Competition challenges from CPTPP for distribution and logistics sectors

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Conference on Distribution, Electronic Commerce and Logistics Sectors in Vietnam: opportunities and Challenges from CPTPP Agreement. Photo: H. Diu

This was stated at a conference on Distribution - E-Commerce - Logistics Sectors in Vietnam before opportunities and challenges from the CPTPP Agreement organised by the Vietnam Chamber of Commerce and Industry (VCCI) under the framework of Australia‘s programme to support Vietnam's economic reform (Aus4Reform) on the afternoon of November 25 in Hanoi.

At the conference, Nguyen Thi Thu Trang, Director of the VCCI's Centre for WTO and Economic Integration, said the distribution sector, especially the retail market, has many opportunities for development thanks to commitments in the CPTPP and integration in general.

Therefore, this sector has the opportunity to increase market size thanks to GDP growth and increases in people's income. According to the World Bank, the CPTPP will help increase Vietnam's GDP by 1.1-3.5 percent. In addition, the CPTPP also helps increase the supply of goods for the retail and distribution sectors from commitments on trade in goods.

Besides, the CPTPP is an opportunity to expand e-commerce activities, especially cross-border e-commerce, as CPTPP commitments will create a safe, stable and predictable legal framework, as a premise to promote e-commerce.

However, for distribution and e-commerce industries, the VCCI representative said the challenge in the CPTPP is competition pressure. Therefore, businesses in this sector need to improve their competitiveness, improve supply of goods, control the quality of goods, as well as management agencies must take measures to support the development of distribution channels and create a link among manufacturers - distributors – customers.

However, in the CPTPP, the most affected sector is the logistics. According to Trang, because access to the CPTPP market has not changed much compared to the WTO, the competition is not remarkable, so it will not much affect domestic logistics. Therefore, the CPTPP opens up opportunities for cooperation, investment, scale increase, business efficiency as well as cuts business costs for logistics enterprises.

But the other impacts of the CPTPP increase import and export activities, increasing the source of customers for logistics. Therefore, businesses in this sector must handle issues related to freight, customs, import and export.

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From these analyses, experts and enterprises participating in the conference said Vietnamese enterprises are not the only group enjoying these benefits, so they must plan to overcome the limitations and improve the competitiveness by improving services, applying information technology, improving the quality of human resources and enhancing cooperation.