With its potential, advantages and position as the capital city, Hanoi has grown into a huge retail market which is forecast to continue to develop more strongly in the future.
Vietnam is now considered one of the fastest-growing retail markets in the world. Ho Chi Minh City and Hanoi are the two largest economic centres. In 2006, AT Kearney, a world-leading management consultant, rated Vietnam the eighth fastest-growing retail market in the world. To date, Vietnam has attracted many leaders in the retail world like Wal-Mart (US), Carrefour (France), Tesco (UK), Dairy Farm (Hong Kong), and South Asia Investment Pte (Singapore).
The capital city of Vietnam, which has an area of over 3,300 square kilometres and accounts for more than 10 percent of the country’s gross domestic product (GDP), is a huge market not only because it is home to 6.5 million residents, but it is the centre of the Red River Delta and joins the gateways to northern upland and mountainous areas. Hanoi also serves an important role in the "Two Corridors, One Economic Belt" strategy and serves as a gateway for the ASEAN community. Clearly, Hanoi’s retail market potential is huge.
Enormous market
With the target of making Hanoi a fair, competitive and connected market to serve the city’s socioeconomic development and orient the country’s market development, Hanoi has promulgated and put into practice many policies and mechanisms in the past years to promote trade, the retail market in particular, and has achieved positive results. In 2010, the total turnover of goods and sales in Hanoi reached VND885 trillion, accounting for 80 percent of retail sales in the north of Vietnam. The city is now home to nearly 300 centrally and municipally run units, and about 2,000 branches and representative offices of other provinces and foreign countries, which helped form a network with more than 2,500 concentrated transaction points. The dense network of stores all over the city makes Hanoi an enormous market.
In the coming years, Hanoi is planned to become a leading retail centre not only for the country, but also for the region. According to the Hanoi urban space development orientation, national and regional commercial and financial centres will be situated in three urban zones, namely Southwest Hanoi, North and East of the Red River. In more detail, Hanoi will develop five general wholesale centres in Soc Son, Thuong Tin - Phu Xuyen, Hoa Lac, Truc Son and Gia Lam which will be closely connected with central urban zones, satellite urban zones and traffic routes. Each centre will have an area of 20 - 50 hectares. Beside, the capital city is developing large-scale logistics centres in Soc Son, Phu Xuyen and other districts, each covering 150 - 200 ha.
Solutions to attract more investment into the commercial field
Hanoi will attract more domestic and foreign investors to invest in wholesaling and retailing networks in the city. To do this, Hanoi will first support local trading enterprises to strengthen and professionalise human resources. The city also has special preferential policies to attract students and postgraduates from prestigious Vietnamese and international universities to provide important personnel for the city commercial sector.
Hanoi will continue expanding the market by creating conditions for businesses to attend trade fairs in the country and abroad. The city will step up trade promotion programmes, develop market information systems, build agricultural branding support policies, organise trade fairs, and attend international trade fairs. It will facilitate city-based businesses, farms and villages to associate customers and business partners. Accordingly, businesses will be fully supported with planning information, time of implementation and administrative procedures. Besides, investors will be provided clear land with a leasing period of up to 50 years and even 70 years in special cases. Apart from tax incentives, investors of trade centres and supermarkets will be provided complete infrastructure systems (reaching the fence of their projects), including roads, electricity and water supply. They can also be provided soft loans.
The trade sector of Hanoi will work with concerned enterprises to overcome weaknesses and find solutions to improve competitiveness. In addition, the city will also continue improving administrative procedures, investment procedures and trade development planning, particularly commercial centres, supermarkets and market networks.
Currently, in the downtown, from Ring Road 2 to the heart of the city (including Hoan Kiem, Ba Dinh, Dong Da, Hai Ba Trung, and part of Tay Ho districts), existing supermarkets need revamping and new ones need to be built on absolute markets, business streets or areas where manufacturing factories, offices and apartments are displaced. In the area from Ring Road 2 to the Nhue River (including Tay Ho, Cau Giay, Thanh Xuan, Hoang Mai, and part of Tu Liem and Thanh Tri districts), existing supermarkets will be upgraded to improve service quality, modern facilities will be retained. New hypermarkets will be built on large streets, in new urban zones or on areas where manufacturing factories, offices and apartments are displaced. These areas will also have small markets built.
In the urban chain from the Nhue River to Ring Road 4 (including Ha Dong, Tu Liem, Thanh Tri, Hoai Duc, Dan Phuong, Thanh Oai and Thuong Tin, as well as urban zones in Me Linh, Dong Anh, Long Bien and Gia Lam), existing supermarkets will be kept while new markets will be built on trunk roads and urban zones. Existing supermarkets in Soc Son, Son Tay, Hoa Lac, Xuan Mai, Phu Xuyen districts and district towns will be upgraded and revamped, and new ones will be built to meet local demand.
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