THE HANOI TIMES — Local experts emphasize that to enhance competitiveness, Vietnam’s retailers need to undertake active restructuring, innovate their business models, and strengthen industry connectivity.
Chairman of the Association of Vietnam Retailers, Nguyen Anh Duc, recently highlighted in an interview with Hanoimoi Newspaper how these strategies are vital for the growth of trade and services, aiming to position the retail sector as a key pillar of the economy.
Key Trends Shaping Vietnam’s Retail Sector
Vietnam’s retail landscape is experiencing rapid transformation, influenced by evolving consumer behaviors, accelerated digitalization, and shifting market demands. Today’s shoppers prioritize convenience and speed, driving the need for technology-driven retail solutions.
The post-pandemic landscape has seen an augmented focus on health, safety, and sustainability, fundamentally reshaping retail strategies. Retailers are urged to align their offerings and operations with these evolving consumer needs, particularly as we approach 2025.
Moreover, retailers are actively seeking operational efficiencies, optimizing their product lines, streamlining operations, and reassessing their market positioning to remain competitive.
The Rise of Omnichannel Retailing
Domestic retailers are increasingly embracing omnichannel strategies, blending online and offline channels to enhance the overall shopping experience. This approach’s success hinges on personalization; retail strategies must resonate with consumer behaviors and preferences.
To maximize omnichannel effectiveness, retailers must integrate technology-driven sales channels while harnessing the strengths of traditional retail. It’s essential that their e-commerce and digital strategies align with local products and consumer demand to ensure sustainable growth.
Challenges Facing Vietnam’s Retail Sector
Despite robust growth, Vietnam’s retail industry grapples with several challenges, including operational inefficiencies and a sluggish pace of digital transformation. The sector’s adaptation to global trends is hindered by a lack of experience and insufficient preparation.
Add to that the inefficiencies within logistics and supporting industries, which disrupt supply chains, leading to ineffective distribution channels. Furthermore, poor coordination among production, wholesale, and retail entities complicates cost optimization and value enhancement.
Addressing these challenges requires a concerted focus on accelerating digital adoption, fortifying supply chain resilience, and fostering collaboration among businesses to improve market efficiency and enhance the consumer experience.
Driving Growth: Strategies for Domestic Retailers
Domestic retailers must harness their core strengths and deep understanding of local consumer behavior, avoiding distractions from unrelated sectors. This focused approach will enhance competitiveness and foster long-term sustainability.
Additionally, establishing robust partnerships with industry associations, suppliers, and businesses across various sectors will cultivate a more resilient and dynamic retail ecosystem.
Moreover, retailers should strive for balanced development across all stages of the value chain. Strong logistics and supporting industries are critical in aiding retail operations to thrive within the economy.
Support from Industry Associations
The Association of Vietnam Retailers plays a vital role in advocating for policy reforms that bolster local retailers, all while fostering greater collaboration among domestic businesses to enhance competitiveness.
The association aims to monitor global retail trends and provide timely updates to assist businesses in heightening their market adaptability.
To generate momentum within the retail sector, three core factors must be addressed: boosting the customer conference index (CSI), restructuring the retail sector, and reconfiguring the value chain of Vietnamese products.
This requires collaborative efforts to enhance purchasing power and improve the financial health of domestic businesses, thereby stimulating consumer spending.
Domestic retailers are also encouraged to reassess their business models, striking a balance between e-commerce and physical stores while catering to diverse customer segments. Restructuring Vietnam’s value chain to better integrate with global supply chains will ensure a coordinated system that provides greater value for consumers and supports sustainable economic growth.
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Vietnam’s retail sector has maintained a strong upward trajectory, with total retail sales of goods estimated at VND878.4 trillion (US$34.4 billion) in the first two months. This equates to 77.2% of total consumer spending. Several key cities have reported significant retail sales growth. For instance, Haiphong recorded a 9.4% increase, Cantho experienced an 8.9% rise, and Danang saw an 8.7% boost. Hanoi and Ho Chi Minh City followed with gains of 7.3% and 7.1% respectively. |