Modern Retailers in Transition Economies

Abstract

This article reports the findings of a study on modern domestic retailers in Vietnam. The authors based this study on (1) a survey of fifty-six firms that control almost all the modern retail format stores in Vietnam, (2) in-depth interviews with chief executive officers (CEOs) and government officials, and (3) store visits and observations that were carried out by the authors. The authors discuss the operation and retail renovations of local modern retailers, the structure and the background of competitors, the problems retailers face, and their prospects for future development. These findings provide a comprehensive picture of modern retailers in Vietnam and have significant implications for policy makers as well as for local and foreign retailers.

Constrained consumer practices and food safety concerns in Hanoi

“…Research conducted in Vietnam demonstrates the importance of traditional vending systems and focuses mainly upon specific parts of the retail system -e.g. on street vending (Jensen and Peppard, 2007), on supermarket development (Maruyama and Trung, 2012), on wet markets (Geertman, 2011), on implications of supermarket development for poor consumers (Figuié and Moustier, 2009), or describe the food system transformation through a demand analysis (Mergenthaler et al, 2009).…”

Retail transitions in Southeast Asia

“…Foreign retailers are typically associated with certain advantages vis-à-vis the modernization of food retail, such as the provision of an expanded variety of products and services and the introduction of competition that is assumed to contribute to market efficiency (Maruyama and Trung 2011). As compared to small traditional retailers, large foreign retailers are considered to be more capable in improving the health and safety conditions of production systems, thereby alleviating the food and safety concerns of consumers that have been exacerbated by recent food crises (Manalili and Lapar 2008).…”

“…Vietnamese consumers, in particular, seem to stand out in terms of the importance placed on the freshness of produce (Maruyama and Trung 2011;Yang et al 2011), which may be explained by the fact that less than half of modern distribution outlets in Vietnam are able to stock fresh food due to the difficulty of sourcing and distributing perishable products locally (Cadilhon et al 2006). If there remains a pervasive need for wet markets in Southeast Asia even against the backdrop of foreign retail expansion, part of the reason for this -apart from notions of perceived freshness -relates to the role of low-income working classes in creating a continual demand for the low food prices that can only be found in wet markets.…”

“…Local retailers have, for instance, shifted to a focus on service rather than price to remain competitive, as in the case of Singapore retailers that have responded to Japanese departmental stores by refocusing on local shoppers (Davies 1993), or small businesses in Thailand that have attempted to improve their management of customer relationships to maintain their competitive advantage (Cheevapruk and Walsh 2012;Chengsuvadee 2006;Mandhachitara 2000). Domestic retailers have also sought to undertake strategic alliances among themselves to limit competition and achieve enhanced economies of scale (Feeny, Vongpatanasin, and Soonsatham 1996;Manalili and Lapar 2008), but strategic alliances are often difficult to form because of the lack of trust and common ground, as Maruyama and Trung (2011) find in the case of Vietnamese retailers.…”

The Influence of Service Quality on Customer Loyalty Intentions: A Study in the Vietnam Retail Sector

“…According to Euromonitor International (2014), the retail sector recorded a growth of 140 per cent during the five-year period from 2008 to 2013, and it has a positive outlook in the next ten years. Notably, retail modernization has been identified as the main driver of such development (Maruyama & Trung, 2012). Modern retailers such as supermarkets, hypermarkets, shopping centers and convenient stores are expanding rapidly in the whole country, especially in major cities.…”