After three year of accession to the World Trade Organization, Vietnam has seen significant changes in distribution service sector, and particularly, retail services, but it has also revealed several shortcomings in State management of the sector.
The statement was agreed to by
participants at a workshop entitled “International experience on State
management of distribution services and recommendations for policy
making in Vietnam”, which was held by the Domestic Market Deparment
under the Ministry of Industry and Trade and Multilateral Trade
Assistance Project, Phase III (EU – Viet Nam MUTRAP III) in Ho Chi Minh
City on September 7.
Achievements
Retail
sales and services in the country increased constantly throughout
periods, with the period 1996-2000 seeing a rise of 10.75 percent per
year, 2001-2005 18.3 percent, and 2006-2008 25 percent.
In
2009, total retail sales and service revenue reached US$65 billion,
accounting for over 60 percent of the country’s gross domestic product
(GDP).
The total revenue was VND747.4 billion in the first six months of 2010, a year-on-year increase of 26.7 percent.
Vietnam has also continuously ranked in top positions in Global Retail Development Index (GRDI).
According
to rankings by the US consultancy group, A.T.Kearney, in 2007, Vietnam
ranked 4/7 in the list of the most attractive retail markets in the
world, in 2008, it was ranked in the first position, in 2009 the six,
and 2010 14th.
Infrastructure for the distribution service has developed at a very high rate.
According
to the ministry, there were 8,500 markets nationwide in 2009. The
number of markets rose by 100 in the first six month of the year.
In 2009, the number of supermarkets was 451, 26 of which were owned by foreign investors.
The
country has also witnessed the entrance of world-class retailers such
as Metro Cash&Carry (Germany), Big C (Bourbon – France), Parkson
(Lion Corp. – Malaysia), Diamond Plaza (South Korea) and Lotte (South
Korea)
Former trade minister Truong Dinh Tuyen said, the
distribution service, especially retail service in Vietnam are being so
dynamic and developing well like never before.
It opens new opportunities for both domestic and foreign enterprises, and gives local customers more choices, he added.
Shortcomings
Along
with the strong development, management of the distribution service
sector has revealed many shortcomings, with many counterfeit,
low-quality, smuggled and unsafe goods flooding the market.
The
country’s current legal system on distribution service is imperfect as
there yet to be a consistent regulation on the sector, clear concepts of
retail and wholesale, and guidelines on the Economic Needs Test (ENT).
Development planning for trade has not been as expected as it failed to show development of business models.
Participants
at the workshop said it is high time for Vietnam to have a specific
code of retail to monitor the sector better and create a legal framework
for enterprises to develop.
The workshop was the second in the
series of three workshops organised in this year to compile
recommendations of international and local experts in order to assist
the ministry to draft a practical Decree on distribution service.