Local retailers in Vietnam are facing certain pressures in the market given the increasing penetration of foreign retailers into Vietnam recently because the market share is being split, which could present a risk of less business activity.

The domestic retail market is attractive to foreign retailers because of the high population of more than 90 million people at end-2015, stable economic growth and gradually increasing GDP per capita with a compound annual growth rate of 12% during the last ten years. There have also been improvements in the legal system related to investment activity and policies aimed at attracting foreign investment. Existing foreign retailers are actively expanding their retail chains, while new brands are looking at the potential of the market. In the meantime, domestic retailers such as Vingroup and Coop.Mart are also increasing the number of shopping centres to maintain market share. However, not all modern retail centres have performed well. Metro and Big C were "transferred" after many years of operating in the Vietnam market and the number of supermarkets / malls have increased and are now present in most of the big cities of Vietnam.

The development of more and more supermarkets and modern shopping centres has contributed to the change in consumption habits of Vietnamese people from shopping at traditional markets to modern shopping centres. In fact, however, the traditional market network market is still widespread and is the preferred choice of many people. I suppose traditional habits and perceptions may be changed, but it still takes time and practical experience. Therefore, both domestic and foreign retailers are actively expanding business activity to meet this potential demand. In the race for market share, many people worry about the "disadvantage" of domestic investors before the accelerated penetration of retail giants from Japan and Thailand. The anxiety is inevitable since modern consumers tend to display smart shopping habits, in which the quality and variety of designs will be the prioritised selection criteria, which are totally the advantages of foreign retailers, while being the disadvantages of many local retailers.

According to the development plan for the supermarket and shopping centre network of the Ministry of Industry and Trade until 2020 with a 2030 vision, the proportion of retail sales through the network of supermarkets and shopping centres accounted for only 30% in 2015 and this will increase to 45% by 2020. Currently, traditional retail channels still account for a large proportion of market share on a country level, especially in areas other than Hanoi and Ho Chi Minh City. Therefore, I believe that retailers still have many opportunities to promote their competitiveness. Nevertheless, domestic retailers should recognise their strengths and weaknesses sternly to design business strategies that are best suited for the consumer market in Vietnam. The key advantage of domestic retailers is their knowledge of regional cultures as well as the consumption habits of Vietnamese people, something foreign retailers might not have. Therefore, this key advantage should be promoted further so that domestic retailers come up with the most suitable products.

In summary, growth opportunities are still there for all retailers in the country. What matters is their ability to capture and capitalise on their opportunities! Those with real strength will be recognised in the near future!