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Not so easy to expand distribution network   2008-08-20 - Sai gon Tiep thi

Vietnam will have to open its retail market in 2009 under WTO commitments. A lot of enterprises have jumped into the retail sector, hoping that the ‘early birds will catch the worms’. However, not all of them have been able to conquer retail markets.


Vien Thong A and The Gioi Di Dong are considered two successful retail chains. Hoang Ngoc Vy, Director of Vien Thong A, said that the first shop of the chain appeared in late 1995 at No 190B Hoang Van Thu street in Tan Binh district, HCM City. 28 shops of the chain are operating presently.


Meanwhile, The Gioi Di Dong opened its first shop at No 89A Nguyen Dinh Chieu in 2004. The chain now has 29 supermarts, including one specialising in Apple products, nationwide. Most of the supermarts are located in advantageous positions, though they are not really very large.


The common thing of the two mobile and computer retail chains is that they are selling all types of products, from well-known brand name products, like Nokia, Samsung and Sony Ericsson, to less known products, like Bavapen, Q-Mobile, iMobile, Mobell, at soft prices.


Vy from Vien Thong A said that reasonable price is the most important factor that promotes sales. Good service and beautiful spaces will be ineffective if sale prices are high.


Established as a mobile phone distributor, The Gioi Di Dong began selling computers one year ago. Meanwhile, Vien Thong A has also jumped into this business field recently.


It is said that the two distribution systems now account for 22% of the mobile phone market share of the country: Vien Thong A 13% and The Gioi Di Dong 9%.


However, not all distributors have been as successful as these two.


One year ago, when FPT Retail opened its first shop at No 458 Nguyen Thi Minh Khai street in district 3, HCM City, the business director of a retail chain was worried. “They (FPT Retail) have a lot of money and many good experts, they will succeed,” the director said.


FPT IN once had seven shops throughout the country, in Hanoi, HCM City, Can Tho, Hai Phong and Thanh Hoa. However, the retail network has been narrowed with two shops only at this moment, one in Can Tho and the other in Hanoi.


A representative of FPT IN declined to comment about the scaling down of the distribution network, saying that it is simply because FPT IN wants to restructure the network for more effective operation. Sources say that in the future, FPT IN will be the distributor of all the products of the members of the group, from printing machines, fax machines to services.


Though FPT IN’s showrooms have good designs and they are located in advantageous positions, and though the services are good, the number of clients coming to FPT IN is not high.


Le Hau, a client, who lives in Go Vap district in HCM City, said that there are not many choices for him at FPT IN. Huynh Vuong Thinh, a student of the HCM City Technique Pedagogical University, said that he was looking to purchase a mobile phone for less than VND1mil, but there were only several models available. He realised that the system is not for low-income earners like students and workers.


Sources say that FPT Retail is trying to maintain the distribution system it has set up and wait until the domestic retail market is opened to foreigners per Vietnam’s WTO commitments. At that time, FPT will have opportunities to cooperate with foreign retailers under negotiating modes, including the transfer of workshop premises.

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