The distribution systems of foreign retailers have become an effective and sustainable export channel, and the Ministry of Industry and Trade (MoIT) will continue to support domestic firms to make the most of this channel, said Deputy Minister of Industry and Trade Do Thang Hai.
Foreign retail businesses are adopting a multi-channel sales strategy as well as improved operations and delivery services to expand Vietnam operations despite pandemic impacts.
The export of Vietnamese goods via the distribution networks of foreign retailers has proven to be an effective and sustainable channel, Deputy Minister of Industry and Trade Do Thang Hai told a conference in Hanoi on December 17.
The Ministry of Industry and Trade has built a project promoting the engagement of Vietnamese enterprises in foreign distribution systems through 2020 given the modest proportion of the country’s direct exports to overseas markets.
Thanks to their cooperation with multinational groups and foreign retailers, many Vietnamese businesses have been stepping up innovation to meet standards in both domestic and foreign markets, Deputy Minister of Industry and Trade Do Thang Hai said.
Foreign retail businesses who came and introduced modern trade methods, technology together with professional management skills, have posed a big challenge to Vietnamese retailers.
Vietnam’s retail sector is forecast to be stable in the coming years, attracting investment from many foreign enterprises thank to its large population, brighter economic outlook and greater purchasing power.
Retail firms are being forced to become more serious about their development strategy and improving their competitiveness following the penetration of foreign retailers into Vietnam with M&A deals.
The local retail community has asked the Government to develop policies to help the industry compete with foreign counterparts as a more liberal trade environment has intensified competition recently.
Modern retail channels will account for 40 percent of the total retail sales by 2020, compared to only 25 percent at present, pushing domestic retailers into a fierce battle with foreign firms.
Mergers and acquisitions are churning the Vietnamese retail market, with large domestic players buying out rivals and massive investment by foreign retailers.
Gaining access to accurate information on land, buildings and other factors needed for the investment making-decision process has been one of greatest challenges facing foreign retailers in Vietnam.
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