[Vnbiz] EIU Vietnam Retail Retail distribution system remains backward

[Craig Stevenson]

Vietnam retail: Retail distribution system remains backward
   Printer version<http://www.viewswire.com.ezproxy.umuc.edu/index.asp?layout=IwPrintVW3&article_id=1091101294&printer=printer>
 September 12th 2006

   FROM DIALOG NEWSEDGE

[Asia Pulse Businesswire]

The government has asked the Ministry of Trade to report on the roadmap to
open the retail market for foreign enterprises in Vietnam.

According to the MoT, in the 2001-2005 period, total retail revenue in
Vietnam grew by an average of 18 per cent annually, doubling the growth of
GDP in the same period.

However, currently a large proportion of the goods (40 per cent) get to the
consumers through markets.

Around 44 per cent of the goods are sold through independent retailing or
traditional stores. Only 10 per cent are distributed through modern
distribution network of trade centres, supermarkets and convenience stores.
The remaining 6 per cent of goods are distributed directly by the producers.


In Ho Chi Minh City and Hanoi, the proportion of goods circulated through
modern distribution channel increased from 18 per cent in 2004 to 23 per
cent in 2005. Most goods distribution to remote areas in the country is
carried out by private traders.

Although there has been progress in Vietnam's retain market, the country's
goods distribution system is still backward. The lack of close connection
between producers and distributors has created a multi-levelled intermediary
distribution system, thus making goods prices higher.

According to market researcher AT Kearney and other multinational trading
groups, Vietnam is one of the most attractive markets for international
supermarket groups.

Vietnam's retail market revenue in 2005 reached US$20 billion, up 20 per
cent against the previous year and the figure is estimated to hit US$50
billion by 2010.

With a population of 83 million, more than half of these are under 30 years
old and are fond of shopping, Vietnam's retail market is wide and has not
been explored.

Copyright (c) 2006 Asia Pulse Pte Ltd.

Copyright (c) 2006 The Dialog Corporation

 Source: Dialog
NewsEdge<http://www.dialog.com/products/productline/newsedge.shtml>
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