Vietnam retailers bristle at coercive rules

A draft law requiring all supermarkets in Vietnam to open through holidays and provide online sales and delivery services has angered retailers.

They say rules cannot set for marketing strategies that are decided by businesses based on their own assessment of market conditions.

The provision in the Decree of Development and Distribution Management, proposed by the Ministry of Industry and Trade, will apply to retail outlets that have an area of at least 250 square meters (2,690 square feet), and malls with more than 10,000 square meters (over 107,600 square feet).

The new rules also say supermarkets and malls can only have a maximum of three discount events a year, with 30 days at the most for each event, and 70 percent of all items must be discounted at such events.

Supermarkets and malls also need to open from 10 a.m. to 10 p.m. every day, including holidays. They must offer delivery service and online shopping to customers, the bill says.

Whether a supermarket offers delivery service and online sales or not depends on the strategy that a business chooses to employ, said Dinh Thi My Loan, president of the Association of Vietnamese Retailers (AVR).

The number of discount events and their nature should be for the retailers to decide, she stressed, adding that the regulation should be removed from the bill, she said.

Experience from other countries in the region shows it is not practical for the government to pack too many goals into a draft law, she said, adding: “The stated goals are too broad and unconvincing.”

Previously, the Vietnam Chamber of Commerce and Industry (VCCI) also called this provision “coercive” in a letter sent to the Ministry of Industry and Trade.

The bill intervenes too deeply in the right of businesses to operate the way they want, and does not engage with the larger picture of the distribution system in the country, the letter said.

VCCI suggested that existing problems and potentials for the national distribution system should be studied in more detail before drafting new rules.

The Ministry of Industry and Trade has said that it will continue to research and listen to suggestions while completing the draft law.

As of last year, Vietnam had 800 supermarkets, 150 malls and 9,000 traditional markets, apart from 2.2 million or so convenient stores.

Vietnam is considered an emerging market for retail expansion and was ranked 6th last year in the Global Retail Development Index by consulting firm A.T. Kearney.