Vingroup welcomes local firms of clean and safe food products to its retail chain. — VNS Photo

HA NOI (Biz Hub) — Local producers and suppliers have been at risk at many supermarkets in Việt Nam due to strong competition from foreign rivals, prompting Vingroup to launch a supporting programme that promotes domestic production.

Earlier this month, Central Group and its local partner Nguyen Kim Trading Company finally won the fierce battle for ownership of Big C Vietnam after offering 920 million euros (US$1.05 billion) to France's Casino Group. In Viet Nam, Big C is second only to Co.opmart in its number of stores.

According to the local firms, as the new owner of Big C, the Thai firm has asked that discounts from Vietnamese food processing enterprises be raised to between 17 and 25 per cent, 5 per cent higher than last year. It was the highest discount rate among local supermarkets.

In addition, Vietnamese enterprises have to cope with many fees, including fees on Big C's promotions, product testing, customer festivals and Big C birthdays, as well as other minor costs. According to local media, it was a way to sweep Vietnamese products out of the supermarket to make space for Thai products.

Before Big C, the Metro wholesale supermarket system, already owned by Thai enterprise TTC since January, still distributed Vietnamese goods but offered Thai goods with promotions and big discounts of between 4 and 15 per cent. Many Vietnamese suppliers have had to reduce their business due to the competition. According to local data, the total number of Vietnamese goods sold at Metro has reduced from 10 per cent to between 1 and 2 per cent now.

Analysts said the Vietnamese retail market, since it has opened up, cannot avoid foreign players in a market worth billions of dollars per year. Thus, in the retail market, other foreign retailers such as Ministop and Aeon of Japan, Lotte of South Korea and Auchan of France have been expanding their presence in the country.

In response to this problem, realty developer Vingroup, which has an active presence in the retail industry, announced its programme to help local firms (especially small and medium ones) sell their products in the group's retail arm, offering strong incentives to do so.

In particularly, the group committed to distribute fresh food products at the supplier's prices within one year. In specific cases, Vingroup would also provide further supporting and promoting policies for those products. According to the group, all local firms can take part in the programme so long as their products are certified as clean, safe and with a source of origin.

Currently, there are more than 50 Vincom centres, 800 Vinmart supermarkets and Vinmart+ convenience stores, 59 VinDS stores and 123 appliance centres of VinPro and appliance stores of VinPro+ and one e-trading system of Adayroi.com with millions of accounts. The large-scale retail system of Vingroup would make an effective bridge to bring products from local firms to Vietnamese consumers.

Additionally, Vingroup has also worked with relevant authorities and associations to implement solutions supporting Vietnamese firms in sustainable competition and building trust not only in the domestic market but also the international market. The group will support SMEs with its technology, management, quality control, marketing and consumption system so that they could improve their quality and capacity to compete with foreign goods.

Vingroup said it would promote the specialty food of each locality to encourage and support Vietnamese products. In addition, the group planned to join the consumption industry as a producer of food, beverages and household products.

Le Khac Hiep, vice president of the group said "the free trade agreements bring strong competition from foreign firms to Viet Nam, but also opportunities for local firms to actively improve their product quality to compete with foreign rivals."

Together with many domestic firms, Vingroup wants to help to build a national brand with international standards in local produce. — VNS