Vietnam retailers should look inward

It’s time Vietnam started focusing on enlarging its domestic market and increasing domestic consumption. Prime Minister Nguyen Tan Dung has already highlighted the importance of these tasks this year.

There’re several reasons to focus on these areas.

For many years we have developed an economy based on exports, which have surged over a long time. However, exports are facing hard times now because of the global economic crisis, so we can no longer depend on them.

Vietnam has a big domestic market with the world’s 13th-biggest population, which increases by about one million every year. Last year, the nation’s population expanded to about 86.2 million.

The capacity of our retail market is attractive to foreign enterprises, including many multinationals. Under WTO commitments, Vietnam will be open to more foreign businesses from the beginning of this year.

As a result, the pies for Vietnamese retailers will shrink as better-funded, more professional foreign firms try to get a slice. And foreign firms will bring a greater range of goods and aggressive marketing campaigns.

If Vietnam’s businesses are not determined to consolidate their own market, they will lose their segments. The government has announced a US$1 billion package to stimulate domestic consumption and prevent recession but if domestic firms don’t pay attention to production and distribution, the package will encourage consumption of imports instead. (TN)