treatment, only a level playing field, they told a seminar on retail market development organised by the Viet Nam Retailers Association in Ha Noi on Friday.

The chairwoman of the association, Dinh Thi My Loan, said Germany's Metro entered Viet Nam as a wholesaler but its 19 outlets operate as retailers.

Local retailers face difficulties in competing with these "wholesale giants," she said.

Local retailers do not require protection only equal and transparent policies, Tuoi Tre Online quoted her as saying.

Nguyen Tien Vuong, deputy general director of Ha Noi Trading Corp (Hapro), said many foreign investors want to establish joint ventures with his company, but always on the condition that they would hold a 51 per cent stake.

They were rejected because "we do not like the Hapro brand name to be changed into a foreign name," he said.

Many Vietnamese retailers like Saigon Co.op, Phu Thai, HC, and Nguyen Kim have proved highly successful.

But they face intense competition from foreign giants like E-Mart, Big C, Lotte, and Lock & Lock who have entered the local market over the past several years.

Tran Nguyen Nam, deputy head of the Ministry of Industry and Trade's Domestic Market Department, said the Vietnamese retail market is worth US$125 billion a year.

Pham Dinh Doan, chairman of Phu Thai Group, said a number of large foreign wholesalers in Viet Nam are seeking to expand their operations.

Japan's Aeon Group has a large mall in HCM City and plans to opens another big one in Ha Noi next year, he said.

An investment of US$100,000 is required to open a 24-hour shop, but to be profitable 300 outlets need to be set up, he said.

To succeed, local retailers should seek to set up joint ventures with foreign partners, he added.— VNS

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