Retail under market pressure
From now until the end of the year, the companies have less than four months to implement the plan and set goals such as expanding markets and encouraging consumption activities to increase commercial production. Therefore, the support and promotion of the business community in the retail industry will be a major challenge, which is “forced” to provide timely mechanisms from policy-making bodies, municipalities and the government. Internal strength of the company.
Commenting on the picture of Vietnam’s retail market in the coming period, Nguyen Anh Duc, general manager of Saigon Co.op and chairman of Vietnam Retailers Association, said that in recent years, Vietnam’s retail market has always been the biggest attraction in the world. According to an independent assessment by a market research company, this attractiveness is due to Vietnam’s relatively high population, the participation rate of modern retailers is still very low at just over 20%, so there is still plenty of room for development. However, the limitation of the current retail market lies in the lack of concentration and lack of large retailers, especially in the e-commerce related industry.
“Feeling that retailers involved in e-commerce are still quite fragmented and small, so they haven’t set aside large resources for development,” Mr. Duc said.
Another limitation is that domestic retailers’ resources are still inferior to those of foreign retailers. The recent decline in retail purchasing power is also the first expression that reveals the existing challenges that this industry is facing and that measures need to be taken to adapt and change the trend of the times. With changes in consumer habits and culture. Added to this is the support of the active guidelines and solutions of the state administrative authorities.
For example, with the recent reduction in VAT from 10% to 8%, retailers need to act very quickly to allow the new price level to support the purchasing power of the market. Or because the solution lies in retail units working together to create an overall stimulus for business that enables better support. Retailers must be entities that reflect the direct voice of consumers and manufacturers to create a comprehensive chain in the current supply and demand phase. Saigon Co.op itself is also negotiating with Saigontourist Group and Vietravel to carry out these cross-demand stimulus plans, Mr. Duc said.
Mr Duc recommended: “Given the limited potential and resources, domestic retailers should not use their funding to directly compete with foreign ‘big guys’ for big bucks. Businesses must compete on core advantages. Kern, which market do I understand best? Which retail model is best for me? Avoid large-scale spread. We may not be the largest retailers, but we will be a specialist retail industry. The more domestic retailers participate in the market, the higher the share of domestic retail.
From a scientific point of view, Ms. Dinh Thi Bao Linh, deputy director of the Center for Industry and Commerce Information (Ministry of Industry and Commerce), said that it was justified in the context of fierce competition and drastic changes in the method of goods distribution In terms of science and technology , especially the technology of the fourth industrial revolution, domestic retailers face many major challenges. International integration in terms of economy, technology and culture is being driven by the trends of the fourth industrial revolution and hence will impact the retail market in Vietnam faster and more. in the coming years. Changes in consumer social demographics will occur at an unprecedented pace, leading to ever larger and more diverse needs and desires. Along with this is the change in median age, associated diseases… may also impact the structure of the consumer goods and retail industries.
As a result of international integration, retail is no longer just about buying and selling a product, but needs to expand to support services and consumer experiences. To remain competitive, retailers must constantly innovate their offline and online sales channels and offer fast last-mile support services such as: Returning items (e.g. clothes, shoes, sandals) and electronic payments as quickly and conveniently as possible… That would be big changes and unless retail companies adapt, it will be difficult to survive in the market. stressed Ms. Dinh Thi Bao Linh.
According to a report by the General Bureau of Statistics, the total retail sales of consumer goods and services was estimated at VND 512.2 trillion in July 2023, up 1.1% month on month and up 7.1% from the same period in 2022 In the first seven months of 2023, total retail sales of consumer goods and services at current prices were estimated at VND 3,529.8 trillion, up 10.4% from the same period last year. 2022.
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