According to Le Thi Thanh Lam, deputy general director of Saigon Food, many Vietnamese enterprises are finding it increasingly difficult to get their products distributed via foreign-owned retailers which are demanding excessively high discount rates.
In one example, reported by VietNamNet Bridge, the Vietnam Association of Seafood Exporters and Producers felt compelled to ask Big C, a Thai-owned chain, to stop raising discount rates which ranged from 17% to 25%.
"The required high discount rates will force Vietnamese enterprises to seek profits from other distribution channels and accept losses when selling products via foreign-invested supermarkets," Lam said.
"This will help foreign-invested supermarkets reduce the selling prices of goods to compete with Vietnamese owned supermarkets," she added. "If Vietnamese-owned supermarkets do not develop, Vietnamese enterprises will suffer."
Last summer, Inside Retail Asia noted how international retail brands, from US franchise 7 Eleven to the South Korean Lotte chain, were contemplating expansion in Vietnam, where modern trade channels account for a quarter of retail business and new opportunities have opened up as trade agreements remove barriers.
At the time, local retailers were seeking government help – a call that has now been repeated.
Economist Tran Hoang Ngan said the government should pay greater attention to developing the Vietnamese-owned retail network, and warned that if overseas businesses ended up controlling distribution channels, that would become a major problem for Vietnamese production.
Figures quoted by VietnamNet suggest that foreign-invested supermarkets claimed 58% of the local retail market in 2015 and could take more than 70% by 2020.
Data sourced from VietnamNet Bridge; additional content by Warc staff