Duong Duy Hung, the Ministry of Industry and Trade (MoIT)’s Planning Department, made the statement during a recent meeting with the Prime Minister’s economic consulting team.
Modern trade models now accounts for some 25% of Vietnam’s trade system
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Hung was concerned that the remaining 75% of the country’s traditional trade system will be also likely under the management of foreign firms if no suitable policies are taken timely.
Vu Viet Ngoan, head of the Prime Minister’s economic consulting team, said that shortcomings of Vietnam’s trade firms are poor chain governance and limited financial status. FDI firms, meanwhile, have advantages in the issues so that they have been successful in the domestic market for recent years.
He suggested that the (MoIT analyzes specific impacts of FDI firms on the domestic economy besides making forecast on the trends of the local trade and e-commerce next time.
Ngoan also said that the board reported to the Prime Minister a proposal to establish a board specializing in directing and coordinating the national e-commerce development.
The MoIT has recently also drafted a strategy on domestic trade development, in which it targets the GDP of the domestic trade sector will be more than VND419 trillion by 2020, VND700 trillion by 2025, and VND2.3 quadrillion by 2035, contributing roughly 15.5-16% to Vietnam’s GDP by 2030.
The annual growth rate (excluding the price factor) of the country’s total revenue from retail sales of goods and services for the period from now to 2020 will average at 13% per year, and rise to 14% in 2021-25. The value will reach some VNĐ5.8 quadrillion by 2020, VNĐ11 quadrillion by 2025 and VND44 quadrillion by 2035.
Domestic economic sector will account for some 80% of the country’s total retail sales revenue by 2020, while the foreign direct investment (FDI) sector will make up about 20%.
The proportion of modern trade models will be roughly 30%, or nearly VND1.7 quadrillion, by 2020. It will rise to 35% or VNĐ3.8 quadrillion by 2025 and 50% or VND22 quadrillion by 2035.
Modern trade models such as commodity exchanges, auction centers and franchises will be also developed, and e-commerce will be boosted to have more than 60% of small- and medium-sized enterprises (SMEs) participating in e-commerce by 2020 and 80-90% by 2035.
For the period after 2025, the GDP of the domestic trade sector will reach some VND2.3 quadrillion by 2035, contributing some 15.5-16% to Vietnam’s GDP by 2030.
The annual growth rate of total retail sales of goods and services will average at 14.5% per year in the period and reach over VND11 trillion by 2025 and VND44 quadrillion by 2035.
The trade system in the country’s urban areas will be streamlined to meet the standards of ASEAN 4 by 2035.
According to the MoIT, besides international surveys, the strategy was also drafted based on data during the period from 2011 to 2015 when the GDP growth rate of the domestic trade sector was 9.05% per year.
Vietnam has been an attractive destination for foreign investors thanks to its relatively young population, a rapidly expanding middle class and high living standards. Almost 60% of Vietnam’s population of roughly 93 million people is under the age of 35, and is becoming better educated and richer with average income per capita last year jumped to $2,200 from a meager $433 in 2000.
