) Winning Market Share From Domestic Retail Businesses

Small retailers will tend to shop at supermarkets with many discount promotions, or convenience stores which are very convenient for customers and do not have to bargain or haggle over prices.

To survive, small traders must retain customers in many ways, first of all, they need to change their small business mindset. Markets should also gradually learn from the experience of supermarkets, such as clearly listing prices, arranging goods in an eye-catching manner, ensuring quality, reasonable prices, enthusiastic and thoughtful service attitude, building a commercial civilization so that buyers feel that the market deserves to be a reliable shopping address, a place of long-term and friendly service for the benefit of consumers. But in reality, according to a survey by P&G, nearly 100% of retail store owners said that they opened their stores just to have "money in, money out" and did not want to stick with this profession. This is the biggest reason why small retail stores have "lost themselves" under the pressure of the modern retail model. This is not difficult to understand when many retailers only have average education, cannot apply many strategies, and do not have the capital to invest in upgrading like supermarkets and large distribution centers.

2.2) Gain market share from domestic retailers

Faced with a potential market that is at risk of being encroached upon by foreign enterprises, Vietnamese enterprises have their own plans and intentions. However, if we do a comparative calculation, in the race for retail distribution market share, even though Vietnamese enterprises start first, they are not competitors of foreign corporations.

Enterprises with 100% foreign capital are gradually gaining an advantage in competition with domestic enterprises after nearly a year of presence in Vietnam because of their beautiful locations, preferential policies and good loss tolerance... Everyone knows that location is an extremely important factor for retail and this is also what foreign enterprises are gaining an advantage in. Due to the beautiful location and larger area, BigC's supermarket has a revenue of 7-8 billion VND per day, while domestic enterprises on average only earn about 200-300 million VND. Even many large foreign corporations such as Wal-Mart, Walmart, and Walmart are gaining an advantage in this area.

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-Mart, for example, if entering Vietnam, could spend a large amount of money to buy a large piece of land at a high price, dumping the value. Another disadvantage that makes businesses lose out compared to

Foreign enterprises, that is the policy applied to enterprises is still not equal. Metro supermarket system is given preferential treatment on corporate income tax while domestic retailers are not. This leads to certain advantages in business for foreign enterprises. Regarding price reduction and loss taking, foreign enterprises explain that it is a "step" in the long-term development strategy, and that in the long run it will be profitable. However, this reality is pushing the difficulty to domestic retail enterprises, which are not strong in financial potential. Domestic retail enterprise projects can only endure initial losses of 3 to 5 years, while foreign enterprises can still invest after 10 years of loss, which means they can set the selling price below the cost price.

In addition, not only investing in building more new distribution centers, these corporations are willing to spend tens of millions of dollars to acquire Vietnamese distribution businesses or invest in joint ventures.

It is inevitable that in the near future, Vietnamese retail businesses will be dominated and lose market share to foreign retailers. Based on the lessons learned from previous countries and market realities in Vietnam, it can be affirmed that if Vietnamese businesses do not focus on building a strong enough distribution channel soon, the Vietnamese market will shift to a modern distribution channel with the overwhelming market share belonging to multinational corporations.

2.3) Put pressure on manufacturers

The development of the retail market is considered inevitable in a market economy, and it is even one of the measures of economic development. However, with Vietnam opening its retail market, manufacturers (including farmers) will be under great pressure.

First of all, when foreign distributors enter Vietnam, they bring along hundreds of thousands of types of goods from international manufacturers, so we not only lose market share in the retail system but also domestic manufacturers face many difficulties. Foreign products with advantages in design, variety, brand and quality will compete directly with products of domestic manufacturers. Consumers in Vietnam today, especially consumers in urban areas, are

Increasingly, people are interested in famous branded goods, with clear origin and guaranteed quality. Therefore, it is inevitable that foreign goods are more attractive to customers than domestically produced goods.

In addition, with competitive product groups that do not differ significantly in quality and price, ease of purchase is a priority for consumers. The problem for manufacturers is how to bring their goods to consumers through different distribution channels in the most convenient and easy way. However, to bring products to foreign shopping centers or supermarkets, manufacturers must strictly comply with regulations related to design and quality. Small production facilities often have to depend on foreign distributors and have to make real efforts if they want to bring their goods to supermarkets, or have to take many risks to establish their own consumption network.

The most difficult thing is for farmers whose main products are agricultural, aquatic and seafood products. Foreign enterprises often set very high standards for food safety and quality, if they meet them, they will buy in large quantities. To meet these strict requirements, farmers have to invest in machinery, equipment, seedlings, farming methods, etc., but they do not have capital and have to borrow from banks. This is not easy, because in the past, farmers only had to transfer all their agricultural products to markets for consumption. Now, when traditional distribution channels have been overwhelmed by modern forms, supermarkets have gradually replaced flea markets and shops, farmers have to depend entirely on distributors, because if distributors do not buy their goods, they will have no place to sell them and will fall into heavy debt.

Thus, when foreign retail corporations have dominated the Vietnamese distribution market, they will put considerable pressure on domestic manufacturers. Domestic manufacturers will be put in a passive position and forced to depend on foreign distributors to bring goods to consumers.

CHAPTER 3: SOLUTIONS TO DEVELOP VIETNAM'S RETAIL MARKET IN THE CONTEXT OF OPENING UP AND INTEGRATION

INTERNATIONAL ECONOMIC IMPORT

I) Viewpoints and goals for retail market development

1) Development perspective

On February 15, 2007, the Prime Minister issued Decision No. 27/2007/QD-TTg approving the "Domestic trade development project to 2010 and orientation to 2020".

The domestic trade development project is one of the projects that the Ministry of Trade (now the Ministry of Industry and Trade) has urgently built in nearly 2 years to develop the domestic market in the new integration conditions. This is a very important project and is expected to have an impact on arranging, organizing and promoting the domestic market to be competitive enough when entering the stage of full integration according to WTO commitments.

Accordingly, domestic trade will be developed in the direction of " Building a strong and modern domestic trade, based on a reasonable structure of systems and distribution channels with the participation of economic sectors and types of organizations, operating in a competitive environment with the State's macro management and regulation. Paying attention to the development of small enterprises and business households; at the same time, encouraging and promoting the formation of large enterprises through the process of accumulation and concentration to create large distributors of Vietnamese brands. Implementing the opening of the distribution market in accordance with the roadmap of commitments to join the World Trade Organization (WTO). Establishing links between large enterprises and small enterprises in organizing the market, creating strength to cooperate and compete effectively with foreign corporations when Vietnam opens the distribution service market. On that basis, promote the role and position of domestic trade in orienting and promoting production development, orienting and meeting the increasingly rich and diverse consumption needs of the people.

people, contributing to export development, promoting economic restructuring and economic growth.”

Specifically, the perspective of domestic trade development will be:

Firstly, developing domestic trade in accordance with the objective laws of the market economy, ensuring autonomy, freedom of business and equal competition among entities in an increasingly complete legal environment and with macro-regulation by the State.

Second, developing domestic trade is linked to the development of diversity in ownership regimes and economic sectors of entities, in organizational forms and methods of operation. Pay attention to developing small and medium enterprises and business households, while promoting the development of commercial enterprises following the group model, with modern distribution systems, playing a core role, leading the market to orient production and consumption.

Third, develop trade in goods linked to investment, production and trade in services according to the international commitment roadmap; at the same time, proactively meet the increasingly diverse needs of the domestic market and consumers.

Fourth, develop domestic trade on the basis of maximizing all social resources; focus on encouraging the ability of enterprises to accumulate and concentrate resources to invest in developing trade infrastructure and expanding business networks.

2) Development goals

2.1) Growth indicators

Based on those development perspectives, the "Domestic Trade Development Project to 2010 and Orientation to 2020" also sets out specific growth targets for the entire trade sector in general and for the retail distribution system in particular.

Firstly, the contribution of domestic trade to the gross domestic product (GDP) of the whole economy by 2010 reached over 200,000 billion VND (accounting for 14.5%), by 2020 it reached nearly 450,000 billion VND (accounting for about 15%);

Second, the average annual growth rate (excluding price factors) of total retail sales of goods and consumer service revenue from now to 2010 is about 11%/year, in the following periods it is over 10%/year. By 2010, total retail sales of goods and consumer service revenue will reach about 800,000 billion VND and by 2020 it will reach about 2,000,000 billion VND.

Third, the proportion of retail sales of goods by economic sector by 2010; the domestic economic sector (including the state economic sector and the non-state economic sector) accounts for about 93%; the foreign-invested sector accounts for about 7%. This proportion by 2020 will be 80% and 20% respectively.

Finally, the proportion of retail sales of goods by modern trade types (shopping malls, supermarkets, convenience store networks...) reached about 20%, about 160,000 billion VND in 2010, and by 2020 it will reach 40%, about 800,000 billion VND.

2.2) Expression goals

In addition to growth targets, the Project also sets out specific goals expressed in the following changes in forms and methods of operation:

Firstly, modernize the commercial infrastructure; focus on building and developing a modern commercial infrastructure system (commercial centers, supermarkets, shopping centers, commercial - service areas, convenience stores, specialized stores, logistics centers, wholesale warehouses, fair - exhibition centers...) in urban areas, industrial parks, economic zones, export processing zones, border economic zones; basically complete the Program for developing market types (people's markets in rural areas, remote areas, border areas and islands and central markets, specialized markets, wholesale markets in concentrated agricultural production areas, large consumption markets).

Second, develop diverse types and methods of modern commercial business such as: commodity exchanges, auction centers, franchises, e-commerce...

Third, form and develop a number of strong commercial corporations, trading in specialized or general goods, with sufficient competitiveness and conditions to

Effective cooperation with foreign distribution corporations when Vietnam opens its distribution service market.

Fourth, develop commercial human resources with knowledge, skills, modern and professional business practices, keeping up with the development requirements of domestic trade in the context of international economic integration.

Fifth, perfect the State management institution on trade, ensure healthy and sustainable development of trade activities; enhance the self-regulation capacity of the domestic market when the world market fluctuates.

2) Development direction

The project also specifies the necessary steps to achieve the above growth target. First of all, regarding the participants in the retail market, it is necessary to develop a variety of types of enterprises with different scales, increase in quantity, and innovate in operating methods in a modern and professional direction, in accordance with the laws of goods circulation. Specifically, innovate the organizational model, management technology and business methods in the direction of professionalization and modernization to gradually build the main types of commercial enterprises such as corporations, parent-subsidiary companies, modern wholesale and retail trading companies, logistics service companies, companies (or cooperatives) managing and operating markets, joint stock companies producing, processing and consuming agricultural products and food, rural trade and service cooperatives; and commercial business households.

An important direction clearly stated in the Project is to develop a variety of types of commercial infrastructure, harmoniously combining traditional trade with modern trade, in accordance with the nature and level of development of the market in each locality. At the same time, develop circulation organization models according to each commodity market, in accordance with the nature and level of production, trends and methods of consumer satisfaction, meeting the State's macro-management requirements. Especially for important or specific commodity lines: consolidate the distribution system formed on the basis of establishing vertical linkages, with close, stable and binding relationships and responsibilities at each stage of the circulation process from production, import and export to wholesale and retail.

through online relationships or sales agency relationships; establishing a distribution system based on the construction and development of a wholesale warehouse system and a logistics center system; encouraging businesses that trade in groups and products that are related to each other in consumption to develop horizontal linkages in the distribution stage to reduce investment costs, circulation costs and social costs. The State intervenes in the market of these industries mainly through regulations on the organization and control of the distribution system, using indirect tools.

On the State side, the Project clearly states the responsibility of the competent authorities to complete the legal framework, creating a stable and healthy business environment for domestic and foreign retail enterprises. Ministries and branches need to urgently develop and submit to the Government for promulgation of legal documents; review to supplement and complete legal documents related to technical barriers (quality standards, food hygiene and safety, environment, etc.) to protect the domestic market and consumer interests. To meet the need to improve the quality of human resources for the trade sector, the Ministry of Finance is assigned to allocate an annual budget to ensure the upgrading of material and technical facilities, building a team of teachers and training content and programs in the field of distribution for the system of colleges, intermediate schools and vocational schools under the Ministry of Trade.

II) Some solutions

Faced with the reality of the retail market, the potential of our country with the risk of the "retail pie" being divided and the positive and negative impacts on all related subjects along with the gradually changing consumption trends of the people, the author would like to make recommendations to promote the Vietnamese retail market.

On the Government side

The State has introduced policies to protect the domestic market, including consumers and domestic retailers, from the threat of massive attacks by foreign businesses. However, there are still opinions that the State needs to have closer policies and at the same time need to be transparent to best ensure consumer rights and protect the domestic market to the greatest extent possible.

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