Traditional retail channels prevail

An opposite trend

According to data from the General Statistics Office of Vietnam (GSO), total retail sales of goods and consumer services in the first half of 2023 were estimated at VND2.717 trillion, a year-on-year increase of 11.7 percent.

Saigon Co.op has organized various sales promotion programs to stimulate consumer demand - Photo: Mai Ca

The GSO said that the total retail sales of goods and consumer services in the first half of 2023 grew at a higher rate compared with the same periods of the past five years and were 14.4 percent higher compared with the first half of 2019 - prior to the COVID-19 pandemic. This was a good sign in the context of decreased consumer demand and numerous difficulties still facing the economy.

Nguyen Anh Duc, President of the Association of Vietnam Retailers (AVR) and General Director of Saigon Co.op, said that unlike past times, in the first half of 2023, businesses trading in a traditional manner grew at a higher rate compared with modern retailers. Modern trade channels contributed 22-23 percent to domestic trade value, lower than that in the first half of 2022.

“This situation reflects two facts: 1) consumers tend to tighten their spending; and 2) residents of remote areas cannot go to modern shopping centers. This explains the decline in modern retail sales and increased sales via traditional channels,” Duc analyzed.

Moreover, in Duc’s opinion, digital transformation has yet to meet the requirements of a digital economy, as well as to serve consumer demand for shopping through modern retail channels.

Vitalizing modern retail channels

Each modern retailer takes specific measures to attract customers. For example, WinCommerce is implementing a strategy under which WinMart+ stores at the core of urban areas sell new, unprecedented products, while those in rural areas sell lower-cost products to enable consumers to save money. Meanwhile, Saigon Co.op said it will implement a suitable pricing strategy to enhance its competitive advantages, while digitizing management and applying information technology to improve management effectiveness.

Consumers tend to tighten their spending

Foreign retailer Aeon Vietnam has chosen to maintain price stability, especially for essential consumer goods. The company will adjust the list of products sold under its promotional program every three months to better meet customer demand. Aeon Vietnam will also pilot new retail models such as small- and medium-sized supermarkets with MaxValu brand to meet changes in customer demand.

The industry and trade sectors of localities have applied appropriate policies to encourage modern retail development while launching large-scale sales promotion programs. Ho Chi Minh City, for example, has launched a three-month sales promotion program lasting from June 15 to September 15, 2023.

Nguyen Nguyen Phuong, Deputy Director of the Ho Chi Minh City Department of Industry and Trade, said that the program attracted the participation of about 3,000 companies with more than 7,000 sales promotion activities. “We expect this program will enable consumers to buy quality products at attractive prices because the maximum discount rate may reach 100 percent, contributing to increasing sales for the retail sector,” Phuong added.