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Vietnam’s retail market is considered one of the most attractive business fields for foreign investors.

Ralf Mattheas, Managing Director of Taylor Nielsen Sofres (TNS), a market survey company, said that he does not know of any other country in the world, except Vietnam, which has the GDP per capita increasing by two fold within just six years. Therefore, Vietnam appears deserving to be one of the most attractive retail markets in the world.

According to TNS Vietnam, more than 60% of Vietnamese consumers believe that their living standards will better off in the next 12 months.

The middle class, who have the monthly income of over $500/month, now accounts for over 1/3 of urban households. In Hanoi and Ho Chi Minh City, more than 90% of households have money to do their shopping at super centres.

However, high inflation has badly affected consumption. In 2006, the number of consumers increased by 20% over 2005, but in 2007, the increase was just 11.2% over the previous year.

However, the number of high income households increased by 49.6% in 2007 over the previous year and the average income households also purchased by 14.5% more, while the low income households spend less money with the purchase decrease of 17.2%.

A&T Kearny, a ranking firm, also thinks that Vietnam is the most attractive emerging retail market. The retailed consumer commodities value in 2007 increased by 22% over the previous year.

Answering the question about how the consumption habit and high inflation affects their consumption, 18% of polled consumers said that inflation does not affect their purchases, while 82% said they would change the consumption habit.

TNS’ survey showed that by June 2008, modern trade channels account for 18% of total trade, while shops on streets account for 61%, traditional markets 13%, and others 7%. However, Mattheas from TNS said that modern trade will grow rapidly with the modern trade centres and super centres to double traditional markets by 2009.

He believes that traditional markets will meet difficulties in the next 10-20 years, as Vietnamese consumers have gradually been changing their shopping habits. They tend to go shopping at super centres and convenience stores instead of traditional trade channels.

Modern trade channels will dominate the market

Statistics showed that more than a half of households in urban areas now go shopping to modern super centres.

The number of households going to modern super centres increased from 41.7% to 50.8% in the period from 2003 to 2007. It is reported that 30% of households are going shopping at super centres, 12% to wholesale super centres, 8% to trade centres and 2% to small super centres.

TNS’ survey showed that Vietnamese people, especially those, who live in big cities, think that modern trade makes their lives more convenient. 83% of consumers appreciate the high quality of products at super centres, 83% like the diversification of products, 82% like promotion programs, while 76% appreciate the safety of products.

Many Vietnamese consumers do not like modern trade channels, while 70% believe that the products at super centres are more expensive than at traditional markets

Meanwhile, 47% of consumers complain that they have difficulties in bringing products they buy at super centres home, 40% said they rarely receive consultancy, and 34% said super centres are far from their homes.

Source: TBKTVN

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