Tuesday, 22 Jan 2019

Domestic trade as driving force for economic growth

Updated at Friday, 18 May 2018, 13:40
The Hanoitimes - With an average growth rate of 10% per year, domestic trade is considered one of the main driving force for economic growth, especially during the process of global integration.
Vietnam is one of the most attractive market in the world, thanks to a population of over 90 million and high consumer spending, informed experts at the conference "The role of government agencies and enterprises in facilitating trade and services" on May 18.
Illustration photo.
Illustration photo.
 Consequently, in period 2011 - 2017, the average growth rate of retail sales and services revenue stood at 10% per year, reaching VND3.2 trillion (US$140 million) in 2017. 

Revenue from retail sales and services in the first four months is estimated at VND1.4 trillion (US$61.25 million), up 9.85% compared to the same period of 2017. In period 2006 - 2016, the growth rate of retail sales has been nearly doubling the average growth rate of GDP during the same period. 

However, in spite of high growth rate, there remain difficulties and challenges for domestic trade to grow, said Nguyen Van Hoi, Deputy Director of the Domestic Market Department under the Ministry of Industry & Trade (MoIT). Specifically, infrastructures system for trade and retail are spread unevenly, which are mainly concentrated at major cities. 

Meanwhile, the biggest challenge for enterprises, according to Dinh Van Thanh from Garmetn 10, is fake and low quality products. "Those products have directly impacted the development of enterprises."

For local enterprises to realize its full potential of domestic trade, Assoc.Dr. Hoang Tho Xuan, trade expert said, there should be encouragement and favorable conditions for leading corporations and enterprises to take the lead in the market. 

Besides, enterprises should focus on rural market by opening convenience stores, due to its huge potential for growth, especially for Vietnamese goods, said Xuan. In particular, there should be a complete supply chain from production to consumption, with a view to improve competitiveness. 

"Enterprises can expect a market with new order and structure, in which efficient supply chain management will prevent smuggling and trade fraud, as well as goods quality control and food safety," Xuan added. 

"Supply chain management should be addressed to facilitate modern trade."

The MoIT has proposed to the government the strategy for trade development in period 2025, with vision to 2035. The move is aimed to support local enterprises in expanding distribution network; applying e-commerce. It is expected that the strategy will facilitate a stronger growth of domestic trade in the future. 
Nguyen Tung
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