VietNamNet Bridge – Analysts have warned that once the Metro supermarket falls into the hands of Thai owners, Vietnamese products will be replaced by Thai products.

By taking over Metro, Thai would hold the biggest wholesale network in Vietnam with 19 supermarkets mostly located in big cities and would become a “major player” in the Vietnamese distribution market.

Metro, though once managed by a German Group, has been mostly distributing Vietnam-made products which account for 90 percent of the total products available there.

However, analysts think that once the Thai company takes over Metro, they would fill the supermarket chain with Thai products, as they are doing with Family Mart in HCM City.

In early 2013, Family Mart, managed by a joint venture between Vietnamese Phu Thai Group and Japanese Family Mart, was sold to Thai Berli Jucker (BJC) owned by Chearavanont, a Thai billionaire.

Within a short time, the Thai investor changed the supermarket’s name to B’Mart and changed the business strategy with 60 percent of the products displayed at the chain from Thailand instead of from Vietnam or Japan.

Observers noted that Thai products have become more favored by Vietnamese, who have shunned cheap and low-quality Chinese goods, and seek other supply sources of goods, especially consumer goods.

According to the General Department of Customs (GDC), in 2013 alone, Vietnam imported $6.31 billion worth of consumer goods, including household-use products, dry food and sweets.

The BJC’s move to buy Metro to expand its business in Vietnam is believed to be followed by other Thai investors.

Busaba Butrat, the Trade Counsellor of the Thai Embassy in Vietnam, also said that many Thai investors are considering doing business in Vietnam because Vietnam is very attractive in the eyes of Thai retailers with a young population and improved living standards.

If this occurs, more and more Thai products would be brought to Vietnam, thus putting pressure on Vietnamese products.

Dinh Thi My Loan, chair of the Vietnam Retailers’ Association, warned that Thai goods would dominate the domestic market, especially from 2015, when many import items enjoy a zero percent tariff within the framework of the ASEAN free trade agreement.

Vu Minh Phu, chair of the Hanoi Supermarket Association, noted that Thai company have been following a very reasonable strategy to “conquer” the Vietnamese market.

They have organized four large-scale trade fairs in Vietnam to popularize Thai products, and introduce their products to travelers and develop the domestic agent network.

“Many Thai investors are present in the food processing industry in Vietnam. Once they can obtain large distribution networks, they will have more opportunities to popularize Thai products in the Vietnamese market,” Phu said.

“We strongly recommend that the government set up regulations forcing foreign retailers to sell Vietnamese goods at their supermarkets at certain levels,” he said.

Phuoc Ha