Foreign distributors seem to be making fat profit in Vietnam’s market, which explains why Metro Cash & Carry is entreating the Ministry of Planning and Investment MPI for permission to open more distribution points.
Foreign distributors seem to be making fat profit in
Vietnam’s market, which explains why Metro Cash & Carry is entreating the Ministry of Planning and Investment MPI for permission to open more distribution points.
Uwe Hoelzer, Director General of Metro Cash & Carry Vietnam, said that MPI agreed in the distributor’s investment licence granted in 2001 that Metro would open eight distribution centres. At that time, in 2001, Metro thought that eight would be enough for Vietnam’s market. However, the rapid development of the retail market Vietnam proves to be far beyond any expectations, and the eight centres are too modest if compared to the fast development.
Metro has lodged a proposal to allow it to open at least four more distribution points in Hanoi, HCM City, Dong Nai in the south and Nha Trang in the central region.
Metro is impatient to open more distribution points because it has opened all the points allowed by the investment licence. On September 19, 2007, Metro opened Hoang Mai distribution point in the south of Hanoi, which has the total surface area of 46,000 sq m. The Hoang Mai point has 300 staffs.
Hoang Mai has the total investment capital of more than $15mil, which means the distribution group has spent $120mil so far on its eight distribution points nationwide, fulfilling the first phase of its investment in Vietnam. The wholesale points are located in big commercial hubs including Hanoi, HCM City, Hai Phong, Can Tho and Da Nang. Last year, Metro opened an office in HCM City to gather goods for export to the Asian region.
Under Vietnam’s WTO commitments, as of January 1, 2009, Vietnam will open its distribution market to foreign distributors. However, Vietnam has been considering licencing foreign investors already in specific cases. The early comers to Vietnam, namely Metro, Big C and Parkson, are all making fat profit from the domestic market, and they all want to expand their business networks in order to conquer the market before 2009.
(Source: VNN)
