Improving the Distribution Sector

The Vietnamese retail market is to soon be opened wide to foreign businesses as per commitments signed by Vietnam to gain entrance to the World Trade Organization (WTO). On November 21 in Hanoi, the Ministry of Industry and Trade hosted a workshop at which time a project was announced that is to improve the capability of the Vietnamese distribution service sector from 2008 to 2012. Under this project, surveys are to be carried out to assess the competitive ability of Vietnamese retail businesses and measures are to be proposed that will help them become more competitive.

The design for this project was based on the results of research done by a team headed by Trinh Thi Thanh Thuy. This research team looked into the competitiveness of all Vietnamese distributors, including wholesalers, retailers and sales agents (not included were foreign invested joint-venture companies), focusing on Hanoi, Hai Duong, Da Nang, Thua Thien-Hue and Ho Chi Minh City. The research was done via questionnaire, interviews and information collection.

Trinh Thi Thanh Thuy said that the research team found the strengths and weaknesses of those in the Vietnamese distribution sector. All members of the team thought that to improve the competitiveness of domestic distributors, State policies that apply to these companies must be changed and the State should equip them with modern technology. A close relationship between producers, wholesalers and retailers must be established and maintained. In addition, different distribution channels should be established.

Associate professor, Dr. Nguyen Anh Tuan, the director of the National Economics Training Center, a senior member of the research team, said that it would be useful to know what the real potential of the Vietnamese distribution service sector is. The team will consult with experts before it makes a report on the current status of domestic distributors and measures by which they could improve.

Mr. Tuan said that to become more competitive, Vietnamese distributors should find out who their competitors are and understand their strengths. In addition, they should improve their work force. In the opinion of Mr. Tuan, traditional and modern forms of distribution need to be combined.

At the workshop, Hoang Thi Tuyet Hoa, the deputy director of the Planning Department of the Ministry of Industry and Trade, said that she hopes that the project will be a success and represent the entire Vietnamese distribution service sector so that measures can improve the situation.

Associate professor, Dr. Nguyen Xuan Quang from the National Economics University said that he appreciated the efforts of the research team headed by Trinh Thi Thanh Thuy. In his opinion, the Vietnamese distribution system, in general, is outdated. But, one shouldn't compare the Vietnamese distribution system to that of a developed country. Instead, one should look at the changes that are taking place, comparing what is to what was. In this way actions can be taken to make improvements./.