Domestic businesses are seeking to develop the rural retail market, given fierce competition from foreign rivals.

Statistics from the Ministry of Industry and Trade revealed that foreign-invested companies make up some 17 per cent of retail market share via trade centres and supermarkets and 70 per cent via convenience stores.

President of the Viet Nam Retailers Association Dinh Thi My Loan told the Cong Thuong (Industry & Trade) newspaper that the Vietnamese retail market had become more attractive since the country signed free trade agreements and policies attracting customers had been implemented.

Some foreign firms have increased their engagement in the race to dominate retail in Viet Nam.

For example, Aeon, a Japanese retail giant, has opened four trade centres in Viet Nam and plans to increase this number to 20 by 2020.

Japan’s 7-Eleven convenience store chain also announced plans for stores in HCM City last February.

Other international groups, such as Lotte of the Republic of Korea and Central Group of Thailand, have expanded their market share in Viet Nam and plan to double and triple their number of stores in the coming years.

Therefore, the expansion of goods distribution in rural areas is considered a way for domestic companies to increase competitiveness.

Director of the Business Studies and Assistance Centre Vu Kim Hanh said rural areas had high potential.

If domestic companies did not seize the chance to dominate this segment, foreign retailers would make use of it, she added.

Vo Van Quyen, head of the Domestic Market Department under the Ministry of Industry and Trade, said the golden population structure and increasing local income were attractive factors of the rural market.

Average purchasing power in rural areas had grown 15 per cent in recent years, he said, adding that Vietnamese retailers could secure the rural market by selling products at reasonable prices.

To dominate this market, Vingroup plans to open additional 70-80 supermarkets and 1,500 stores in remote districts.

Meanwhile, the Saigon Union of Trading Co-operatives (Saigon Co.op) has prepared a strategy to make inroads into the rural market by selling essential commodities at supermarkets and convenience stores. – VNS