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Foreign retailers slow to enter market   2011-02-17 - VNS

Despite dire predictions, few major retailers have entered the domestic market in the two years since the country opened its retail market to foreign competition under the terms of its commitments to the World Trade Organisation, said Viet Nam Retailers Association chairman Phan The Rue.


International giants like Wal-Mart, McDonald's and Starbucks were still only considering whether to enter the Vietnamese market, Rue said, attributing the slow development of the retail sector over the past two years to the global economic downturn and the long time it has taken foreign firms to study the market before launching business here.


Restrictions in infrastructure and human resources have also caused some foreign retailers to hesitate, Rue added.


Only 26 foreign retailers have established a foothold in the local market, accounting for 15 per cent of the market share, according to association statistics. But, despite the

modest number of retail outlets, the turnover of foreign supermarkets was large, equal to that of 30-40 domestic supermarkets.


Rue predicted the market would heat up this year as the global economic recovery picked up steam.


CBRE Viet Nam managing director Richard Leech also expected that the country's retail market could see earnings of US$85 billion this year, up from $77.8 billion in 2010, as domestic consumers have more disposable income and continue to spend over 70 per cent of their total income.


Big supermarkets would develop most strongly in big urban areas in 2011 and 2012, predicted Viet Nam Retailers Association general secretary-cum-vice chairwoman Dinh Thi My Loan. Convenience stores and supermarkets, as well as clothing, electronics and household goods retailers would also see strong growth, she said, with the retail market in rural areas expected to develop most rapidly.

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