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Conference seeks to tap rural retail potential
Experts discussed potentials and challenges in Viet Nam's retail market and shared ideas on developing an effective local distribution system at a conference in HCM City on Mar. 15.
Ly Truong Chien, an economics expert, said Viet Nam had a large young consumer market mainly targeted in urban areas that account for only a quarter of the population.
While rural sales have grown by 30-40 per cent annually, the major potential still lies in retail sales in rural areas, where 74 per cent of the population live.
Vu The Du, Managing Partner of the Beautiful Mind Consulting and Athena Consulting, said total revenue from the retail sector last year reached US$78 billion.
Revenue from modern trade channels occupied 24 per cent of the total, Du said, noting there were still many opportunities for investors in modern trade channels in Viet Nam, especially in untapped rural areas.
The retail sector might have achieved very strong growth in recent years, but it was much less than its potential, Chien said.
He blamed the absence of development strategies of local producers and distributors, loose collaborations among producers and distributors and a lack of patience and determination. Human resources especially at the management level were another problem, Du said.
Ly Quoc Hung, Supply Chain Director of Nutifood Company, said road and port infrastructure inadequacies continued to thwart distribution.
Chien called on local producers and distributors to invest more in market research as consumer demands change quickly.
"Businesses should objectively evaluate their situation, their own strengths and weaknesses to draw up an appropriate development strategy, not just copy other strategies that were successful."
Producers and distributors also need more communication lines to agree on a common goal, Chien said.
"Most producers in Viet Nam are small-medium sized enterprises, therefore businesses in the same sector should co-operate to develop a general distribution system to reduce cost," he added.
At the conference organised by the Viet Nam Supply Chain Insight, representatives from Jebsen & Jessen Communication Viet Nam Company and Business Solution Netika Viet Nam Company made presentations on IT solutions to more than 130 local producers and distributors.
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