The Attractiveness of the Consumer Goods Retail Market in Vietnam

- High-end commercial centers: A commercial center is a modern, multi-functional type of commercial business organization, including a complex of stores, service establishments; halls, meeting rooms, offices for rent... arranged centrally and continuously in one or several adjacent architectural works; meeting standards on business area, technical equipment and management level, business organization; having civilized and convenient service methods to meet the needs of business development of traders and satisfy customers' needs for goods and services.

IV. SOME REGULATIONS ON SUPERMARKETS AND COMMERCIAL CENTERS

Some regulations on supermarkets and shopping malls are issued in the Regulations on supermarkets and shopping malls under Decision No. 1371/2004/QD-BTM dated September 24, 2004.

1. Supermarket Standards

A commercial business establishment is called a Supermarket and is classified as a Supermarket if it has a business location that is consistent with the Commercial Network Development Plan of the province or city and has a scale and level of business organization that meets the basic standards of one of the three Supermarket classes as prescribed below:

1.1. Class I supermarket:

Applicable to general supermarkets:

- Have a business area of 5,000 m2 or more;

- Have a business product catalog of 20,000 product names or more;

- The architectural works are solidly built, highly aesthetic, have advanced and modern design and technical equipment, ensuring fire prevention and fighting requirements, environmental sanitation, safety and convenience for all subjects.

customer image; arrange parking space and restroom for customers suitable to the business scale of the Supermarket;

- Have a warehouse system and advanced, modern technical equipment for preservation, processing, packaging, sales, payment and business management;

- Organize and arrange goods by product line and product group in a civilized and scientific manner to serve customers in choosing, shopping, and paying conveniently and quickly; have a place to store personal luggage; have food and entertainment services, services for the disabled, services for children, home delivery, online sales, via post office, and telephone.

Applicable to Specialized Supermarkets:

Area standards are from 1,000 m2 or more; product catalog standards are from 2,000 product names or more; other standards are like general business supermarkets.

1.2. Class II supermarket:

Applicable to general supermarkets:

- Have a business area of 2,000 m2 or more;

- Have a business product catalog of 10,000 product names or more;

- The architectural works are solidly built, aesthetically pleasing, with modern design and technical equipment to ensure fire prevention and fighting requirements, environmental sanitation, safety and convenience for customers; there is a parking area and restroom for customers suitable to the business scale of the Supermarket;

- Have warehouse and modern technical equipment for preservation, packaging, sales, payment and business management;

Applicable to Specialized Supermarkets :

Area standards are from 500 m2 or more; product catalog standards are from 1,000 product names or more; other standards are like general business supermarkets.

1.3. Class III supermarket:

Applicable to general supermarkets :

- Have a business area of 500 m2 or more;

- Have a business product catalog of 4,000 product names or more;

- The architectural works are solidly built, have design and technical equipment to ensure fire prevention and fighting requirements, environmental sanitation, safety and convenience for customers; have parking areas and restrooms for customers suitable to the business scale of the Supermarket;

- Have warehouse and modern technical equipment for preservation, packaging, sales, payment and business management;

- Organize and arrange goods by product line and product group in a civilized and scientific manner to serve customers in choosing, shopping, and paying conveniently and quickly; have a place to store personal luggage, have services for the disabled, and home delivery.

Applicable to Specialized Supermarkets :

Area standards are from 250 m2 or more; product catalog standards are from 500 product names or more; other standards are like general business supermarkets.

2. Commercial Center Standards

A commercial establishment is called a Trade Center and classified as a Trade Center if it has a business location that is consistent with the Trade Network Development Plan of the province or city and has a scale and level of business organization that meets the basic standards of one of the three Trade Center classes as prescribed below:

2.1. Class I commercial center

- Has a business area of 50,000 m2 or more and has a parking space suitable for the business scale of the Trade Center.

- The architectural works are solidly built, highly aesthetic, with advanced and modern design and technical equipment, ensuring requirements of fire prevention and fighting, environmental sanitation, security, safety, and convenience for all subjects participating in business activities in the area.

- Multi-functional activities in both goods trading and service trading, including: areas for arranging wholesale and retail stores; restaurants, hotels; areas for organizing fairs, exhibitions, displaying and introducing goods; areas for entertainment activities, renting offices, halls, meeting rooms to organize conferences, seminars, transactions and signing domestic and foreign trade contracts; areas for financial activities, banking, insurance, post and telecommunications, information technology, consulting, investment brokerage, tourism.

2.2. Class II commercial center

- Has a business area of 30,000 m2 or more and has a parking space suitable for the business scale of the Trade Center.

- The architectural works are solidly built, aesthetically pleasing, with advanced and modern design and technical equipment, ensuring requirements of fire prevention and fighting, environmental sanitation, security, safety, and convenience for all subjects participating in business activities in the area.

- Multi-functional activities in both goods trading and service trading, including: areas for arranging wholesale and retail stores; restaurants, hotels; areas for displaying and introducing goods; areas for entertainment activities, renting offices, halls, meeting rooms to organize conferences, seminars, transactions and signing domestic and foreign trade contracts; areas for financial activities, banking, insurance, post and telecommunications, consulting, investment brokerage, tourism.

2.3. Class III commercial center

- Have a business area of 10,000 m2 or more and have a parking space suitable for the business scale of the Trade Center.

- The architectural works are solidly built, have modern design and technical equipment to ensure requirements of fire prevention and fighting, environmental sanitation, security, safety, and convenience for all subjects participating in business activities in the area.

- Multi-functional activities in both goods trading and service trading, including: areas for arranging wholesale and retail stores; areas for displaying and introducing goods; areas for dining, entertainment, office rental, meeting rooms for organizing conferences, seminars, transactions and signing domestic and foreign trade contracts; areas for consulting, investment brokerage, tourism.

CHAPTER II: OVERVIEW OF THE CONSUMER GOODS RETAIL MARKET IN VIETNAM

I. ATTRACTIVENESS OF CONSUMER GOODS RETAIL MARKET IN VIETNAM

1. High ranking in the world

Vietnam's retail market is considered one of the most attractive retail markets in the world in recent years. The attractiveness of a market is based on the following factors by AT Kearney consulting group:

- Retail sales index per capita (accounting for 10%).

- Population (5%)

- Urban population (5%)

- Business efficiency (accounting for 2.5%)

- Laws and regulations (2.5%).

This is the assessment result of AT Kearney Group on Vietnam's retail market.

 2004: Vietnam's general retail index reached 76 points and ranked 7th (after Russia, India, China, Slovenia, Croatia and Latvia, respectively).

 2005: Vietnam reached 79 points, but only ranked 8th.

 2006: with a leap of 84 points, Vietnam surpassed the 5 countries above it, Ukraine, China, Slovenia, Latvia and Croatia, to rise to 3rd place in the rankings.

 In 2007: the general retail development index reached 74 points, Vietnam ranked 4th after India, Russia and China, Vietnam ranked 4th in the world.

 2008: For the first time, Vietnam surpassed its 2007 rivals India, Russia and China to lead the list of the world's most attractive retail markets in 2008.

The general retail development index is built by AT Kearney based on a 100-point scale. The higher the score of a market, the greater its attractiveness and development prospects.

2. Sales growth rate

Sales in the Vietnamese retail market have increased rapidly in recent years.

Table 3: Vietnam retail market revenue from 2004-2007

Year

Revenue (billion USD)
2005	20.93
2006	39.83
2007	45.2

Maybe you are interested!

Source: http://dantri.com.vn/kinhdoanh/2006/5/114510.vip

Thus, within 3 years from 2005 to 2007, the revenue of Vietnam's retail market has increased more than 2 times. According to experts, the retail sales of Vietnam's market by 2010 will reach 53 billion USD, and the growth rate is 23% per year.

3. Young population and high consumer spending

Of the population of more than 84 million, more than half of Vietnamese people are under 30 years old. These people tend to like shopping at convenience stores and supermarkets, they like to visit many stores regardless of distance before deciding to buy. Moreover, 70% of Vietnamese people's income is spent on consumption, while this rate in Singapore is 57%, Malaysia 59%, Thailand 68%.

II. GROWTH RATE OF VIETNAM'S RETAIL SYSTEM

- Regarding the number of retail distribution enterprises:

The number of retail distribution enterprises increased relatively rapidly over the years, especially from 2004 to 2006. By the end of 2006, the number of retail distribution enterprises actually operating nationwide was

16,313 enterprises, an increase of 2,912 enterprises compared to 2005 and 5,271 enterprises compared to 2004, especially an increase of more than twice compared to 2000. These are very encouraging numbers showing the rapid growth rate of Vietnamese retail enterprises.

Table 4: Number of retail distribution enterprises (2000 – 2006)

Number of businesses