|
Harsh conditions force retailers to quit the market
Retailing has been considered one of the most lucrative business fields. However, the severe market conditions have forced some of retailers quit the market.
Fivimart has shut down the supermarket in district 7, the final of its four-supermarket chain in HCM City, in late February 2012. When closing the supermarket in district 7, Fivimart said that it plans to open three new supermarkets in Hanoi and HCM City in 2012, but it declined to give more details. Therefore, this is the “story of the future”.
Prior to that, Satra Bau Cat stopped operation in 2011, while the owner of the Hanoi Supermarket on Phan Dang Luu Street gave back the retail premises. The project on a supermarket chain invested by a foreign group may be canceled, as sources have said that the investor plan to give back the retail premises and quit the market in April.
Vu Thi Hau, Deputy General Director of Nhat Nam, the owner of Fivimart chain, said: “We are not the new comer in the market. We have a network of 13 supermarkets, 1200 suppliers. The retail chain has been prosperous in Hanoi’s market, where the consumers are choosiest in the country. However, we have had problems in HCM City.”
Not easy to earn money
In Hanoi’s market, according to Hau, there is no discriminatory treatment between big and small suppliers. However, in HCM City, some suppliers demand preferences in payment method and price discounts. Meanwhile, the board of management is not in Hanoi, which made it unable to get adapted to the rapid changes in HCM City.
Fivimart once thought of hiring local high ranking personnel. However, the candidates did not fit the company’s culture. Meanwhile, it was unfeasible to send qualified executives from Hanoi. The difficulties, plus the high retail premises and high operation costs all have led to the profit decreases, which have forced the chain to shut down the supermarkets in HCM City.
Nguyen Thi Anh Hoa, the owner of Citimart Chain, which has bought back all the Family Marts of a Malaysian investor in Parkson’s shopping malls, also said that retailers need to have a different business strategy when doing business in HCM City.
As HCM City dwellers travel on motorbikes, they want the goods stalls near the parking areas. Housewives do not like going upstairs; therefore, it would be better to set up the food stalls on the first floor. Meanwhile, the living standards are quite different in different residential quarters and districts. Supermarkets also need to have the “traditional market’s culture”, i.e. that officers need to chat with visitors, instead of focusing on their works.
Nguyen Thi Hai, the owner of Hanoi Supermarket in HCM City, said that the supermarket was small which required small management costs, thus allowing the supermarket to offer competitive prices. However, the supermarket still had to compete fiercely with some other supermarkets nearby, including Co-op Mart Dinh Tien Hoang and Nguyen Kiem. Finally, Hai decided to withdraw capital from the supermarket.
Understanding customers is the key
Nguyen Thi Tranh, General Director of SCID, the developer of Saigon Co-op, said that it is necessary to learn about the tastes, habits and incomes of customers in different localities. The information would help retailers make decisions about what to sell, high grade, medium class or low cost products.
Also according to Tranh, retailers should accept taking loss in the first years of operation, and the answer to the question if the supermarkets can exist would be found only after several years.
Hoa from Citimart said that it would be a “taboo” if setting up a retail point located at the end of a one-way road, or a shopping mall which both sells high grade and popular products, located between high income earners’ residential quarters and poor workers’ houses.
vietnamnet
|
