Last updated: 16:15 - November 1, 2006
Foreign competitors to enter retail market http://www.nhandan.com.vn/english/business/011106/market_foreign.htm
Prime Minister Nguyen Tan Dung has approved steps to open Vietnam's retail market to foreign competitors.
Under Dispatch 1701/TTg-QHQT, which was issued on October 23, the Government will establish new policies to conditionally open the domestic retail market to foreign firms. The Prime Minister's approval is seen as a key step ahead of Vietnam's entrance into the World Trade Organisation (WTO).
Under the October dispatch, the Prime Minister instructed the Ministry of Trade to draft guidelines for implementing Commercial Law regulating foreign enterprises in the domestic retail market.
The guidelines will be based on an August 2006 progress report issued by the ministry on liberalising the retail market.
Allowing foreigners access to the local market has been a sticky issue between Vietnamese and WTO negotiators, and was only concluded in mid-October after lengthy discussions.
Many of the world's largest retail manufacturers and distributors have already established a presence in Vietnam, including Germany's Metro Cash& Carry, which operates six supermarkets nationwide.
In addition, Singapore's Dairy Farm has submitted application to the relevant government agencies to create a locally based distribution company.
Under Dispatch 1701/TTg-QHQT, the Ministry of Planning and Investment will approve a joint venture between Vietnamese Minh Van Trading and Production Company and the Republic of Korea's Lotte Shopping Company. The new entity will be called "Lotte Vina Shopping".
The joint venture plans to set up a chain of 15 stores in Ho Chi Minh City. The first store, worth US $50 million, will be created at Quang Trung Street in Go Vap district.
Vietnam has emerged as one of the most attractive retail markets in the world thanks to strong growth in consumer spending. The retail market grew by 20% between 2004-2005, and is estimated to be worth US $20 billion a year.
Domestic retailers are worried about a wave of foreign competitors entering the market in coming years. The Ministry of Trade has warned domestic firms about stronger competition once Vietnam joins the WTO. (VNA)
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