The Vietnamese government has been urged by foreign retailers to loosen the economic needs test (ENT). Business associations from abroad have to pass the ENT in order to set up their second, as well as subsequent outlets. Vietnamese market is considered to be a gold mine for retailers from abroad. It has a population of 90 million with rapid economic growth and a youthful population which is looking to keep up with the latest trends.
The secretary general of the Korea Chamber of Business in Vietnam, Hong Sun said, “But foreign distribution companies have not been able to fully penetrate the market due to the ENT process – an effective tool the Vietnam government has used to control the development of foreign distribution networks in Vietnam”.
During the ENT process, the Ministry of Industry and Trade in 2013 issued a circular to loosen the conditions and enable an ENT exemption for those retailers from abroad which are setting up an outlet of 500 square meters or less in an approved area with entire infrastructure.
About 700 supermarkets and megamarket outlets, as well as more than 100 shopping malls in Vietnam account for just 25% of the distribution in the country, which means that there are plenty of opportunities left for foreign investors.
Photo Credits: Vietnam Net