Students name: Tran Thi Thanh Thuy

Students code: K124082347

DISTRIBUTION CHANNEL OF VIETNAM

Vietnam is a fast growing market in Southeast Asia which has a high and stable GDP
growth, leading to consumer demand is also increased. Due to its huge consumption
market of nearly 90 million consumers, distribution development system in this country
is very potential. Distribution system plays an important role in the connection between
producer and consumer.
Statistics from the government showed that the country now had more than 8,500
traditional markets, 636 supermarkets and 120 commercial centres and over 1,000
convenience stores. Viet Nam's total retail revenue in 2014 reached nearly VND 2.95
trillion or approximately $100 billion, an increase of 10.6 per cent in comparison with the
previous year, and contributing 13-15 per cent of the Gross Domestic Products.
Before Vietnam joined the World Trade Organization, the distribution system was mainly
markets and grocery stores, but now Vietnamese consumers' shopping habits were
changing, with more spending in modern retail outlets due to convenience and healthrelated issues. Many consumers said that modern retail outlets gave them good access to
new products, more confidence in food safety, and clean facilities. Viet Nam's retail
market holds many opportunities for both foreign and domestic investors. Until 2015,
Metro Cash & Carry has opened 19 trade centres while Aeon added 4 new shopping
centres in big cities across Viet Nam. Big C invested $20 million in a new trade centre in
the central province of Khanh Hoa late last year, raising its chain in Viet Nam to 29.
Korea's Lotte retail group has invested $950 million on a chain trade centres and
supermarkets across Viet Nam.
Competing with foreign retail businesses would be a big challenge for domestic
companies. International retail groups have poured large investments into their business
expansions in Viet Nam with the aim of gaining more market share. This can be seen
through the opening of more outlets and trade centres to compete with local retail
businesses. Vietnamese retail businesses also have plans to gain more market share
having tried their best to stand firm in the local market. Co.op Mart has 77 supermarkets
across the country (30 in HCMC and 47 in other provinces). The electronic retail
company thegioididong.com also said it would open five new stores this year, bringing its
total stores to 53. However, the local retail network remains poor and weak. Over the past
few years, although the government and local businesses have upgraded infrastructure
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and expanded the network, a lack of close co-operation and co-ordination among
producers, businesses and localities has led to ineffective goods distribution.
In 2015, ASEAN Economic Community (AEC) has established and in the future, TransPacific Partnership (TPP) comes into effect, Vietnams distribution system will be more
expanded due to the entrance of foreign retail businesses. In the face of fierce
competition, Vietnamese retailers and distributors will have to come up with strategies to
stand firm in the local market.