Foreign retailers challenge domestic manufacturers

Retailers from Thailand, Japan and the Republic of Korea (RoK) are rushing to enter the Vietnamese market, putting pressure on domestic manufacturers, according to an article published on the English language news portal VietNamNet Bridge.
Retailers from Thailand, Japan and the Republic of Korea (RoK) arerushing to enter the Vietnamese market, putting pressure on domesticmanufacturers, according to an article published on the English languagenews portal VietNamNet Bridge.

The Japanese Aeon retail group,for example, has recently received a licence for the development of ashopping mall in Hoa Lam Shangri-La Hi-tech Park in Binh Tan district,Ho Chi Minh City.

With the project, it plans to pour another128.5 million USD into Vietnam after investing 512 million USD todevelop Aeon Tan Phu Celadon in Ho Chi Minh City, Aeon Binh Duong Canaryand Aeon Hanoi Him Lam.

Unlike the other existing retailers fromEurope like Big C and Metro Cash & Carry, which focus ondistributing domestically made products (90 percent of productsdisplayed at the chains have Vietnamese origin), Aeon obviously has beentrying to boost sales of Japanese products.

Yasuo Nishitohge,General Director of Aeon Vietnam, was quoted as saying that one-third ofthe goods to be distributed through the Aeon chain will be from Japan.The retailer possibly understands that Vietnamese favour Japanese goods,from technology products to clothes and cosmetics.

Japanesegoods are displayed in advantageous positions which can easily catchcustomers’ eyes at Aeon Tan Phu Celadon. The retail shops thatdistribute Japanese goods also occupy the best positions in the shoppingmall.

Analysts thought that Japanese goods would not sell wellin Vietnam because of the high prices. However, at Aeon Tan Phu Celadon,the goods are at “reasonable price levels”, because they are made inChina and Thailand.

In 2013, when Family Mart was ousted by ThaiBJC from the 40-shop retail system in Ho Chi Minh City, people believedthat the Japanese retailer would leave Vietnam soon.

However, infact, as Kigure Takehiro from Family Mart said, the retailer has beenlooking for retail premises to develop a convenience store chain thatcould become the leader in the market in 10 years.

Meanwhile,Daiso, Hachi Hachi, Akuruhi and Tokutokuya, shops specializing indistributing Japanese goods, have been trying to strengthen theirpresence in many big cities in Vietnam.

RoK company Lotte plansto open 60 sales points by 2020 in Vietnam, while it now has less than10 sales points. This shows RoK ambitious plan of conquering theVietnamese market.

Meanwhile, analysts commented, BJC has “taken ashortcut” when coming to Vietnam by taking over the existing retailchains. It has spent 655 million euros to take over the 19 Metro Cash& Carry’s distribution centres.

Central Group, the owner of aRobinson distribution chain, has also taken quick steps in Vietnam.After opening the first Robins in March, it is hurrying to put anotherone in Ho Chi Minh City into operation, slated for November.

PhamChi Lan, a renowned economist, noted that Thai, Japanese and RoKretailers will distribute products from their respective country’smanufacturers.

Lan, while emphasising that distribution willdetermine production scale, has urged the Government to apply necessarymeasures to encourage Vietnamese enterprises to open new sales points tohelp develop domestic production.-VNA

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