Domestic trade promotion helps spur economic growth

The Ministry of Industry and Trade (MoIT) emphasized the important role played by domestic trade and services in meeting the growing consumption demand and spurring economic growth over recent years at a workshop in Hanoi on May 18.

Although there has been a slowdown in the growth rate of retail sales of goods and consumer services since 2011, the 2006-2016 average growth rate of this sector was kept at 1.5-2 times higher than that of GDP in the same period.

Tran Thi Phuong Lan, Deputy Director of the Hanoi Department of Industry and Trade said domestic trade and services have seen an upswing in recent times. However, the current trading infrastructure is facing numerous difficulties in smaller areas as trade centers, supermarkets and traditional markets are mostly concentrated in major cities.

Although the expansion of traditional markets has ground into a halt recently, they still hold an important role and maintain their competitiveness compared to modern distribution channels. "There is a tough competition in the development of e-commerce infrastructure between domestic and foreign invested enterprises. The fact is that domestic enterprises fail to develop retail systems but foreign retailers are going into full swing," she noted.

Nguyen Van Hoi, Deputy Director of the MoIT’s Domestic Market Department said the policy of developing the domestic market to boost local consumption has been broadened throughout the nation, getting support from businesses and people and yielded outcomes.

Between 2011 and 2017, total retail sales of consumer goods and services soared by 10% each year, reaching close to US$156.54 billion in 2016 and US$141.63 billion in 2017. The figure was estimated at around US$61.39 billion in the first four months of 2018, a year-on-year increase of 9.85%.

Trading infrastructure have attracted foreign investment and displayed a drastic uptrend in big cities. There were about 8,540 markets nationwide by the end of 2017, nearly 75 of which were in rural areas. Most of the markets focus on retail while only 0.97% of which was wholesale markets.

Meanwhile, there were 957 supermarkets in 62 out of 63 provinces and cities. Most of them are located in major cities and downtown areas.

Notably, the numbers of supermarkets and shopping malls in the five cities of Hanoi, Hai Phong, Da Nang, Ho Chi Minh City and Can Tho alone account for 47% and 50% of the total, respectively.

Nguyen Van Hoi noted that to give a big boost to trade and services nationwide, the MoIT will continue working hand in hand with relevant ministries, localities and sectors to develop trading infrastructure, revamp policies aimed at attracting more investment in this areas, and provide human resource training, especially in management skills.