VietNamNet Bridge – According to an official from the Ministry of Industry and Trade, just over 3% of the retail market of Vietnam is in the hands of foreign investors, in which the largest part belonging to Big C supermarket chain, which was just sold to the Central Group of Thailand.

At the regular press conference of the Ministry in Hanoi last week, Vo Van Quyen – Head of the Domestic Market Department – confirmed that nearly 97% of the retail market is still in the hands of local businesses.

Foreign firms, including giants like Aeon, Lotte, BJC, Auchan, and the Central Group, only have 3.4%.

Citing data from Nielsen, Quyen said for modern distribution channels alone, foreign retailers hold a larger slice, about 13.7%. But the market overall is still in the hands of Vietnamese enterprises.

At the same time, chairman of the Hanoi Supermarket Association Vu Vinh Phu re-affirmed that Vietnam has lost 50% of the retail market to the Thais and 20% to other foreign retailers.

The public is wondering about the difference between the numbers issued by the president of the Hanoi Supermarket Association, who knows clearly about the number of retailers, and the representative of the Ministry of Industry and Trade, who knows about the number or origin of products.

Market share being lost to Thai retailers

Growth of Thai retailers making life difficult for domestic counterparts.

From 2009 to 2015 imports from Thailand to Vietnam almost doubled, from $4.5 billion in 2009 to $8.2 billion in 2015, according to the General Department of Vietnam Customs. Popular items such as vegetables, automobiles, electrical appliances, and plastic products are considered a strength of Vietnam’s near neighbor.

The Ho Chi Minh City Business Association said that Vietnamese goods and also Japanese and South Korean goods now find it difficult to compete with similar products from Thailand.

Major Thai retailers have thrown down a challenge to their Vietnamese counterparts in recent times. The Ho Chi Minh City Business Association has petitioned the Prime Minister about the domination of Thai goods and retailers and their efforts to acquire an even grater market share in Vietnam.

Thai retailers in the country include Mega Market (formerly Metro), B’s Mart, Big C, and Robinson, the Association said, while the Central Group holds 49 per cent of the Nguyen Kim electronics supermarket chain.

The quality of Vietnamese goods can meet requirements but face many obstacles in entering a retail network owned by foreigners, the Association said.

Foreign supermarkets require certificates and inspection of origin and product quality and insist on discounts.

Business representatives said that the “Vietnamese Prefer Vietnamese Goods” program has helped boost the proportion of Vietnamese goods at supermarkets to 80-90 per cent but the abovementioned obstacles will see their market share decline.

Son Tung