Hanoi's industry and commerce flourish after 15 years of administrative expansion

Hanoi is calling for investment in shopping malls and department stores to develop a modern retail network and contribute to making the capital city a commercial hub of Vietnam and ASEAN, said Tran Thi Phuong Lan, Acting Director of the Hanoi Department of Industry and Trade.

Lan said enterprises are encouraged to expand their business network of modern services, including shopping malls, supermarkets, convenience store chains, online sales, and vending machines, thus completing the commercial infrastructure synchronously.

"We will support businesses to remove difficulties and speed up the progress of commercial infrastructure projects in the city, especially in suburban districts," Lan said.

The bright spot

After the implementation of Resolution 15 of the 12th National Assembly, which expanded Hanoi's administrative boundaries, Hanoi's industry and trade have experienced favorable growth for the past years, supporting the city's economic development.

Bananas are sold using the eCommerce platform. Photo: Kinhtedothi.vn

A report from the Hanoi Department of Industry and Trade showed that industrial production activities have shifted in a positive direction and achieved a good growth rate, significantly contributing to the overall growth of the city's GRDP. Specifically, the annual industrial value added averaged 9.2% in 2011-2015, 7.43% in 2016-2020, and 6.7% in 2021-2022.

"The processing and manufacturing industry had the largest share (about 91%). High-tech is increasingly applied in several fields, such as digital control, automation, nanotechnology, and biotechnology," according to the report.

Hanoi's key industrial product development program, implemented by the Department of Industry and Trade since 2008, has formed key industrial product groups. Specifically, in 2010, the city had 53 products from 48 enterprises recognized as key industrial products. The figure increased to 196 products from 132 enterprises in 2022.

The key industrial products of the city belong to the groups of mechanical and manufacturing industry, power electronics, information technology, textile, leather and footwear, agricultural products and food processing industry, chemical industry, pharmaceutical products and handicrafts.

Enterprises whose products are recognized as key industrial products are the core enterprises of the capital industry, which improve technology, create new products and contribute to Hanoi's industrial development.

E-commerce is growing rapidly. Hanoi's e-business index (EBI) ranks second in the country in 2022. Photo: Kinhtedothi.vn

Despite challenging economic conditions such as low demand for goods and reduced purchasing power, Hanoi's commercial activities are still thriving. The average total retail sales of goods and social consumption services increased by 12.84% in 2011-2015, 9.14% in 2016-2020, and 9.3% in 2021-2022. The scale of total retail sales of goods and services for social consumption in 2022 hit about VND698 trillion (US$30.2 billion), nearly 3.4 times higher than in 2010.

The commercial sector has the largest share (59.3% on average). Payment methods based on modern technology and e-commerce account for about 7% of total retail sales of goods and services. With the supply and demand of goods in the area is guaranteed, there is no shortage of goods leading to price increases, especially during holidays and Lunar New Year. In addition, since 2011, the Department has organized many training courses on modern types of trade and services for businesses in the area.

The department has also proactively implemented many solutions to promote e-commerce activities, maintain traditional trade activities, and prevent disruptions in the supply chain of goods. Despite COVID-19, export turnover in Hanoi increased by an average of 7.67% from 2016-2020. In 2021-2022, export turnover expanded at an average rate of 6.16% per year.