legally imported into Vietnam, except for: cement and clinker, cars and motorbikes, paper, audio-visual equipment, alcohol, fertilizers, etc. since Vietnam joined the WTO. In addition, there are no other restrictions on commercial presence. Foreign enterprises are allowed to establish representative offices in Vietnam. Regarding the method of supply across national borders, Vietnam commits to not limit the distribution of products serving personal needs; the distribution of legal computer software programs serving personal needs or for commercial purposes.
The above commitments clearly show that the risk of foreign distribution forces penetrating the domestic wholesale market share is inevitable. Only a short time after Vietnam joined the WTO, a number of large distribution groups such as Metro Cash & Carry (Germany), Bourbon (France), Parkson (Malaysia), Zen Plaza (Japan), Diamond Plaza (Korean joint venture), ... appeared in the Vietnamese market, with modern distribution models and advanced management, contributing to the development of the supermarket system and shopping centers in Vietnam, while creating competitive pressure. In the early period, these enterprises were allowed to establish joint ventures with domestic enterprises, but starting from 2009, they were allowed to establish 100% foreign-owned enterprises. According to information from the Ministry of Planning and Investment, many corporations are currently developing investment plans in Vietnam, including the world's largest retail corporations such as Wal-Mart (USA), Carefourt (France), Tesco (UK) or leading retail corporations in Asia such as Daring, Farm (Hong Kong), South Asia Investment (Singapore). Meanwhile, domestic distributors are still very small, with only a few typical faces considered "giants" emerging: Coop Mart (Ho Chi Minh City Union of Trade Cooperatives), Hapro Mart (Hanoi Trade Corporation), Phu Thai (Phu Thai Group Corporation), ... Once the distributors
If foreign distributors with large capital potential dominate the domestic market, not only will Vietnamese retailers be pushed out of the market, but domestic wholesalers will also find it difficult to survive. These corporations with abundant capital, high management capacity and experience will dominate both the retail and wholesale markets, directly importing goods from abroad or purchasing goods from domestic manufacturers for distribution. Moreover, when these distributors have completely dominated the market, domestic manufacturers will also find it difficult to avoid being dependent on and dominated by them.
However, joining the WTO also brings certain opportunities for domestic wholesalers when they have a wider and more open business environment, the legal system is increasingly complete and compatible with international trade regulations and practices. Domestic wholesalers have more opportunities to export goods when more and more businesses from other countries want to do business with Vietnamese businesses. The market is increasingly expanding and promises a lot of potential. Domestic wholesalers also have the opportunity to establish and provide distribution services abroad. However, while the potential of domestic wholesale businesses is still small as it is now, this possibility is very fragile.
II. CURRENT SITUATION AND IMPACT OF WHOLESALE TRADE ON PRODUCTION AND EXPORT IN VIETNAM IN THE PERIOD 1996-2000
1. Domestic wholesale
According to the summary of the Ministry of Trade, domestic trade activities in the past 10 years have achieved important achievements such as:
– Domestic trade has continuously developed at a high speed, meeting the needs of production, serving consumption, developing exports; contributing to the overall growth of the economy and the process of structural transformation.
economy, labor structure towards industrialization and modernization. In general, domestic trade accounts for about 13.5-14% of GDP, each year creating hundreds of thousands of jobs for society with an average annual labor growth rate of 6.3%, by 2005 the industry's labor force accounted for over 12% of the total social labor force.
– The structure of the commercial sector has changed profoundly, gradually creating an increasingly competitive market and increasingly efficient commercial activities. From a commercial sector that was mainly monopolized by the State, it has shifted to a multi-sector, multi-ownership commercial sector.
– Business organization models are developing in a diverse way, with the emergence of many modern business methods including many types such as supermarkets and shopping malls. E-commerce has just emerged but is developing positively, electronic trading floors, virtual markets for online shopping are increasingly attracting customers, especially young people.
– The distribution system of the enterprise has a new development step, the connection between enterprises to create a distribution system is gradually formed.
The research results in the thematic report on the legal environment for the development of distribution services in Vietnam, within the framework of the Research Project on building a legal framework for the distribution system in Vietnam, conducted by the German Technical Cooperation Organization (GTZ), also show that the distribution service sector in Vietnam is playing an increasingly important role in the overall development of the Vietnamese economy in recent years. The data collected in the report show that since 2000, distribution services have accounted for the third largest proportion of the total GDP, about 13-14%, second only to the processing industry (20%) and agriculture (18%). The development of distribution services has also contributed to increasing the turnover of enterprises operating in this sector, with about 54,000 enterprises outside of Vietnam.
state-owned enterprises and no less than 3,000 state-owned enterprises participating in business. Distribution services have initially assumed the role of product consumption, thereby promoting the development of manufacturing industries, contributing to continuous economic growth over the past years, improving people's lives. The increasingly developed distribution system has promoted the emergence of many modern distribution models, especially in large cities. This system is increasingly expanding in scale, improving in quality, intertwining, supporting each other to better meet the needs of product consumption.
The above achievements are assessed to have come from the following causes: The innovation process was initiated earliest and most strongly in the field of domestic trade, in which the emergence and strong development of the non-state economic sector was an important driving force to promote domestic trade to flourish and develop; Production grew, goods were abundant, income and purchasing power of the people were raised; Opening the market for goods and distribution services with a roadmap has had a positive impact, causing traders to pay more attention to improving business methods, organizing management and developing modern types of trade; State management of trade and domestic market has also been innovated from the central to local levels in terms of awareness and content, methods and management tools.
In the general development trend of domestic trade, wholesale trade also developed rapidly with a growth rate of approximately 10% in 2005 while the growth rate of the entire service sector was 8.2%, of the transport and postal sectors was 10%, and of finance and credit was 7.5%, contributing to increasing the overall contribution of the entire trade sector to the total GDP. (See Table 2)
Table 2: Growth rate of exports and some service sectors in 2005
Unit: %
Branch
Growth rate (%) | |
Export | 26.2 |
The whole service industry | 8.2 |
* Wholesale and retail services | 10 |
* Hotel restaurant | 9.5 |
* Credit finance | 7.5 |
* Real estate business and consulting services | 5 |
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Source: Department of Trade and Services, Report on the implementation of the 2005 trade and services plan
The proportion of subjects participating in wholesale activities has changed, instead of going through commercial companies as before, manufacturing companies are increasingly participating more deeply in goods consumption activities. According to statistics in Ho Chi Minh City, the average growth rate of total goods sold by manufacturing establishments themselves in the period 1992-1995 averaged 15.71% while retail was 11.88%, lower than the average growth rate of total goods volume. This shows that the volume of goods sold by manufacturing establishments themselves through wholesale has increased significantly and has an even higher growth rate than retail. (See Table 3)
Table 3: Growth rate of total goods sold in the city
Unit: %
1992/ 1991 | 1993/ 1992 | 1994/ 1993 | 1995/1994 | BQ 1992-1995 | ||||||
Total | BL | Total | BL | Total | BL | Total | BL | Total | BL | |
Commercial | 21 | 23.39 | 25.5 | 26.26 | 25.48 | 26.88 | 19.1 | 14.76 | 22.74 | 22.72 |
Base self-produced | 22.1 | 15.6 | 8.3 | 22.69 | 6.65 | - 4.82 | 27.3 | 15.99 | 15.71 | 11.88 |
Source: Ho Chi Minh City Statistical Office
The amount of goods distributed through commercial companies in the form of retail has increased rapidly and has a higher increase than the total increase in wholesale and retail goods of these companies. This shows that the wholesale activities of specialized commercial companies have narrowed and gradually shifted to manufacturing companies, demonstrating the increasingly close relationship between production and wholesale.
The structure of economic components participating in wholesale activities has also changed a lot following the general changing trend of the entire commercial sector (see table 4).
Table 4: GDP structure in the commercial sector
Unit: %
1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 2005 | |
Total | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
I. Domestic area | 100 | 99.72 | 99.66 | 99.42 | 99.25 | 99.13 | 97 |
*State economy | 79.88 | 56 | 51.15 | 55.32 | 53.18 | 52.58 | 12.4 |
*Non-state economy | 20.12 | 43.71 | 48.51 | 44.1 | 46.07 | 46.55 | 84.6 |
II. Joint venture and foreign investment sector | 0 | 0.29 | 0.34 | 0.58 | 0.75 | 0.87 | 3 |
Source : statistical data of Ho Chi Minh City Statistical Office and Report on the implementation of trade and services 2005.
The participation rate of the state-owned economic sector has been decreasing and by 2005 it was only below 15%. Instead, there is a strong participation of the non-state economic sector, especially the individual and private economic sectors. However, these are also the economic sectors that mainly do business on a small scale, spontaneously exploding due to the openness of our State's policies on commerce. Therefore, commercial activities in general and wholesale in particular in our country are still mainly carried out on a small scale. Wholesale activities are carried out in many ways. Traditional wholesale methods such as concentrating at wholesale markets are still maintained and promoted effectively, especially in rural areas, concentrated agricultural and aquatic product production areas. Modern methods such as transaction centers, trade centers, electronic markets, and trading floors are initially interested and established by businesses. Wholesale activities through modern supermarket chains have also appeared and developed increasingly strongly, such as the supermarket chain of Metro Cash & Carry (Germany), domestic distributors such as: Hapro Mart (Hanoi Trade and Service Corporation),
Coop Mart (Ho Chi Minh City Union of Trading Cooperatives), Phu Thai (Phu Thai Group Joint Stock Company),...
The development of infrastructure, communications, and transportation strongly promotes the development of wholesale activities. A large proportion of wholesale transactions are conducted via the Internet, especially export transactions. The warehouse systems of wholesalers are widely distributed, even located right at seaports and freight transport hubs. The means of transport with increasingly large carrying capacity and the upgraded road system basically increase the speed of goods transportation.
industrialization, shortening time and risks in the transportation process, creating favorable conditions for business.
2. Export
Our country's export activities have continuously increased during the period from 1996 to 2006. In 1996, the total export turnover of the whole country reached 7,255.9 million USD, and by 2006 this figure had increased to 39,800 million USD, an increase of 448.5%. (see table 5). Export turnover in most years had a growth rate of over 20%, in the three years 2004, 2005 and 2006 it was even higher than the growth rate of import turnover.
Table 5: Vietnam's import and export turnover 1996-2006
Export | Speed increase | Import | Speed increase | Total gold import export quota | Speed increase | |
1996 | 7,255.9 | 33.2% | 11,143.6 | 36.6% | 18,399.5 | 35.25% |
1997 | 9,185.0 | 26.6% | 11,592.3 | 4.0% | 20,777.3 | 12.92% |
1998 | 9,360.3 | 1.9% | 11,499.6 | -0.8% | 20,859.9 | 0.40% |
1999 | 11,541.4 | 23.3% | 11,742.1 | 2.1% | 23,283.5 | 11.62% |
2000 | 14,482.7 | 25.5% | 15,636.5 | 33.2% | 30,119.2 | 29.36% |
2001 | 15,027.0 | 3.8% | 16,162.0 | 3.4% | 31,189.0 | 3.55% |
2002 | 16,705.8 | 11.2% | 19,733.0 | 22.1% | 36,438.8 | 16.83% |
2003 | 20,176.0 | 20.8% | 25,266.9 | 28.0% | 45,442.9 | 24.71% |
2004 | 26,003.0 | 28.9% | 31,516.0 | 24.7% | 57,519.0 | 26.57% |
2005 | 32,500.0 | 25.0% | 36,650.0 | 16.3% | 69,150.0 | 20.22% |
2006 | 39,800.0 | 22.5% | 44,410.0 | 21.2% | 84,210.0 | 21.78% |
Source: Vietnam Economic Times, Vietnam and World Economy
Export markets are increasingly expanding with major markets such as the US (18.5%), EU (16.5%), Japan (13.8%), and also developing to other markets such as China, India, etc.