The country's retail market is preparing for a massive influx of foreign retailer amid its World Trade Organisation (WTO) obligations, which will come into effect from January 11, 2015.
Under the changes, Viet Nam will have to permit the establishment of wholly foreign owned businesses, including retailers, with some of the world's leading retailers expressing an interest in the Vietnamese market.
The changes have also attracted the interest of foreign investors eager to take advantage of the lax investment rules.
In response, many domestic stakeholders have raised concerns with foreign retailers setting up shop in Viet Nam.
Fielding questions in an online forum held in Ha Noi yesterday, Nam said foreign firms would bring the benefits of financial resources and qualified workers.
Domestic retailers, he said, needed to adapt their management systems, training and customer service to compete with foreign firms, who were skilled in these areas.
Statistics from the department showed that by the end of last year, foreign groups accounted for only 40 per cent of around 700 supermarkets in Viet Nam.
Meanwhile, 31 out of 125 commercial centres in the country were foreign-invested.
"Domestic retailers still have the opportunity to make changes to compete with foreign businesses by 2015," he said.
Dinh Thi My Loan, chairman of the Viet Nam Retailers Association, said market share commanded by local retailers had increased in recent years.
Loan said both domestic and foreign retailers had benefited from preferential Government policies.
However, she commented that some localities had offered preferential policies for foreign enterprises. In one example, domestic firms were required to wait for longer periods to apply for land for building trade centres or supermarkets, while foreign companies received easier access to land.
Our association has reported the situation several times, she added.
In addition, local retailers have faced difficulties with the economic downturn and decreasing purchasing power, she said, adding that domestic retail companies needed to plan how they would compete in a liberalised market.
She said domestic retailers have not been good at promoting co-operation between producers and companies as foreign firms.
"We have worked hard to promote co-operation to increase domestic company' competitiveness," she said.
Talking about co-operation among four best big domestic retailers, Hapro, Satra, Phu Thai Group and Sai Gon Co.op, she said the association aimed to strengthen logistic system. — VNS