VietNamNet Bridge - The volume of Vietnamese goods now available at supermarkets and shopping malls has dropped by two thirds as many have been replaced by Thai products.

As forecast, Thai retail groups, after acquiring big supermarket chains, have begun strengthening the distribution of Thai products in Vietnam.

Phap luat Viet Nam quoted some experts as saying that more than 50 percent of the Vietnamese retail market share has fallen into Thai hands. 

Central Group and BCJ Group alone now possess more than 50 supermarkets and a series of convenience stores in Vietnam.

Shoppers have noticed a big change at Metro, the supermarket which belonged to German and has fallen into Thai hands. 

There is an area specifically designed for Thai products right at the main entrance door. The Thai retailer reserves the most advantageous position to display their products, from household-goods appliances to clothes, from processed food to cosmetics.

When acquiring supermarkets in Vietnam, foreign retailers always commit to prioritize to distribute Vietnamese goods. 

The volume of Vietnamese goods now available at supermarkets and shopping malls has dropped by two thirds as many have been replaced by Thai products.

However, they did not keep their promise. After BJC took over Metro system, the shelves were covered with Thai products.

Vietnamese manufacturers complained that after Metro changed hands, the volume of their products available at the supermarket decreased considerably.

“They have been step by step restricting Vietnamese goods at the supermarket chain and replacing them with Thai goods. The volume of our products at the supermarket has dropped by two thirds,” a fish sauce manufacturer said.

Vietnamese goods have also been dislodged from other retail chains, including Big C and B’s Mart.

According to Le Thi Thanh Lam, general director of Saigon Food, while Vietnamese owned supermarkets only require reasonable discount rates of 1-2 percent of revenue, foreign-owned retail chains, which always require high discount rates, have asked for 4-5 percent more.

“In the current conditions, the required high discount rates will burden Vietnamese businesses,” Lam said, adding that she fears Thai goods would flood supermarkets in the time to come.

The director of a company said that foreign retailers have deliberately created difficulties for Vietnamese manufacturers. 

In the past, they would make payments to manufacturers within 30 days after deliveries, but the deadline has extended to 45 days.

He also said that the manufacturer and supermarkets agreed on a discount rate of 15 percent, but the retailers have unexpectedly required another 10 percent, which is ‘unbearable’ for Vietnamese businesses.

Some local prestigious companies have stopped selling goods via Big C and Metro because as a reaction to the retailers’ high required discount rates which have increased year after year.

Vu Kim Hanh, chair of the Vietnam High-quality Product Association, said that Thai goods would be the major rival for Vietnamese in the time to come.

PLVN