The presence of Thai enterprises has been more and more in the domestic retail market. Within ASEAN, the domestic market is facing great pressures of farm products originated from Indonesia and even Cambodia and Laos.
The existing pressure on retail market. In this photo: Buyers are at Binh Duong Big C in Thu Dau Mot City. Photo: Thanh Hong
Foreign commodities dominate the stores
At supermarkets and commercial centers in Binh Duong Province, we can easily recognize the majority of imported commodities on display. The notion of acquiring Metro by Thai enterprises has recently proved the domination ambition of foreign enterprises in Vietnam, worrying domestic ones as Thai products are to cover all over the nation and enforce the shrink of domestic commodities or divert them into distributors of Thai commodities.
Tran Thanh Tam, an unnamed director of an unnamed company specialized in farm products purchase in Binh Duong Province asserted that not Thai enterprises alone, Japanese and Korean enterprises are up to the same notion as they would divert more commodity sales to their nations on acquiring supermarket and mall systems in Vietnam. As we could see that many commercial enterprises in Binh Duong Province are invested by foreign enterprises, prompting commodities to be strongly imported to create more pressure of retail market upon distribution system of Vietnamese commodities as well as domestic enterprises.
Farm products, which used to be considered as domestic strength, are facing fierce competition to disadvantage domestic farmers. In fact, Vietnam keeps being ranked as one of the top rice exporters; however, domestic rice amount is far behind Thailand and even Cambodia which has exported rice to 53 nations in the world including demanding markets of EU and USA. This to know that rice from Cambodia can possibly dominate Vietnamese market as their rice has been evaluated as of higher quality than Vietnamese rice.
Vietnamese are letting their commodities down
By the notion of adding 15 types of discounting fees, Big C has become one of the barring forces against Vietnamese commodities domestically. To protect Vietnamese commodities, Vietnam Association of Seafood Exportation and Processing (VASEP) has recently issued a document commenting on the addition of discounting fees by Big C. However, the action, by expert evaluation, is not the measure of long-term and sustainable solutions.
According to them, more effective measures must be in place to protect Vietnamese commodities in the face of foreign acquisition of domestic stores. This is because of the fact that foreigner investors will inevitably sell their foreign commodities. Things need to be done to domestically produced commodities are that stores of Vietnamese commodities should be established in series.
Duong Bao Khuong, the Deputy Director of Binh Duong CoopMart informed of the store policy to prioritize Vietnamese commodities for its redistribution. However, in the face of increasing demands for foreign commodities, enterprises have to satisfy such demands. Then, it would be harder for Vietnamese commodities to compete if they are of low quality.
Another challenge is that the purchase regime of domestic commodities is troubling domestic producers, making the price to surge through the intermittent processes of sales. This has proved that Vietnamese are letting them down. Nguyen Thanh Kien, the director of clean vegetable supplier in Binh Duong Province informed that his products can hardly be introduced to the stores unless he should tip the purchase units. Besides, for each product to be in the store, the money will be retained 3 to 6 months by the distributors, putting the enterprises at risks of dissolution.
Reported by Phung Hieu – Translated by Vi Bao
To be continued: Part 2: Cooperation offers more strength
