Retail network large, but not professional: MOIT

16:30' 02/05/2008 (GMT+7)
With such a market, many retailers but unorganised, the domestic market proves to be fragile, according to Hoang Tho Xuan, Director of the Department for Domestic Market Trade Policies. The rice price fever, which took place several days ago, is an example.
Hoang Tho Xuan, Director of the Department for Domestic Market Trade Policies
Problems exist not only in the rice distribution network, but in the distribution of other products as well. The bad distribution network does not mean that there are few distributors, but it means that the network is not professional. The state should be blamed for this as it still cannot draw up a good scenario for the forming of a healthy and suitable market.
What are the weakest points of the current retail network?
There are two weak points of the current retail network. As there is no pillar, the distribution network proves to be fragile, while the market is controlled by the psychology of sellers and buyers. If there is a rumour that prices will go up, sellers will stop selling in the hope of selling products later to get bigger profit. The ‘wait-and-see’ attitude of sellers creates an artificial fever, which pushes prices up, and prompts speculation.
Do you mean that the market will continue to experience blows as it did some days ago with the rice price until the current way of market organising is improved?
I can say that the distribution network of cement is okay, while the distribution networks of fertiliser, steel and ingot steel have problems. Producers can only make products, while they do not know where their products go.
Steel and fertiliser mills have sales agents, but the agents do not operate as agents in the true sense of the word. That explains why steel and fertiliser have fluctuated so heavily recently. The price increases in the world’s market make up 80% of the domestic price increases, while the improper distribution network makes up another 20% of the domestic price escalation.
Experts say that one problem now is that enterprises do not have large storehouses to store reserves of commodities. Do you think this problem must be settled right now?
In fact, many enterprises once had big land plots for storehouses. However, due to the loose management mechanism, many of them have been renting land to get money or turning the land plots into restaurants. And now, they complain that they do not have land for workshop premises.
How do you think Vietnam’s distribution network should develop in the time to come?
Hapro, Satra, Intimex and Fivimex prove to be good models for developing the retail network. However, the said retailers should still do a lot more work to improve themselves. Their role remained relatively dim in the last commodity fever.
What will the state do to develop the retail network?
The Ministry of Industry and Trade is drawing up a project on developing key distribution networks in order to ensure the sustainable development of the domestic market.
The ministry is going to focus on developing three key networks, the distribution network of strategic material products (petroleum, steel, fertiliser, medicine); the distribution network of general consumer products; and the distribution network of food and foodstuff products.