The Results of Retail Management in Vietnamese Enterprises

Regarding the salary and bonus mechanism, the salary of employees and officials is increasing, but is still low. Official employees have received profit sharing from the management board, so their salary has been improved. Many workers, especially seasonal workers, do not have social insurance and have low salaries. Hapro's average income per capita in 2007 increased by 45% compared to 2006, the average technical labor force reached 2.8 million VND, and the salary of simple laborers reached 1.5 million VND.

2.2. Current status of goods and supply chain management

Managing goods and supply is a very important part of retail management, especially when goods in supermarket systems or convenience stores are extremely diverse, so management is extremely difficult and complicated.

Goods management and supply chain management include the organization of goods sourcing, storage and distribution.

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The organization of goods sources has been focused on by businesses to have a rich and diverse source of goods, ensuring quality and reasonable prices.

The sources of goods of retail systems today include both domestic and imported goods, not just imported goods as before. Enterprises often buy domestic goods directly from reputable domestic manufacturers, while imported goods are purchased from official distributors of foreign brands. Imported goods are often wines, foods, beverages, and household electronics. The types of goods commonly sold by supermarkets and stores are:

- Processed food: sugar, milk, cakes, candy, tea, coffee, cooking oil...

- Processed foods: canned foods, ham, sausages...

- Processed foods: instant noodles, pasta, spaghetti...

- Cosmetics: detergents, cosmetics

- Household items made of aluminum, plastic, stainless steel, glass, ceramic

- Garment

- Frozen food products

- Fresh food products

The structure of goods in supermarkets today is as follows:

- Food: 30-35%

- Household appliances: 30%

- Cosmetics: 20-25%

- Fresh food: 5-10%

- Domestic product ratio: over 70%

In general, with the above commodity structure, supermarkets and retail stores have relatively met customers' needs, however, the proportion of fresh food is still too low compared to consumer demand.

Retail businesses typically purchase goods from suppliers in the following ways:

 Free purchase: This is a flexible purchasing method based on the supplier and the business agreeing on quantity, quality, and price. This method is applied to goods that can be preserved for a long time (clothes, household items, etc.), and the design and quality are often not according to any specific standards, but depend on the agreement of both parties.

 Become a sales agent for the manufacturer: The distributor signs a contract to become a retail distribution agent for the manufacturer and receives a commission based on a percentage of sales revenue. This form is beneficial for the distribution business, because it does not have to invest capital to buy goods and does not worry about loss of profit when the goods are not consumed. The types of products purchased in this form are ready-to-use processed foods such as: milk, canned food, meat, frozen seafood, fresh vegetables and fruits, ham, sausages, vegetables, pickles, etc.

 Contract purchasing: Stores sign long-term purchasing contracts with suppliers, helping to stabilize the source of goods and save on inventory costs.

storage. Businesses that can apply this form often have large working capital and reputation. [2]

However, in retail businesses, there is still a lack of initiative from purchasing, inspection, preliminary processing, packaging to selling to the market. While these stages all play a very important role in the supply chain, contributing to ensuring that goods are always fully available at the booth, while ensuring quality.

Many distribution businesses are currently not proactive in linking with manufacturers to ensure supply. The purchase of goods is still sporadic due to the lack of long-term commitment with manufacturers and no forms of goods insurance, so there are often phenomena of manufacturers canceling supply contracts when the market shows signs of fluctuation. Furthermore, domestic distributors sometimes cause discomfort to manufacturers because of the ambiguity in setting standards for goods. Meanwhile, this work is done very carefully and clearly for foreign distributors, making suppliers feel more secure when doing business with foreign businesses. The director of a textile enterprise said: When offering goods at Metro, the purchasing department here presents all the industry standards, designs, colors, sizes, percentages for marketing and advertising, terms of support for buyers and requirements for suppliers... All are computerized, updated and presented clearly and transparently for suppliers to refer to. Meanwhile, when working with Vietnamese supermarkets, the negotiation process is very sketchy, and Vietnamese enterprises refuse to sell their goods. This makes suppliers unconvinced. This phenomenon shows that Vietnamese retailers have not yet determined the long-term direction for their goods sources, and has also reduced their competitive advantage compared to foreign enterprises.

Besides the problem of goods sources, the preservation and distribution of goods of Vietnamese enterprises still have many shortcomings, due to the work of

Logistics such as warehouses, cold storage, yards, and infrastructure systems are still too few and rudimentary. Specialized trucks have not yet met regional and international standards, and some businesses still have to transport goods by rudimentary motorbikes due to the narrow and congested roads in Vietnam. By June 2006, the whole country had only 239,470 trucks (equivalent to 37.9% of the number of cars), of which there were 58,458 specialized vehicles (accounting for 9.2% of the number of cars). This number of specialized vehicles only met 53% of the volume of goods transported and 10% of the volume of goods circulated. The number of trucks with a load capacity of 3 tons accounted for only 16%, the load capacity of 2-7 tons accounted for 13.2%, and over 7 tons accounted for 8.6% [3]. Furthermore, the coordination of delivery vehicles to the right type, right place, right time is still managed quite simply in distribution enterprises, greatly affecting business operations. Such supply conditions cause many difficulties in goods management, difficulty in ensuring quality, high circulation costs, thus leading to high product prices.

An example of the failure of Vietnamese businesses due to poor supply chain organization is the case of G7 Mart. The G7 Mart convenience store chain was established in 2001, and was carefully prepared to combine distribution optimization between diverse store systems, closely linked to consumers, extensive PR activities, combining modern business management and traditional distribution characteristics. However, the business of this system still failed due to poor supply chain organization, failure to negotiate the source of goods, types, prices, discounts, and failure to obtain the best and most reasonable supply price, thus unable to control profits. Therefore, this chain of stores had to close after nearly a year of operation.

To better connect with suppliers as well as ensure the quality of goods management, in addition to strengthening business links with manufacturers as mentioned in the Current status of operations section, supermarkets and stores also increase the application of high technology to better manage imported goods, the quantity of goods available in the store, the quantity of goods sold.

are sold. The commonly used technologies are barcode technology, software with specific functions such as accounting, cash register, etc. Currently, Saigon Coop and G7 Mart have both signed contracts with Microsoft to use modern management software in business management. G7 Mart has used the Microsoft Dynamic (GMS) retail solution. The Hapro system is implementing the e-Hapro electronics corporation project, with the aim of connecting with manufacturers and customers online. The construction work includes the use of supply chain management software systems (SCM), building e-portal information portals, etc. However, the rate of enterprises using information technology in our country is still very limited and rudimentary, mainly stopping at using accounting software, websites, without knowing how to exploit the deeper advantages of information technology in management work.

2.3. Current status of customer management

Customers coming to modern retail systems today are not only middle class as before, but often customers with average income or higher, mostly workers, civil servants, students. The number of customers coming to supermarkets to shop weekly is about 700 to 800 for small supermarkets, and up to several thousand/week for large supermarkets. This number during holidays and Tet holidays can increase to 3000-4000/day.

Customer management is also quite complicated due to the large number of customers. As mentioned in chapter 1, the function of customer management is to collect customer information, including potential customers, long-term customers, and old customers, from which to establish necessary customer care regimes. The purpose of this work is to better meet the needs of customers.

Currently, customer management of supermarkets and shopping centers is still unprofessional, due to difficulties in collecting customer information. Many businesses do not know which customer group brings them the most profit. Some businesses also

Retailers often only pay attention to analyzing data and customer transaction figures, but do not really care about attracting and gaining good feelings from customers during and after purchasing. This leads to a situation where retailers lack information about customer feelings, hindering the improvement of product quality and store services. Therefore, businesses can hardly have long-term customers.

Some businesses like Hapro have thought about applying CRM (Customer relation management) software. However, to make good use of this solution, businesses still need to have a detailed plan to collect customer information, to have enough data for the software to be effective and to create reasonable customer care plans. Many businesses have not clearly defined the purpose of using this software, so they do not get the expected benefits, leading to ineffective investment.

2.4. Current status of brand management

Becoming a retail business with a good brand in the hearts of customers is always the goal of retailers, and this is also the most effective way to attract customers.

Currently, the strongest branded retail businesses in Vietnam are Metro, Big C, Fivimart and Intimex in Hanoi, Coopmart, Mien Dong supermarket in Ho Chi Minh City. These supermarkets attract many customers based on rich and complete sources of goods, beautiful displays, reasonable prices, good service quality, and attentive staff. Businesses today increasingly realize that brand development must be based on the totality of factors, not just depending on advertising and marketing.

Advertising and marketing activities are always focused on by businesses. The Hapromart chain of stores has just completed its brand identity with a green background logo, and is also developing its chain of stores on the

that green background. All supermarkets have various forms of promotion, such as discounts, loyalty cards, customer clubs…

3. General comments

3.1. Results of retail management in Vietnamese enterprises

Through analysis of the current management situation, it can be seen that retail management in our country has had the following initial results:

 The human resource organization structure is increasingly effective, the salary of staff is increasingly improved, and the working conditions of staff are improved.

 Supply chain organization is increasingly focused on and is being upgraded. Many businesses are applying high technology to this management work.

 Customer management is taken more seriously, customer needs are better met.

 Businesses have realized the importance of brand management based on improving the management quality of all stages of retail management.

3.2. Weaknesses in retail management

 Unprofessional retail workforce, due to lack of training and ineffective labor utilization.

 The organization and management of goods and the supply chain are not up to standard.

 Unprofessional customer management, not fully meeting customer needs.

 Most brand management work still focuses on investing in advertising and marketing, without really improving the image of the modern retail system in the eyes of customers.

3.3. Weak causes

The main causes of weaknesses in retail management are mainly due to the following reasons:

- Modern retail distribution activities are still quite new in our country, so the infrastructure is still weak, distributors have not really found solutions in developing infrastructure.

- Training for human resources is limited, knowledge of modern retail management is not widely known in Vietnam. Managers lack experience in business planning and decision making.

- Lack of capital is always an important problem for Vietnamese retailers today in upgrading logistics and technical equipment in sales.

Besides the micro-level causes, there are also some macro-level causes such as:

- The State has not really had a specific plan for the retail system nationwide and in each locality, so the system still operates in a fragmented and spontaneous manner.

- The law relating to retail system business has not been passed by the National Assembly.

- Regulations promoting the retail system business of domestic enterprises have not received attention from the State.

The above reasons are really big barriers for domestic enterprises in the current fierce competition with foreign retail giants.