4.2.Some successful retail models
In the increasingly fierce competition in the global retail market, there are retail models that have gradually established a foothold and demonstrated their competitiveness.
Here are some retail models that have been quite successful:
Department stores: sell a wide variety of goods – no one category dominates. Department stores are typically divided into departments, selling clothing, household goods, appliances, and household goods, and also sell products such as paint, machinery, cosmetics, toiletries, photographic equipment, jewelry, toys, and sporting goods. Department stores may operate independently, or be part of a retail chain consisting of stores located in one country or many countries.
Discount store: sells large quantities of goods at reduced prices.
Specialty stores: small stores that specialize in selling a single type of goods and related products (a key difference from supermarkets or grocery stores). Most specialty stores have a steady and plentiful supply of the items they sell, and the quality of service is also high. The pricing policy of specialty stores is usually medium to high, depending on factors such as the type of goods and the exclusivity of the goods.
Shopping mall (shopping mall, shopping center, shopping arcade): consists of one or more buildings with retail stores. Shopping malls often have connecting walkways so that customers can walk from one store to another.
Convenience store: a store that mainly sells food and some of the most essential consumer goods for daily life. These stores are often in very convenient locations, near residential areas or busy streets, open from
early morning to late night. The scale of this type of store is relatively small, the prices are also higher than normal. The service for customers is average.
Retail chain: a group of retail stores that share a common brand, are managed in a unified manner, and have standardized operations. These stores may be branches of a company, or franchises owned by individuals or companies operating under contract with a parent company.
Supermarket: a collection of many stalls, operated on a self-service basis, selling a wide range of food and household goods. It is larger in size and sells a wider range of goods than traditional grocery stores.
Supermarkets typically sell meats, dairy products, canned goods, and produce, as well as a wide variety of consumer goods such as alcohol, soft drinks, cleaning products, medicines, clothing, and more.
Superstore: a very large retail space that sells food and household goods, plus a variety of additional services. Superstore is a generic term for the largest types of retail stores (most notably category killers and hypermarkets – including supermarkets, discount stores, and warehouse stores).
Retailer Cooperative: Many small retailers join together and appoint representatives to buy goods at a higher discount from manufacturers and to carry out joint marketing measures. This model is often applied by grocery stores, hardware and home goods stores, and drug stores.
5. Factors affecting the development of retail distribution systems
Retailing is an intermediary in the distribution of goods. Therefore, it is also affected by changes in the general distribution system.
The distribution system of goods is affected by many factors, including both subjective and objective factors. Changes in these factors can cause the disappearance of old forms of distribution and the emergence of new forms of distribution. The competitive structure in the market is constantly changing, also leading to changes in the distribution system of goods. Changes in consumer buying behavior factors, new technologies also
increase the variability of the goods distribution system7.
The distribution system has boundaries like any other system. It includes geographical (market areas), economic (the ability to handle certain goods and services) and human (the ability to interact with each other) boundaries. They are part of the macro distribution system with the capabilities and conditions for their operation.
On the other hand, the goods distribution system of each enterprise and of the whole economy is inevitably located in the national and international environment. Therefore, all national and international environmental factors such as nature, economy, society - culture, politics - law, technology ... directly or indirectly affect the development and operation of goods distribution systems in the market.
In addition to the above macro factors, the goods distribution system is also influenced by micro factors such as: customer characteristics (including quantity, geographical dispersion, purchasing behavior), product characteristics (product characteristics, level of standardization, product installation and maintenance services, unit product value), intermediaries (including the availability of intermediaries, level of product or product type acceptance, strengths and weaknesses, emergence of new types of commercial intermediaries), level of competition by geographic area, current distribution systems of the company.
7 Dr. Le Trinh Minh Chau, Associate Professor Dr. Dinh Van Thanh, Dr. Truong Dinh Chien, Master Vu Ba Son (2004 ) , Development of goods distribution system in Vietnam in the context of international economic integration , Political Theory Publishing House, p . 30 .
competitors, main characteristics of manufacturing enterprises (financial strength, product mix, traditional distribution systems, modern marketing policies…).
As a part of the goods distribution system, the retail system is inevitably affected by macro and micro factors affecting the goods distribution system as mentioned above, but at different levels.
Chapter 2
OVERVIEW OF DOMESTIC RETAIL MARKET SITUATION
The retail system is the backbone of domestic trade. The retail system has created a remarkable development for domestic trade. So it can be said that the achievements that domestic trade has achieved have a significant contribution, even mainly from the retail system.
Here, we will learn about the retail system in relation to domestic trade activities with its achievements and limitations. Then, we will consider some typical retail models, and draw conclusions about the Vietnamese retail market.
1. General assessment of domestic trade organization and activities in the past 10 years (1996-2005)
1.1. Achievements
1.1.1. Over the past 10 years, domestic trade (distribution services) has promoted continuous economic growth, not only solving output and product consumption for manufacturing industries but also contributing to increasing the overall GDP of the whole country.
Total retail sales of goods and consumer service revenue (CR) have continuously increased over the years: in 1996 it reached 145,874 billion VND, in 2000 it reached 220,410.6 billion VND. In general, the period 1996-2000 increased by an average of nearly 11%/year; in 2001 it reached 245,315 billion VND, in 2005 it reached 480,300 billion VND. In general, the period 2001 to 2005 reached an average of 18.3%/year. In the past 10 years, the average growth rate of CR has always been 1.5 - 2 times higher than the average GDP growth rate of the same period (see table 4).
Table 4: Total LCHHBL8
Year
Total amount (billion VND) | Speed increase (%) | Year | Total amount (billion VND) | Growth rate (%) | |
1996 | 145,874.0 | 2001 | 245,315.0 | ||
1997 | 161,899.7 | 11.0 | 2002 | 280,884.0 | 14.5 |
1998 | 185,598.1 | 14.6 | 2003 | 333,809.3 | 18.8 |
1999 | 200,923.7 | 8.3 | 2004 | 398,500.0 | 19.4 |
2000 | 220,410.6 | 9.7 | 2005 | 480,300.0 | 20.5 |
1996-2000 | 10.75 | 2001-2005 | 18.3 |
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The contribution of domestic trade to GDP has also increased continuously over the years: in 1996 it was 43,125 billion VND, in 2000 it was 62,836 billion VND, the corresponding figures for 2001 and 2005 were 67,788 billion VND and 113,768 billion VND.
In general, the contribution of domestic trade accounts for about 13.5 - 14% of the GDP of the entire economy, after the processing industry (about 20%) and the agricultural sector (about 16-18%) (see table 5).
Table 5: Contribution of trade and some sectors to GDP9
Year
Total GDP (100) | Commerce | Agriculture (%) | Basic industry (%) | ||
Value (billion VND) | Proportion (%) | ||||
1996 | 100 | 43,125 | 15.85 | 22.44 | 15.18 |
1997 | 100 | 48,914 | 15.60 | 22.01 | 16.48 |
1998 | 100 | 55,783 | 15.45 | 21.10 | 17.15 |
1999 | 100 | 59,384 | 14.85 | 20.84 | 17.69 |
2000 | 100 | 62,386 | 14.23 | 19.82 | 18.56 |
2001 | 100 | 67,788 | 14.08 | 18.26 | 19.78 |
2002 | 100 | 75,617 | 14.11 | 18.02 | 20.58 |
2003 | 100 | 83,297 | 13.58 | 17.34 | 20.45 |
2004 | 100 | 96,995 | 13.56 | 16.65 | 20.34 |
2005 | 100 | 113,768 | 13.58 | 15.83 | 20.70 |
8 Statistical Yearbook
9 Statistical Yearbook
1.1.2. Creating more jobs for workers, especially unskilled workers, in conditions where the state almost does not have to invest, contributing to solving the social pressure of a populous country like Vietnam.
On average, domestic trade creates hundreds of thousands of jobs for society every year. If in 2001 the whole country had 4,046,500 workers, by 2005 there were 5,192,200 workers, an increase of over 1,100,000 jobs in the domestic trade sector. By 2005, the sector's workforce accounted for over 12% of the total social workforce, equivalent to the processing industry and 1/6 of the workforce in the agricultural sector, but the state almost did not have to invest.
The proportion of labor in the domestic trade sector tends to increase in the national economy. If the average annual growth rate in employment in the whole economy during the period 2001-2005 was 2.6%, that of domestic trade was 6.3% (see Table 6).
Table 6: Labor in the trade sector10
Year
General Social Labor | Speed increase (%) | TM labor (thousand people) | Proportion of labor force/Total (%) | Speed increase (%) | |
2001 | 38,562.7 | 4,062.5 | 10.53 | ||
2002 | 39,507.7 | 2.45 | 4,281.0 | 10.83 | 4.86 |
2003 | 40,573.8 | 2.70 | 4,532.0 | 11.17 | 5.86 |
2004 | 41,586.3 | 2.50 | 4,767.0 | 11.46 | 5.19 |
2005 | 42,709.1 | 2.70 | 5,192.2 | 12.16 | 8.92 |
2001- 2005 | 2.59 | 6.33 |
10 Statistical Yearbook
1.1.3. Increasingly better meet the rich and diverse needs of consumers, thereby contributing to improving and gradually enhancing people's lives.
If in the period 1995-2000, the total LCHHBL only reached 66.1% of the consumption fund (gradually increasing from 64.8% in 1996 to 68.71% in 2000), then in the period 2001-2005 this rate increased to 76.7% (gradually increasing from 71.6% in 2001 to 82.1% in 2005). This proves that people's consumption has been gradually raised through domestic trade activities. The circulation of goods and the expansion of the domestic market have increasingly profound impacts on people's lives (see table 7).
The average LCHHBL level per capita increased rapidly: in 1996 it was
1,994,000 VND, 2,839,000 VND in 2000, 3,118,000 VND in 2001, 5,778,000 VND in 2005.
The market of goods is increasingly rich and diverse, thus satisfying the consumption needs of the people better and better. There are more and more types of high-quality Vietnamese goods appearing along with the process of building and developing domestic brands.