It is estimated that total retailed sales business gained USD 68 billion, up 23.6% from the same period last year. Total retail sales of 2011 would reach USD 80 billion, contributing 15-16% of GDP, with 80-85% of the total domestic product. This is a promising figure despite the difficult situation which the country is facing with budget deficit and high inflation. The large and growing consumer market is the strong force behind this. According to AT Kearney, Vietnam topped the list of attractive emerging market for retail in 2008. The 2011 report shows Vietnam’s downfall to 23rd position. The infrastructure poor condition and expensive retail space are blamed to be barriers for foreign retailers entering the country. The current challenging economic situation in US and EU are also factors that make foreign retailers hesitant to make further investment in Vietnam. However, according to RNCOS, in its Vietnam Retail Analysis (2008 – 2012) report, Vietnam retail market is considered small in comparison with other developing Asian countries but has strong fundamentals. It is expected the retail industry revenue would surpass USD 113 billion by 2012.
The retail market has been opened to foreigners since 2009 and modern retail formats are growing more popular in the country since then. With the GDP growth rate in Vietnam at the level of 5.8 % in 2011 (according to World Bank), and the government’s changing position in creating a more favourable conditions for investment, more and more shoppers now favour convenience stores and supermarkets over street shops and that the outlook for retailer will be positive.
Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business