Vietnam is an emerging market that is full of business potential. Even though it has its fair share of challenges that any typical emerging market faces in the region, it has fared well in terms of doing business.
In fact, the World Bank places the country at the 99th place out of 185 economies nationwide, during the year 2013. Vietnam is considered behind the economic giant China but is remarkable ahead of countries like Indonesia, India and Philippines.
With these, Hong Kong companies are already considering entering the Vietnam retail market. The retail market is initially tested by distributing and franchising at first. Many Korean food and beverage business companies are also on the retail business in Vietnam. In search of localization, companies sought established business associations in Vietnam as contacts.
Foreign Retailers in Vietnam
To avoid problems, foreign retails chose to work with local partners. Big supermarkets such as the French Big-C has more than ten local partners in order to secure the opening of other local supermarket outlets in the country. In Vietnam, establishing retail outlets require owners to pass the Economic Need Test or ENT. However, there are times that the assessment process cannot be too transparent. Foreign retailers learned to work with the local businessmen in order to warm things up.
Apart from the ENT, cooperating with local partners and distributors has the added benefit of enabling foreign entrants to build business networks and being better informed of the administrative and legal requirements in Vietnam. Foreign business aspirants learned to make use of translation services in order to communicate well with the local investors and future partners.
With Vietnam gaining macroeconomic stability, trade balance is also starting to move into surplus and state-owned enterprise reformations. Along with positive consumer market that is fairly young, as well as the rising middle class, Vietnam can look forward to a brighter retail market outlook in the future. This paves the way for international brands and conglomerates to penetrate the local market.
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