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Domestic retailers should have specific development strategies to compete with foreign investors whose modern retail are channeled with high turnover, announced Vu Vinh Phu, Chairman of Hanoi Supermarkets Association.

Phu stated that the competition between local and foreign retailers have been mentioned for a long time, as Vietnam has deeply integrated into globalisation. However, the important issue is how to explore the opportunities of an integration process to promote the country's production.

He reported at the online forum to discuss opportunities and challenges for the country's retail market held in Hanoi on June 4 that Vietnam has not built a retail development strategy at the three levels: the state, the sector and the businesses.

"Small-scale capital, low professional and services have been hindrances for domestic retailers to compete with foreign retailers. Especially, a lack of association and cooperation among retailers and between retailers and producers has contributed to the low competitiveness," he added.

He noted that there were few domestic retailers who possessed outstanding or special characteristics but were slow in renewal.

Domestic retailers have called for support from the Government to ensure equality among the local and foreign companies.

He proposed to reduce the current value-added tax from 10 percent to 5 percent to promote purchasing power.

Tran Nguyen Nam, Deputy Director of the Ministry of Industry and Trade's Domestic Market Department, agreed, adding that foreign retail groups would continue to penetrate into Vietnam next year as the country was a potential market.

Statistics from the ministry revealed that modern retail channel accounted for less than 20 percent while the remaining percentage still belonged to traditional markets.

Foreign groups made up only 6-7 percent of the market.

Dinh Thi My Loan, Chairwoman of the Vietnam Retailers Association, agreed that the retail market has been attractive to enterprises both inside and outside the country, with an average growth rate of 6 percent.

"Experts revealed that Vietnam's retail market has been attractive due to its effective network development. In addition, the country has strictly followed legal framework and commitment to WTO," Loan noted.

Nguyen Trong Tuan, Deputy General Director of Ocean Retail and Real Estate Management Company, stated that foreign retailers have taken advantage in opening their shopping chains since 2009.

However, Vietnamese retail companies also have to seize the opportunities to expand investments and enhance training of human resources.

"This will ensure that the expansion of foreign businesses is not a challenge but an opportunity for Vietnamese enterprises," Tuan added.

Tran Nhat Linh, director of non-traditional selling channel at The Gioi Di Dong Company, stated that the joining of foreign retailers to the market will bring opportunities for local firms to change themselves and gain success.

Linh noted that foreign retailers such as Metro and BigC have built large supermarket models while the companies focused on small shops across the country.

"I think that there will always opportunities for domestic retailers. The issue is how to set up a suitable strategy for development," he added.

Source: VNA