EVFTA puts great pressure on Vietnamese retailers

The implementation of the European Union-Vietnam Free Trade Agreement (EVFTA), coupled with the increasing penetration rate of foreign businesses domestically, has led to great pressure being put on local retailers, according to business insiders
evfta puts great pressure on vietnamese retailers

The EVFTA offers plenty of opportunities while also posing numerous challenges to the Vietnamese retail market

Home to a population of approximately 100 million people, the Vietnamese retail market is able to boast huge potential for development, especially with the EVFTA coming into force.

Economic experts agree that the trade deal can be considered a driving force capable of promoting the development of the Vietnamese economy in general, with the local retail industry in particular set to enjoy a boost. With the EVFTA officially coming into effect on August 1, the domestic market has become more open, thereby making it easier for EU businesses, products, and services to gain access to the Vietnamese market.

Furthermore, local distribution firms can enjoy access to higher-quality goods imported from EU member states as a means of enhancing their capacity to do business within the domestic market.

This comes after a number of retail distributors began to emerge within the local market, including domestic and foreign enterprises who make up the majority of the market share and tend to compete with each other to lead the way in terms of new retail trends.

Giant groups that have become well-known brands include Auchan, Family Mart, Lotte, Central Group, Aeon, Circle K, and K Mart, all of whom have continuously strengthened their strategy aimed at penetrating and expanding the retail market locally which indicates the great potential of the Vietnamese retail market.

Despite these positives, the increasing rate of penetration and expansion of foreign businesses has caused great pressure and raised significant concerns among domestic retailers, with plenty of local goods suffering a sharp decline in relation to the market share.

Due to most Vietnamese enterprises being small and medium-sized with only access to limited resources, only a few big Vietnamese enterprises such as Saigon Co-op, VinCommerce, and Massan have been able to develop their own brand capable of competing in the local retail market. Indeed, other businesses have been forced to either shut down, enter into joint ventures, or halt operations altogether.

With the EVFTA having come into force, it is anticipated that large foreign enterprises will strive to continuously increase their market share at a rapid rate in the near future, therefore putting great pressure on domestic retailers.

According to economist Vu Vinh Phu, as a means of dealing with shortcomings and to be able to compete with the markets of other countries, Vietnamese retailers need to focus on key items such as farm produce and food. In relation to high-end products, Phu believes that local firms must concede ground to foreign partners, adding that domestic enterprises are not qualified enough to produce items such as home appliances, refrigeration unites, or more advanced products.

"It is essential to increase the quality of the traditional retail channel which still accounts for 80% of staple foods and foods. Attention should be paid to traditional markets while staying active in boosting co-operation with foreign enterprises in Vietnam, in addition to competing with them”, Phu emphasises.

In order to limit the negative impacts caused by the EVFTA, distribution and retail businesses must be careful when studying the contents and internal rules in order to be fully prepared to capitalise on opportunities brought about by the trade deal.

Local firms should move to strengthen links and co-operation ties with both domestic and foreign partners to take advantage of technology and market management. This should be done as a means of enhancing the ability to become involved in the global value chain, whilst also improving quality, added value, and market competitiveness, Phu adds.

Source: VOV
english.vov.vn

Related News

Revising policies to adapt to two-way impact of FTAs

Revising policies to adapt to two-way impact of FTAs

VCN - One of the most obvious positive impacts of Free Trade Agreements (FTAs) is to promote export growth, thereby contributing to increasing state budget revenue. However, the implementation of FTAs ​​also has a negative impact on state budget revenue under commitments on tariff reduction and elimination.
EVFTA strengthens Vietnam

EVFTA strengthens Vietnam's attractiveness to European investors

VCN - The Vietnam - EU Free Trade Agreement (EVFTA) has been in effect for four years (August 1, 2020). However, the level of benefits received from this new generation FTA is divided and different among businesses.
EVFTA boosts Vietnam’s exports to Europe

EVFTA boosts Vietnam’s exports to Europe

VCN - The EVFTA has strengthened Vietnam’s attractiveness to European investors, and has significantly boosted Vietnam’s exports to Europe.
Taking advantage of EVFTA: "It

Taking advantage of EVFTA: "It's impossible for everyone's house to shine brightly"

VCN - According to experts, the trend of the EU market is to increase technical barriers when reducing tariff barriers. It can be easily seen that as soon as the EVFTA took effect, the EU made many announcements related to rules for facilities raising and transporting aquatic animals, or increasing regulations on requirements for animal health...

Latest News

VN

VN's food processing industry struggles to improve quality and value chain integration

Despite accounting for 19.1 per cent of Việt Nam’s processing sector, the food processing industry has been struggling with major issues such as poor-quality raw materials and subpar value chain integration, said industry insiders and economists.
Approach strategy of the seafood industry when implementing UKVFTA

Approach strategy of the seafood industry when implementing UKVFTA

VCN - As one of Vietnam's strong export industries to the UK, especially when the Vietnam - United Kingdom of Great Britain and Northern Ireland Free Trade Agreement (UKVFTA) comes into effect, with a detailed information approach strategy, it has created a great driving force to promote the export of Vietnamese seafood products to this market.
Mid-November: Vietnam

Mid-November: Vietnam's trade volume matches 2023 total, eyes record-breaking growth

VCN - By mid-November 2024, Vietnam's total import-export turnover reached an impressive US$681.48 billion, equaling the full-year trade figure for 2023
Vietnamese enterprises facing challenges from cross-border e-commerce platforms

Vietnamese enterprises facing challenges from cross-border e-commerce platforms

VCN – In recent years, with the rapid development of cross-border e-commerce (CBEC) platforms, domestic enterprises in Vietnam have been facing numerous difficulties and challenges.

More News

Vietnam, Malaysia eye new milestone in trade ties

Vietnam, Malaysia eye new milestone in trade ties

The official visit to Malaysia from November 21-23 by Party General Secretary To Lam is expected to open up new opportunities for and mark a new milestone in the economic and trade cooperation between Vietnam and Malaysia. Vietnam and Malaysia are key economic, trade, and investment partners. Their economic and trade ties have steadily grown since the two nations established diplomatic relations in 1973.
Shrimp exports surge in 10 months, generating 3.2 billion USD

Shrimp exports surge in 10 months, generating 3.2 billion USD

Vietnam’s shrimp exports in October reached US$394 million, a strong 24% increase year-on-year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
Vietnam’s exports to the U.S. near US$100 billion milestone

Vietnam’s exports to the U.S. near US$100 billion milestone

VCN - By the end of October, Vietnam's exports to the United States approached US$100 billion, reaffirming its position as Vietnam's largest export market.
From the “abnormal” coffee price, worries about the new crop

From the “abnormal” coffee price, worries about the new crop

VCN - The Vietnamese coffee industry enters the new crop with the question of what is a reasonable price to ensure benefits for coffee growers while still retaining international consumers.
What obstacles limit the market share of Vietnamese goods in the UK?

What obstacles limit the market share of Vietnamese goods in the UK?

VCN - Vietnamese goods account for only about 1% of total imports into the UK market. One of the reasons is that they have not yet built their own brands and have not focused on effective strategies and approaches to market information.
Why seafood exports to some Middle Eastern Countries are stalled

Why seafood exports to some Middle Eastern Countries are stalled

VCN - Several shipments of seafood exported to certain Middle Eastern countries have been delayed due to legal challenges related to consular legalization procedures. This has created significant bottlenecks in accessing these markets.
Storm No. 3 destroys profits of many insurance companies

Storm No. 3 destroys profits of many insurance companies

VCN - Due to the impact of storm No. 3, the business results of the third quarter and the first 9 months of 2024 of the insurance sector have been significantly affected. This requires more efforts from businesses for the results of the whole year 2024.
Vietnam, Malaysia eye golden partnership opportunities in Halal industry

Vietnam, Malaysia eye golden partnership opportunities in Halal industry

Cooperation in the Halal industry can help Vietnamese products reach nearly 2 billion Muslim consumers worldwide, representing over 24% of the global population, according to Malaysia’s Minister of Investment, Trade, and Industry Zafrul Abdul Aziz.
Tra fish sector aiming for production, processing greening for sustainable development

Tra fish sector aiming for production, processing greening for sustainable development

Greening production and processing to meet export requirements is both a trend and a necessity for many industries, including the tra fish sector.
Read More

Your care

Latest Most read
VN

VN's food processing industry struggles to improve quality and value chain integration

Despite accounting for 19.1 per cent of Việt Nam’s processing sector, the food processing industry has been struggling with major issues such as poor-quality raw materials and subpar value chain integration, said industry insiders and economists.
Approach strategy of the seafood industry when implementing UKVFTA

Approach strategy of the seafood industry when implementing UKVFTA

VCN - Mr. Nguyen Hoai Nam, Deputy General Secretary, Vietnam Association of Seafood Exporters and Producers (VASEP), said that the advantage that UKVFTA brings is that the main products of the seafood industry enjoy 0% import tax to the UK, especially key
Mid-November: Vietnam

Mid-November: Vietnam's trade volume matches 2023 total, eyes record-breaking growth

By mid-November 2024, Vietnam's total import-export turnover reached an impressive US$681.48 billion, equaling the full-year trade figure for 2023
Vietnamese enterprises facing challenges from cross-border e-commerce platforms

Vietnamese enterprises facing challenges from cross-border e-commerce platforms

VCN - E-commerce platforms have emerged as crucial distribution channels, enabling goods to reach consumers quickly and conveniently.
Vietnam, Malaysia eye new milestone in trade ties

Vietnam, Malaysia eye new milestone in trade ties

The official visit to Malaysia from November 21-23 by Party General Secretary To Lam is expected to open up new opportunities for and mark a new milestone in the economic and trade cooperation between Vietnam and Malaysia. Vietnam and Malaysia are key economic, trade, and investment partners. Their economic and trade ties have steadily grown since the two nations established diplomatic relations in 1973.
Mobile Version