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Global retailers hesitate to take Vietnam plunge
International retailers are hesitating to enter Vietnam because of the global economic downturn and some tough conditions posed by the government, an industry official has said.
Dinh Thi My Loan, secretary general and deputy chairwoman of the Vietnam Retailer Association, said Wednesday the country has yet to see the giant retailers who local retailers and analysts had feared would appear and take over the market.
Speaking at a seminar titled “Opening Distribution and Retail Market” held in Binh Duong Province, she said of the world’s top ten retailers, only Metro Cash & Carry has a presence in the country.
Wal-Mart, Carrefour, Home Depot, Tesco and Target have not revealed their plans to foray into the promising market of 86 million consumers, she said.
Germany’s Metro, the world’s fifth largest retailer, came to Vietnam in 2002 and has opened a chain of wholesale outlets in Ho Chi Minh City, Hanoi, Can Tho, Hai Phong and Da Nang.
It has been licensed to set up a new wholesale hub in Dong Nai Province.
The only other foreign retailers to enter the country are Big C of France, Malaysia’s Parkson, and Korea’s Lotte.
Loan said the financial meltdown which began in the US has hit businesses, including retailers, as well as consumers’ purchasing power worldwide.
For international retailers hoping to open a chain of outlets in Vietnam, the country’s strict requirements too are a hurdle, she said.
While making its commitments to other World Trade Organization members, Vietnam had insisted that an international retailer wanting to open a second outlet in a certain area must prove there is demand.
Loan said it would be a difficult task.
Vietnam will open up its market to foreign businesses from January 1 next year but international retailers cannot trade in sensitive or dangerous products like gasoline, books and newspapers, cigarettes, rice, sugar and precious metals.
They can only enter sectors like steel, fertilizer, cement, paper and alcoholic beverages after November 2010.
Most attractive market
Vietnam has ended India’s three-year reign as the most attractive emerging market destination for retail investment, according to the seventh annual Global Retail Development Index released by management consulting firm A.T. Kearney last June.
It had surveyed 30 emerging markets.
The World Bank, however, ranked Vietnam fourth on its Index behind India, Russia and China.
Multinational market research firm RNCOS released also in June the “Vietnam Retail Analysis (2008-2012)” report, which says the country’s retail industry is expected to grow at a compounded annual rate of 13.6 percent during the period.
Thanhnien
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