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Market opening forces shopkeepers to find new ways of doing business
Petty merchants are thinking of new ways of doing business which can help them earn their living in the new period, when Vietnam opens its retail market to foreigners.
The retail market will be opened as of early 2009. Experts have warned about the penetration of foreign retailers in Vietnam. However, it remains unclear about the fate of petty merchants who are now holding up 80% of the retail market share.
Petty merchants have been ignored
A lot of programs on helping upgrade the competitiveness of Vietnamese retailers have been kicked off. However, no program has been designed to help petty merchants adapt to the new period.
Nguyen Thi Kim Ly, a small merchant at the Ben Thanh Market in HCM City, who has university degrees on foreign languages and business administration and succeeded her mother to run a wholesale fashion stall, said that no state official has talked about how to help traditional markets survive and develop.
While supermarts need huge capital, billions in VND and preferences in capital, workshop premises, the petty merchants at traditional markets do not get any support and have to struggle to survive themselves.
Truong Thi Ly, a petty merchant at the An Dong Market in HCM City, said that a lot of her partners from other provinces related that in their localities, local authorities have moved petty merchants to other places to get the premises to allocate to supermarket developers. Ly complained that in the next year, a lot of partners will not get products from her any more, because they do not have the premises to sell commodities any more.
In fact, the Ministry of Industry and Trade has estimated that the total expenses on re-programming the market nationwide may reach almost VND 15.3 trillion, or less than US $1 billion. The sum of money proves to be too small, if noting that Lotte Supermart alone plans to invest US $5 billion.
In the last five years, the number of markets in HCM City has decreased significantly, while the number of new supermarts has increased rapidly. In 2002, HCM City had 385 markets, including 207 traditional markets and 178 spontaneously set markets. At that time, there were only twelve trade centres and 46 supermarts. Meanwhile, the number of markets has dropped to 250, while the number of trade centres and supermarts has risen to over 120.
Seeking the ways to survive
It is estimated that there are some 9,000 markets with a different operation scale. According to the Ministry of Industry and Trade, of the expected retail turnover of US $54 billion in 2008, markets will hold some 40%, private retailers 40%, while the remaining 20% belong to supermarts and trade centres, convenience stores and companies’ showrooms.
In fact, petty merchants have been trying to find a specific way to compete with supermarts and to survive. Petty merchants have made investments in decorating their booths at markets to make them more beautiful and attractive. They especially focus on the segments of products which allow them to avoid competing with trade centres and supermarts. The most effective competition way is to sell products at low prices to low income earners.
Nguyen Thi Huong, a petty merchant who has thirty years of selling commodities at the Ben Thanh market, said that nowadays, only the merchants who have huge capital, diversified supply sources and dare make investments in new and strange products can survive.
Unlike previously, when markets serve a wide range of customers, petty merchants now tend to develop specific products which aim at specific customers. At the Hoa Binh market, for example, the vegetable booths here have shifted to focus on selling the vegetables for lau (mixture soup), as the Hoa Binh market is specializes in seafood products. The clothes shop at the Vuon Chuoi market, which previously sold different types of clothes, has shifted to focus on clothes for obese children.
P, the owner of a clothes shop at the Pham Van Hai market related that previously she sold everything she could. However, she has decided to focus on the suits for office workers. She said that the number of visitors has decreased, but the number of buyers has increased.
Saigon tiep thi
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