Building Trade Centre, Supermarket System in Hanoi: In Need of Stronger Drives

In 2010, the total turnover of goods and service revenues in Hanoi reached VND885 trillion, accounting for 80 percent of retail sales in the north of Vietnam. This result was significantly contributed by trade centres and supermarkets in the capital city. Big names like Vincom, Intimex, Hapro Mart and Metro have become gradually familiar to consumers and created a new shopping style and trend for the citizens. However, the development of trade centre and supermarket system in the city still exposes numerous weaknesses like limited presence, small area and inconsistent quality. To deal with such limitations, Hanoi will build an additional 350 supermarkets and trade centres from now till 2020 - a five-time increase from now. This is a challenging target for Vietnam and it requires consistent and effective policies to bring it into practice.

According to a survey by the Hanoi Department of Trade and Industry, as of June 2009, the city had 11 commercial centres. In spite of accounting for about 16 percent of the country's commercial centres, the number of trade centres in the capital city was equal to some 30 percent of Ho Chi Minh City, the largest economic hub in Vietnam. The distribution of Hanoi-based commercial centres is inappropriate because they mostly concentrated in business districts. This fails to reflect the picture of Hanoi trade and expanded commercial space development plan today.

 

In addition to the small number, the size of trade centres in Hanoi is primarily small or medium, with a total floor area of nearly 412,000 square metres, or an average of 37,000 square metres each, which is similar to a so-called second-class trade centre. Me Linh Commercial Centre (Me Linh district) is the largest one with 80,000 square metres. The limited scope reduces operating efficiency, level and service quality while rents are rising, thus causing negative impacts on producers and consumers.

 

In fact, operations of commercial centres are limited to some services like shop and supermarket, office, entertainment-sports, restaurant, ATM and transportation. Another weakness is the absence of regional and international commercial centres, wholesale centres and logistics centres in the capital city. This proves that functions of trade centres have not yet brought into full play.

 

According to the Hanoi development planning, the city will have 162 trade centres by 2020, an increase of 15 times from now. Accordingly, five regional wholesale centres will be set up in Gia Lam, Soc Son, Chuong My, Thach That and Thuong Tin, with each centre covering from 150 ha to 200 ha.

 

The new commercial centres will be located in suburban areas where traffic systems are favourable or are close to industrial centres. At the national scale, two shopping centres will be formed in Dan Phuong and Thach That districts. Each will locate on an area of some 500,000 square metres. International trade centre is expected to be located in the southwest of Hanoi and to be built together with international trade fair centres, convention centres, hotels and offices. With great targets for the next 10 - 20 years, Hanoi necessarily mobilises enough investment capital and ensures land clearance and construction progress.

 

The Department of Industry and Trade said Hanoi had 62 operating supermarkets, accounting for 15.5 percent of the country's total and covering on a land area of 98.412 square metres, or approximately 1,600 square metres each. Particularly, general supermarkets occupy 74,531 square metres and specialised supermarkets cover 23,881 square metres.

 

Like trade centres, the supermarket network is mainly concentrated in business districts, Ha Dong and Son Tay districts. Only 14 out of 29 districts have supermarkets. This reality shows that the modern retailing has not been present in some rural areas. Besides, it also shows that consumption level in some areas has not caught up with other areas in the city, especially business districts. On the other hand, the supermarket network is insufficient in number (both specialised and general), reasonable in size and limited in presence. In reality, with fast economic growth and urbanisation, living standards of Hanoi citizens have increased considerably in recent years. Shopping at supermarkets has become a demand and routine of Hanoians but they fail to meet the demand because of the shortage and irrational location of supermarkets.

 

With respect to supermarket quality, a very few of supermarkets are modern and spacious while a majority are cramped. Many even do not have parking areas and toilets. Goods are profuse at supermarkets but foods, fresh vegetables and seafood make up small proportion. At some supermarkets, the quality of goods lacks guarantee for standards, quality and safety.