Rural areas are a promising market for domestic retailers as they faceintense competition from foreign businesses, especially given the fullopening of the retail market from next year.
Mai Thi Tuyet Hoa,director of Niesel Vietnam's Research Department, said at a conferenceon the country's retail sector held in Hanoi last week.
Hoa saidthat several domestic retail companies wanted to expand their marketshare in rural areas. The expansion to rural market was considered asone of the best solutions, although urban areas were the main focus oftheir development strategy.
"I think the impact of retailers inrural markets will be larger than in urban markets. Several bigretailers, for example, Unilever P&G, as well as small firms haveasked us to provide information about the characteristics of rural areasand the strategies that should be employed in these markets," Hoa said.
Accordingto a survey conducted by Nieisel, customers in rural areas werestrongly affected by advertisements and introductions from retailers. Inaddition, 90 percent of the retailers in the area tended to introduceproducts and advice buyers.
The survey also revealed that with477,000 big and small shops in the country's rural areas, if on anaverage 64 customers visited a shop in a day, there will be about 2.75million buyers who will buy products after retailers' introduced them.
"The data surprised many retailers and led them to rethink their development strategies in the rural market," she added.
DinhThi My Loan, chairwoman of the Vietnam Retailers Association (VRA),said these areas were promising markets because of the young population,integration trends and a modern retail system that was in its infancy.
"However,domestic retailers should not only expand their markets, but alsoensure quality and gain customers' trust to compete with foreign firms,"Loan said.
She added that customers' trust had gone down because of problems relating to products' quality.
Theproblems were unavoidable because of the sheer number of items in themarket. However, it was important for the retailers to learn from theproblems and make efforts to gain the trust of customers, she added.
Underthe World Trade Organisation's commitment, Vietnam will fully open itsretail market to foreign retailers by the beginning of next year.
Experts said foreign retailers with their financial might, trademarks and market experience will prevail in the market.
Several big retailers from Japan, the US, the Republic of Korea and Singapore are slated to start operations in the country.
Inaddition, the country already has two big foreign retailers, Big C andMetro Cash&Carry. Big C had expanded its chain. It now has 24supermarkets nationwide.
It was forecast that the modern retail channel will account for 45 percent of the market in Vietnam by 2020.
The country's growth rate in the retail market was 23 percent, indicating its large potential.-VNA
Mai Thi Tuyet Hoa,director of Niesel Vietnam's Research Department, said at a conferenceon the country's retail sector held in Hanoi last week.
Hoa saidthat several domestic retail companies wanted to expand their marketshare in rural areas. The expansion to rural market was considered asone of the best solutions, although urban areas were the main focus oftheir development strategy.
"I think the impact of retailers inrural markets will be larger than in urban markets. Several bigretailers, for example, Unilever P&G, as well as small firms haveasked us to provide information about the characteristics of rural areasand the strategies that should be employed in these markets," Hoa said.
Accordingto a survey conducted by Nieisel, customers in rural areas werestrongly affected by advertisements and introductions from retailers. Inaddition, 90 percent of the retailers in the area tended to introduceproducts and advice buyers.
The survey also revealed that with477,000 big and small shops in the country's rural areas, if on anaverage 64 customers visited a shop in a day, there will be about 2.75million buyers who will buy products after retailers' introduced them.
"The data surprised many retailers and led them to rethink their development strategies in the rural market," she added.
DinhThi My Loan, chairwoman of the Vietnam Retailers Association (VRA),said these areas were promising markets because of the young population,integration trends and a modern retail system that was in its infancy.
"However,domestic retailers should not only expand their markets, but alsoensure quality and gain customers' trust to compete with foreign firms,"Loan said.
She added that customers' trust had gone down because of problems relating to products' quality.
Theproblems were unavoidable because of the sheer number of items in themarket. However, it was important for the retailers to learn from theproblems and make efforts to gain the trust of customers, she added.
Underthe World Trade Organisation's commitment, Vietnam will fully open itsretail market to foreign retailers by the beginning of next year.
Experts said foreign retailers with their financial might, trademarks and market experience will prevail in the market.
Several big retailers from Japan, the US, the Republic of Korea and Singapore are slated to start operations in the country.
Inaddition, the country already has two big foreign retailers, Big C andMetro Cash&Carry. Big C had expanded its chain. It now has 24supermarkets nationwide.
It was forecast that the modern retail channel will account for 45 percent of the market in Vietnam by 2020.
The country's growth rate in the retail market was 23 percent, indicating its large potential.-VNA
