Giant property developer Vingroup, which is currently expanding at speed in the retail sector by opening two Vinmart stores a day, signed cooperation agreements with 250 local firms yesterday in a move to strengthen the domestic retail sector in the face of increasingly fierce competition from foreign players.
The agreement involves suppliers of food, cosm
etics, stationery, toys, household appliances, fresh foodstuffs, and fashion and textiles from 18 cities and provinces.
Big retailers usually force suppliers to pay rebates of between 17 and 25 percent, rather than making consumers pay more at the till.
Vingroup’s decision to give up this revenue will be a lot of help to local suppliers who are struggling against a flood of imported products.
Suppliers of fresh meat, fish, poultry, fruit and vegetables can get their products on the shelves of hundreds Vingroup’s mini-marts and supermarkets without having to pay for promotions, discounts or rebates, said the group’s vice chairman, Le Khac Hiep.
The incentive will also help local suppliers reinvest in product quality and improve safety and hygiene standards, he added.
He also said that as Vietnam is rapidly integrates into the global market through free trade pacts, local retailers and domestic producers are under mounting pressure.
The aim of Vingroup’s incentive program is “to promote domestic production and to build national brands with international standards to best serve the local consumers”, the vice chairman said.
Vingroup launched its retail chain in 2010. Since then it has opened nearly 700 stores nationwide and said it will double its target to 2,000 outlets this year.
In the first quarter of this year, Vingroup’s earnings from its retail business quadrupled from the period last year to VND1.65 trillion ($74 million)
