The main task for the Trade Ministry this year is to establish a uniform distribution system across the country, and expand its network of sale agents in order to make it strong enough to set the direction for the domestic market, compete with trans-national companies and in the long run, reach out to other markets in the region and the world.
In the distribution system, priority will be given to the development of supermarkets, shopping centres and wholesale markets, especially those in major cities as well as in provinces playing key role in production and trade of forestry, fisheries and farm products.
In this direction, the Ministry will try to establish 20 large-scale distribution companies to serve as the core of the whole network.
To encourage investment in distribution, the Trade Ministry has submitted to the Government for approval a series of incentives in terms of land, staff training, trademark promotion, and access to loans.
According to experts, the Law on Competition and the Ordinance on Pricing also need to be implemented as soon as possible to help establish a legal framework for the distribution system's operation. Special attention should be given to regulating the competition, acquisition, and merger activities of distribution companies as well as the role of the government in ensuring a healthy environment for competition.
There are more than 160 supermarkets, 30 commercial centres, and 600 mini supermarkets across the country. Locally made products made up the majority of goods at supermarkets and commercial centres.
As Viet Nam develops an agriculture-based economy, a network of wholesale markets for farm produce has been taking shape in many localities. The network has helped establish professional ties between producers and distributors.
By gradually opening up the goods distribution market in recent years, Viet Nam has been successful in attracting a number of foreign investors in this area. Leading distributors such as Bourbon of France and Metro of Germany have been operating profitably in Viet Nam. Other large-scale distributors from the US, Hong Kong, and Malaysia are waiting to be licensed.
However, only 10 percent of goods circulated in the retail market have been distributed through modern channels. The Trade Ministry aims to raise the rate to 40 percent in the next few years.
Out of date management methods, which are unsuitable to current economic laws, together with the prevalence of the traditional ways of conducting business transactions among businesses and consumers are to be blamed for the poor development of professional distribution channels.
Prolonged weaknesses in the domestic distribution network have made many local businesses unable to give timely decisions in handling unpredictable changes of the market economy. Deputy Trade Minister Phan The Rue cited the inactive role played by local steel producers over the past two years as an example. The official elaborated that local producers had failed to react to price fluctuations in the world market. As a result, they were unable to play a key role in the domestic steel market, causing huge losses to other branches of activities.
Officials of the Trade Ministry warned that local businesses and distributors should promptly master the goods distribution and circulation laws of the market economy if they do not want to loose their stakes in the domestic market. Otherwise, experts said, the Vietnamese market will be a promising land for only foreign distributors to tap into.-Enditem