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The growth of the retail sector in Vietnam is impressive, with market size set to reach 180 billion USD in the next three years. Yet, getting a slice of the pie is not a piece of cake, especially for startups selling fresh farm produce since there remains a bottleneck in approaching distribution channels despite the ever growing demand for the products.
Start-ups come to such conferences for retailers to approach distributors as if they want their products on shelves, they need to reach big retailers. Yet, it’s not easy for them.
Nguyen Van Tuan, Deputy Director of New Generation Agriculture Corporation said “We have to convince each consumer that our products are organic. Only if an adequately large number of consumers have faith, will they start accepting the products and using them. We need retailers to do that, but convincing retailers is not a cinch.”
There will be some 1,500 supermarkets in Vietnam by 2020 according to the Ministry of Industry and Trade’s planning for nationwide supermarket network, suggesting an exponential growth of the retail sector. However, strict entry requirements, such as quality certification and labels, among others, are challenging enterprises.
According to Le Ngoc Anh, founder of Le Gia Fish sauce, small enterprises find its hard to approach big retailers due to high commission, delivery terms and many other terms. So they have to survive before we thrive.
Meanwhile, supermarkets also want to seek new products with competitive price to attract consumers. However, many enterprises producing and distributing fresh farm produce fail to meet paperwork requirements.
Nguyen Thai Dung, Deputy General Director of Big C Thang Long Supermarket Co Ltd said, each supermarket has its own set of qualifications for selecting commodities to distribute, including its brand, packaging, pricing and quality. Suitability of the goods for clients of the supermarket is also among qualifications.
Le Viet Nga, Deputy Director of Domestic Market Department under the Ministry of Industry and Trade said: “I think it is mostly a supply-demand matter as the current number of supermarkets in Vietnam is now only some 1,000. Entering supermarkets is a legitimate aspiration of any enterprise. Therefore, Vietnam’s authorities will try to create optimal conditions for Vietnamese goods to enter supermarkets.”
Given the hardships facing small enterprises, supermarkets should be more flexible to support the firms’ growth. If supermarkets stick with rigid conditions, start-up enterprises may be short-lived as their goods rot, unconsumed.-VNA
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