The wholesale and retail market is developing rapidly with large potential and attracting the attention of both local and foreign investors, according to a recent note from the Government Office.
The retail market of Vietnam is attractive due to its large growth potential. Photo: tinnhanhchungkhoan
Regarded as a sensitive sector, the retail market has been gradually opened to foreign investors following Vietnam’s international commitments. However, management of foreign retailers has proven to be inefficient while there has been a lack of support for local firms to expand their distribution networks, the note said.
In the note, Dung called for management of foreign retailers to be tightened to ensure compliance with the law. In addition, the expansion of distribution networks of foreign firms must be kept in check.
The Ministry of Finance was directed to increase inspections of foreign wholesale and retail firms to prevent transfer pricing and collect taxes.
The Ministry of Industry and Trade was asked to aid local retail firms with land lease fees to promote their development.
Dung also asked relevant ministries to draft a decree which would replace Decree 23/2007/ND-CP on the purchase and sale of goods by foreign-owned enterprises.
The decree should be sent to the Prime Minister within the first quarter of this year.
Dung said that the new decree should encourage foreign retailers to commit to distributing locally-produced products.
With a population of 90 million, around 40 percent of which are urban citizens, and double-digit growth in total retails sales of goods and services since joining the World Trade Organization in 2007, Vietnam’s retail market has been attractive to foreign investors.
In recent years, the market has been entered by large retailers, including firms from Japan, Thailand and the Republic of Korea, through the opening of supermarkets and acquisition deals.
According to the Vietnam Institute for Trade under the Ministry of Industry and Trade, the retail market is set to grow by 11.9 percent per year to reach a value of USD 179 billion by 2020 from USD 102 billion in 2015.
Under the industry’s planning, there will be 1,200-1,500 supermarkets, 180 trade centers and 157 shopping centers by 2020.
Source: VNA