HCM City
Chairman worried about foreign investors’ dominance of retail market
HCM City
People's Committee Chairman Nguyen Thanh Phong is concerned that without
suitable policies, foreign investors will dominate the retail market in the
country in the near future.
HCM City
Chairman Nguyen Thanh Phong.
Phong
expressed the concern at the city authorities’ meeting on May 30.
Phong said
that several retail chains in Vietnam like Nguyen Kim, Big C and the online
shopping website Zalora have been acquired by the 3rd richest billionaire of
Thailand. Meanwhile, the Japanese investor of Aeon supermarket chain is
striving to turn Vietnam into their second largest retail market in the
region, after Malaysia.
"With
this strategic orientation, if we do not have suitable policies, foreign
investors will dominate the domestic retail market in the near future,"
Phong said.
Earlier,
many Vietnamese producers have also expressed concern over the rapid
expansion of foreign retailers on the domestic market as their products may
be replaced by foreign items at supermarkets with foreign involvement.
Local goods
producers and suppliers said supplying products for supermarkets is tough for
small and medium firms while new owners of supermarkets could seek new
suppliers.
The dismal
forecast comes after Metro Cash & Carry stores in Vietnam have been
acquired by Thailand’s TCC and Big C supermarkets by another Thai giant,
Central Group, and its Vietnamese partner Nguyen Kim.
Pham Ngoc
Hung, vice chairman of the HCMC Business Association, said member companies
have had difficulty supplying products for foreign-owned supermarket chains.
Locally
made goods formerly made up 80-90% of the total at retail stores but the
percentage of foreign items there is rising. Quality domestic products can
easily enter supermarkets of domestic enterprises but not foreign-invested
stores.
Hung said
foreign-invested supermarkets often demand high discounts, so those suppliers
failing to meet their requirement have to go.
Prices of
goods imported from regional countries are more competitive than those coming
from Western countries.
Vietnam
pledged to lift import tariffs on almost all products imported from member
states of the Trans-Pacific Partnership (TPP) trade pact and the World Trade
Organization (WTO) from 2018. Therefore, more imported goods will enter
Vietnam in the coming years.
With the
establishment of the ASEAN Economic Community (AEC) late last year, tax
barriers to imports from Thailand will no longer exist.
According
to the association, Vietnamese products are unable to compete on the home
market with those from Thailand in terms of quality, price and design.
The
association said Vietnam has not found effective measures to protect domestic
retailers. Under the country’s commitments to the WTO, the economic needs
test (ENT) was introduced as a way to prevent foreign investors from
dominating the Vietnamese retail market. However, the regulation on ENT is
not specific and applied differently in different localities.
Nguyen
Thanh Nhan, general director of Saigon Co.op, the owner of the Co.opmart supermarket
chain, said the ENT aims to control the fast development of foreign
distributors, but supermarkets and shopping centers of foreign enterprises
have mushroomed nationwide.
Foreign
retailers have opened many stores to compete with domestic rivals.
According
to the association, as many enterprises complain, foreign retailers have even
publicly distributed rice, sugar, tobacco and other products for which they
are not licensed.
Therefore,
domestic enterprises proposed the Government weigh the licensing of new
stores, especially in Hanoi, HCMC, Dong Nai and Binh Duong.
They also
expected relevant agencies to inspect foreign retailers’ law compliance,
tighten rules on foreign retailers’ operations, stop licensing new stores of
foreign investors and prioritize Vietnamese retailers.
VietNamNet/SGT
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Thứ Ba, 31 tháng 5, 2016
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