After acquiring large supermarkets, last week, Big C requested to increase the discount rate to make it difficult for domestic suppliers.

Illustration photo. Source Internet

These developments show that the strategy of replacing domestically produced goods with Thai goods will take place in the near future.

From the real story of Big C, it can be seen that foreign enterprises with capital advantages, good management capacity, as well as experience and prominent brands in the market when participating in the retail market will force domestic enterprises to correct their inherent weaknesses. That is, slow innovation, fragmentation, small scale; must "grow up" themselves, proactively improve capacity, build image, form a number of strong, large-scale brands to take on a leading role in the market, spreading to small units in the domestic enterprise linkage.

Lessons from the Korean market can be helpful for Vietnamese retail businesses. The whole world knows about Wal-Mart's strength in the retail sector. However, after 8 years of entering the Korean market, Wal-Mart has only captured 4% of the market share. Even then, together with the Carrefour group, Wal-Mart has transferred all of its facilities to domestic Korean retail groups, withdrawing from this market. Experiences in consumer preferences, the ability to focus and discover internal strengths, as well as exploiting competitors' weaknesses, taking advantage of advantages in regulations on market opening... have been effectively used by Korean retail groups to regain the market.

The above example shows that instead of being afraid, domestic retail enterprises need to have solutions to save themselves before it is too late. The distribution system through supermarkets and shopping malls still accounts for a small proportion, Vietnam's retail market is still large, especially the rural market where the majority of the population is concentrated. Besides, Vietnam also has necessary regulatory tools that need to be used effectively. For example, the ENT (Economic Needs Test) regulation sets out many regulations. In essence, it is a type of "technical barrier" in the retail sector that countries have had to accept in exchange for Vietnam fully opening its retail market. ENT is designed as a tool that allows Vietnam to control the number of retail establishments of a foreign retailer in Vietnam and limit this number depending on economic needs in specific contexts. However, this tool has not been used effectively.

Vietnam is also not the first case in the world to witness the dominance of foreign retailers in the market. The issue is what Vietnam can learn from other countries in enhancing the competitiveness of the retail industry as well as using tools that are allowed to control the actual operations of foreign retailers to best protect the interests of consumers and protect the legal and legitimate interests of Vietnamese goods distribution channels.

According to Economics & Urban