THE RETAIL MARKET OF MEKONG DELTA KEY ECONOMIC REGION IN INTERNATIONAL INTEGRATION TREND

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1 THE RETAIL MARKET OF MEKONG DELTA KEY ECONOMIC REGION IN INTERNATIONAL INTEGRATION TREND Abstract DINH Tien Minh University of Economics Ho Chi Minh City PHAM Thi Truc Ly University of Economics Ho Chi Minh City LE Thi Hue Linh Student of Master Degree (UEH) The Mekong Delta (MD) is the region in South West of Vietnam, it is not just the fertile and important plain for Vietnam, but also is considered as one of the great plains of Southeast Asia and the world. MD is both a major manufacture zone and big food production region, is crucial for the country because there are many favorable conditions for the development of large-scale breeding, especially marine aquaculture in coastal areas, on the river, specialized areas in fruit trees with high quality. In 2009, Government established Mekong Delta Key Economic Region (MDKER) to promote the economic development of this zone faster. MDKER included four provinces, cities belong to the central: Can Tho city, An Giang, Kien Giang and Ca Mau provinces. According to data from General Statistics Office of Vietnam (2015), 47% of consumer goods in Vietnam was from retail channels and the role of distribution system was particularly important. The rapid growth of Vietnam retail market in the recent years has made Vietnam to become attractive destination for multinational retail corporations. Among retail markets in Vietnam, the retail market in MD including MDKER has structure ranging about 18%-20% of total retail sales of whole country and is the third retail market, behind Southeast area and Red River Delta. These indicate the appeal and huge potential for the development of the retail market. This study aims to assess the situation and offer solutions for the retail market of MDKER in international integration trend today. Key words: Mekong Delta, Mekong Delta Key Economic Region, Retail, Retail market, International, Integration. 1

2 1. INTRODUCTION ABOUT MEKONG DELTA KEY ECONOMIC REGION General introduction MDKER s geographical location is to the West and South, including Can Tho city, An Giang, Kien Giang and Ca Mau provinces, accounting for 41% of the natural area of the MD. To the North, it abuts Cambodia on total length of border of kilometers, the North-East it borders two provinces - Dong Thap and Vinh Long, the South-East it borders Hau Giang and Bac Lieu provinces, the East it is towards the Gulf of Thailand about 347 kilometers of the length of coastline and the South it borders East Sea with the length of 107 kilometers. MDKER s geographical location is very convenient for trade transaction by road, waterway and airway. Besides that, bordering with the Gulf of Thailand and the possession of a vast sea with more than 100 islands, including Phu Quoc and Kien Hai, has facilitated extremely for the development of marine economy such as transport, fishing and marine aquaculture, tourism, In addition, it is in next to Southern Key Economic Region 1 and is considered an important bridge in the economic integration with other regions of the country, countries in Southeast Asia as well as in the world. MDKER is mostly formed by alluvial deposits of Mekong River system. It has the important role for the ecological environment of the MD and Southern region. In the area, there are four national parks: Ca Mau cape, U Minh Thuong, U Minh Ha, Phu Quoc and two world biosphere reserves: Ca Mau cape and his coastal areas and the islands in Kien Giang, in there the nature reserves: Dam Doi (Ca Mau), Hong Chong Kien Luong (Kien Giang) have still maintained natural features and biodiversity with rare species. 1 Southern Key Economic Region is the name of the dynamic economic development zone in Southeast of Vietnam, including Ho Chi Minh City, Dong Nai, Binh Duong, Ba Ria Vung Tau, Binh Phuoc, Tay Ninh, Long An and Tien Giang (Long An and Tien Giang are in the MeKong Delta). 2

3 The land resources of the MDKER are quite diverse and abundant, suiting for variety of crops, from rice to food crops, industrial crops, fruit trees. This is one of the key advantage to form the production of goods as well as agricultural restructuring. Besides, the region has many large rivers flowing through, interlaced canals carrying water to everywhere. This has great significance for irrigation, aquaculture, development of transport and tourism. MDKER is also big energy center of the country with three electric centers: O Mon, Ca Mau, Kien Luong with the total capacity of about 9,000 to 9,400 MW and gas mines in the southwest coastal area has been focused investment. MDKER has population of 6,336.9 thousand people (General Statistics Office of Vietnam, 2013), accounting for 36.3% of the population of the MD and 7.06% of the national population. Population size differ between provinces and cities. An Giang and Kien Giang are the two provinces having the largest population, accounting for 59.6% of the population of the region. It has the population density of 495 people/km 2 (2013), more than 1.15 times compared to MD and 1.83 times of the average of the country. Can Tho city is the head of the population density in the region (868 people/km 2 ), followed by An Giang (609 people/km 2 ). The crowded population also puts pressure to the socioeconomic development and regional environment as well as the quality of life of people, and causes difficulties to the economic restructuring and the process of industrialization and modernization of the country. However, the rate of the urban population is increasing, in the period of , it increased from 23.5% up 33.8% because the region s urban network was also extended. MDKER has quite abundant labor force. According to data from 2012 and 2013, the population of working age account for about 57% of the total population of the region. Labor are working in the economic sectors have increased annually, the percentage of trained workers has increased rapidly. There are also the differentiation between provinces and cities in the region regarding labor structure by industry, associated with the level of economic development of each locality. Can Tho city has the highest labor rate in sectors: industry, construction, and service. Meanwhile, the rate of labor is very high in agriculture, forestry and fishery in Ca Mau and An Giang. 3

4 No. Provinces/ Cities Table 1: Area and Population of the MDKER Area (Km 2 ) Average Population (1000 people) 4 Population density (People/ km 2 ) I Whole country 330, , II MD 40, , III MDKER 16, , An Giang 3, , Kien Giang 6, , Can Tho 1, , Ca Mau 5, , Compared to MD 40.89% % 1.15 times Compared to whole country 5.01% 7.06 % 1.83 times Source: General Statistics Office of Vietnam (2013) Table 2: Percentage of labor force at 15 years of age and above compared to the total population of the MD No. Provinces/ Cities An Giang 59.4% 57.8% 2 Kien Giang 58.9% 55.7% 3 Can Tho 56.0% 55.5% 4 Ca Mau 56.6% 55.6% Potentialities of the MDKER Source: General Statistics Office of Vietnam (2012, 2013) Firstly, because of the especially geographical location of the MDKER, it has a lot of advantages for the socio-economic development and trade transaction with other regions and the world. Secondly, MDKER has good climate, fertile land and interlaced canals. Therefore, it has potentialities and strengths of the development of agricultural and marine products. Thus, this region contributes significant rate to making the MD topped the country in exporting rice, supplying foods for many areas in the country through the year. Besides, there are many specialties in this area, for example, pangasius in An Giang, shrimp in Ca Mau,

5 anchovy and traditional fish sauce in Phu Quoc,... Furthermore, this is also the zone having the immense and luxuriant orchards for all seasons, the local vegetables are available all over the country, and exported to many parts of the world in the form of fresh, dried, canned, frozen, etc. Cai Rang floating market makes people overwhelmed by all sorts of fruits. In Ninh Kieu, buyers have to squeeze in the fragant fruit stalls. Along the waterway from Can Tho city to the ends of the country, the more we go, the more we feel the richness of the Cape Land range. Thirdly, MDKER has some mineral resources, ecological parks, national nature reserves, mangroves, beatiful beaches catering the development of industry, tourism with regional and international stature (petroleum and gas in sedimentary basins: Cuu Long, Nam Con Son and Tho Chu Ma Lai; limestone in Kien Giang; Andezit stone and Granit stone in An Giang; the national forests: Ca Mau cape, U Minh Ha, U Minh Thuong,...; the nature reserves: Dam Doi, Hon Chong; Phu Quoc beach,...) Fourthly, this zone founded the urban systems developed dramatically with four cities and two towns, among them Can Tho city belongs to the central. Can Tho is the hub of commerce, import-export, healthcare, training, science, technology, especially in the field of research on rice, fruit trees, marine products,...of the MD and the country. In addition, the cities such as Long Xuyen, Rach Gia and Ca Mau are the economic centers in the southwest of the country are thriving on industries and services. Since the urban networks have been developed appreciably, the urbanization rate is high, it has been creating strong attraction for foreign investors and drawing labor force from rural areas, making a new prospect for economic growth and international trade. Finally, when approving the scheme to establish the MDKER in 2009, the state also recommended some solutions for mechanisms and policies to create favorable conditions for the development of the zone. Development Goals of the MDKER was identified: Building this area to become the dynamically developing region, with a modern economic structure, with a growing contribution to the economy of the country, taking part in building the thriving of the MB significantly, the culture and the society catch up with the average level of the whole country; ensuring the political stability and solid defense, with GDP growth rate in the period of reaches 1.5 times compared 5

6 to an average growth rate of the whole country. GDP per capita is about $3,000. The contribution rate of it to the national GDP of 13.3% in THE SITUATION FOR THE RETAIL MARKET OF THE MDKER IN INTERNATIONAL INTEGRATION TREND The types of retailing and the growth rate of the retail system in MDKER Traditional retail Markets and the traditional grocery stores are still favorite channels for the trade of the majority of Vietnamese people. In the MDKER today, the types of the traditional retails such as the traditional markets, stores, shops, stalls, remain quite popular. In 2011, it has 605 markets, by 2013 only 592 markets. Among them, An Giang has 194 markets, Kien Giang has 143 markets, Can Tho has 107 markets, Ca Mau has 85 markets. Amount of the traditional markets of the MDKER decreased dramatically compared to 2011 (down 76 markets, equivalent to 12.56%). Most of the erased markets are temporary markets, inefficient markets due to construction issues of infrastructure, the weakness and many shortcomings in management of each area. Although the traditional consumption habits has still dominated, it also exposes weaknesses. Meanwhile, the new consumption trends with a lot of utilities is expanding quickly, it has gradually changed consumer habits of a large part of urban residents. Table 3: Number of traditional markets in the MDKER No. Provinces/Cities I Whole country 8,550 8,547 8,546 8,568 II MD 1,782 1,739 1,726 1,708 III MDKER An Giang Kien Giang Can Tho Ca Mau Source: General Statistics Office of Vietnam (2011, 2012, 2013, 2014) 6

7 Modern retail The MDKER s the retail system is relatively strong. This system is located in most of the central positions of all provinces and cities in the region. For the supermarket type, in 2013 the MDKER has 23 supermarkets with the presence of the famous brands from abroad and domestic such as Co.opMart, MaxiMart, VinatexMart, CitiMart, Metro, BigC, Nguyen Kim,... accounting for 36.5% of number of supermarkets in the MDKER and 3.18% of number of supermarkets of whole country. The growth rate of this zone is much higher than whole country s rate. Specifically, in 2013, the whole country had 724 supermarkets, increased 86 supermarkets compared to 2011, equivalent to 13.4%. Meanwhile, from 2011 to 2013, the MDKER increased 6 supermarkets, equivalent to 35.29%. For the commercial center type, in 2011 the MDKER had just two commercial centers, increased by 2 in Specifically, these were located one in An Giang, one in Ca Mau and two in Can Tho. Most recently, Vincom Hung Vuong Can Tho has operated on July 26, Its goals are to meet high-grade needs of shopping, modern style of shopping, different and novel experiences of entertainment. Moreover, this is also a destination for cultural and artistic events in the Southwest. Also it s the appearance of specialized store type. This is the type of specialty store business in a certain industry sector, usually it has scale smaller than supermarket and located in the large residential areas. Currently, there are specialty food stores of Saigon Co.op, or the mobile phone stores, the electronics centers such as Nguyen Kim, Cho Lon Electronic Appliance, Mobile World, FPT Shop. This specialized store type almost covered widespread throughout centers of the MD provinces. Table 4: Number of supermarkets and commercial centers in the MDKER No. Provinces/Cities Supermarket Commercial center I Whole country II MD III MDKER An Giang

8 Kien Giang Can Tho Ca Mau Source: General Statistics Office of Vietnam (2011, 2012, 2013, 2014) The attraction of the MDKER retail market The macroeconomic policies of the state are increasingly creating more favorable conditions for the development of the retail market of the country in general as well as the MD and the MDKER in particular. After joining the WTO, Vietnam start making commitments to open markets for the foreign investors. Vietnam also has bilateral cooperation agreements with China of the development plan for the economic corridors and belts together with the ASEAN countries to build the plans expanding on Trans-Asia route, the East West Economic Corridors, This will rapidly change the domestic market and pose new requirements to the management of the investment process developed the network of wholesale and retail for all economic sectors at home and abroad. Total retail sales of goods and services of the MDKER, the MD and whole country has increased over the years. Specifically, total retail sales of goods and services of the MDKER was 155,043.9 billion VND in 2011, 174,715 billion VND in 2012 (increased by 12.7%) and 195,735.5 in 2013 (up 26.2% compared to 2011, accounting for 41.12% of total retail sales of goods and services of the MD and 7.33% of whole country). Vietnam Government and the administrations of provinces/cities have been actively investing in the construction and putting into operation of the significant infrastructure projects such as Vam Cong Bridge - the last big bridge in the MD, Trung Luong Can Tho expressway, Cai Cui port, expanding and upgrading 1A highway, dredging and clearing two important waterways those are Ho Chi Minh city Ca Mau and Ho Chi Minh city Kieng Giang. Thus, when the urban and transportation infrastructure systems are completed, many new urban zones are founded, residents concentrate densely, the purchasing power will boom due to rising demand, particularly the boom of the economy and retail trade in the MDKER including four key provinces Can Tho, An Giang, Kien Giang and Ca Mau. 8

9 In 2014, the MDKER has 23 supermarkets and 6 commercial centers. This figure is too small compared to a large market (16,589 km 2 ) with total population of 6.3 million people. In addition, its urban network thrives with the high urbanization rate (33.6% compared to 29.6% of whole country). This has created strong attraction for foreign investors to the retail market of this zone. Table 5: Total retail sales of goods and services of the MDKER 9 Unit: Billion VND No. Provinces/Cities I Whole country 2,079, ,369, ,668, ,951,498.3 II MD 363, , , ,392.0 III MDKER 155, , , , An Giang 46, , , , Kien Giang 38, , , , Can Tho 39, , , , Ca Mau 30, , , ,927.4 Compared to the MD Compared to whole country 43% 42% 41% 42% 7% 7% 7% 7,7% Source: General Statistics Office of Vietnam (2011, 2012, 2013, 2014) 3. THE INTERNATIONAL INTEGRATION TREND OF THE MDKER - OPPORTUNITIES AND THREATENS The international integration trend of the MDKER In the period of industrialization and modernization, the MD and the MDKER has been deeply joined into the process of international economic integration of Vietnam. Based on the advantage of external conditions through the process of international economic integration, the area also promotes the inherent advantages, accelerates economic growth rate, and deserves the largest agricultural production center in the country. However, considering the inherent potentialities, its achievements in the process of international economic integration and socio-economic development in recent years is only the first step, there are still a lot of limitations. The process of international integration of the MD has yet to promote its fully potential.

10 Therefore, in order to participate effectively in the process of international economic integration of Vietnam, the MDKER needs to focus on improving quality and training of human resources, as well as changing the mindset, administrative behavior to adapt to the foreign economic activities. Currently, in addition to the traditional advantages, the international investors are interested in other attractive capacities such as the advantages in transportation costs, trade opportunities, and high quality workforce. Accordingly, in next time it is necessary to build the development strategies suited to new trend and improve information system and organization. Besides that, in order to assert its position on the international market the local managers should collaborate to develop and promulgate mechanisms and policies with the better linkage, especially for the product value chain having the competitive advantages within the region. In the future, the MDKER should take advantage of good conditions for international economic integration and accelerate economic restructuring, the innovations of technology and management. Furthermore, it also need to promote of comparative advantage, enhance the competitiveness of the economy, increase the proportion of exports of the high value processing products with specific characteristics, and actively proceed to stop exporting of natural resources and unprocessed agricultural products. Accordingly, the deciding factor in the global game is the competitiveness at three levels: nation, corporation and product. The playing field for global trade of the process of international economic integration is opening up many opportunities, but also many challenges for the big key area of agricultural production for the region and the world. The opportunities and challenges of the retail industry in international integration trend Opportunities According to Mr. Phillipe Bacac, CEO of Metro Cash & Carry Vietnam, the proportion of the modern trade channel in Viet Nam is only about 30% of the retail sector, while this figure in some European countries such as France, Germany is over 70%. That creates more motivation for modern commercial development in Vietnam. Moreover, studies show that the growth rate of Vietnam's retail market is quite high and although it isn't ranked in the top 30 most attractive markets in the world, but still a lot of potential. Currently, the income of residents is increasing, leading to the development of the fields 10

11 of dining, entertainment, restaurants, hotels, services... All of these factors indicate the prospect of retail market in Vietnam. Besides, in the integration trend, the participation of foreign retailers also helps domestic businesses with the opportunities to interact, compete and learn the management experience, effective business models from competitors so that they improve and enhance their service quality. The development of the traditional and modern retail networks meet to the increasing both size and level of the people s shopping needs with the different income in different areas in the country. The trend of the replacement for traditional retail forms by modern retail forms is strongly taking place in large urban areas. This trend will soon happen in the provinces/cities under the MDKER because the presence of foreign retailers in Vietnam will contribute to improving the commercial civilization, urban civilization..., improving the intelligentsia and change people's consumption habits in here. They have the growing demand for the products of fashion, technology, furniture equipment and appliances. Consumer habits are changing quickly, this will open up many opportunities for investors. Consumer habits of Vietnamese people is gradually familiar with the modern retail stores, where can meet the changing demand with more variety of goods and services. Accordingly, the traditional demand for fresh products will be replaced with processed products to meet the requirements of the majority of workforce today. This will lead to more consumers weekly shopping instead of going the traditional markets. Challenges The challenges of product brand The MDKER is a rich fruit granary with famous specialities at home and aboard such as Hoa Loc mango (Tien Giang), Nam Roi grapefruit (Ben Tre), green grapefruit (Ben Tre), Lai Vung pink mandarin (Dong Thap), rambutan (Tra Vinh, Ben Tre), Cho Lach mangosteen (Ben Tre), Ha Chau strawberry (Phong Dien, Can Tho)... However, agricultural brand of Vietnam in general and in particular the Mekong Delta has hardly good positioning in the international markets though it has a lot of advantages for the development of agricultural products and fruit. Moreover, to build its brand, its products 11

12 have to meet the high criteria such as VietGAP, GlobalGAP, but the lack of funding for the recertification of products adapting with the above criteria is a difficult problem. Actually, according to Department of Crop Production (Ministry of Agriculture and Rural Development), the current area of fruit trees in the southern provinces reached the VietGAP certification is not much, the MD only has less than 1% of total area 300,000 hectares, while vegetables, seafood, rice is negligible. This can be a big challenge for the domestic manufacturers and businesses. They could be defeated in most agricultural products at the largest agricultural producers in Vietnam (Mekong Delta) if the investment wave from Thailand, Indonesia, Phillipines, strongly penetrated into the agricultural product market in Vietnam in general or the zone in particular. The challenges of scale, business skills, technical barriers for the domestic investors Retail network in our country still has some limitations as: Retail network in our country still has some limitations as: it is mainly small and micro establishments; the key retail forces making direct sale for consumer are still small business households with low business skills and qualifications; the distribution mainly is in the traffic route affecting to the order and traffic safety; retail network is still sparse in the remote areas. Retail competition will certainly more drastic when Vietnam increasingly integrates into the world. This is a big opportunity for foreign retailers want enter the market with more than 90 million people in Vietnam. Meanwhile, the domestic corporations have weak financial resources, the lack of the management experience, so they should face to many difficulties in the fierce competition. In addition, the criteria for food safety and hygiene, the environment clean of manufacturing and business is often a major barrier for domestic investors. In terms of objectivity and subjectivity, they have still feared and lacked of investment, while consumer's perception tend to attach special importance to these criteria more strictly. The challenges of investment quotas, consumer habits for the foreign investors The growth capacity in the region's consumption has made its retail market to become a target for many foreign investors. In spite of allowing 100% FDI in the retail sector under the liberalization policies of the WTO since 2009, Vietnam still requires a license for 12

13 opening the new brand of the Economic Needs Test (ENT), which will evaluate the suitability of the businesses and the impacts on current business situation. This will be a challenge for foreign investors, but it is an opportunity for domestic investors to have more time to improve their competitive advantages and business management qualifications in the form of globalization and timely appropriate to the market demand. Facing to the good understanding of the domestic investors about the local needs and taste, the foreign investors also need to study for consumer habits in detail before making any investment decision. For consumer habits, a quite important factor is Vietnamese people have habits of loyalty to the brand and enjoy promotion. Particularly for people in this area, the traditional shopping habits to meet freshness for daily meals are still considered important and difficult to change more than other key economic regions in the country. Thus, the retail market of processing foods need to be careful when investing. The challenge of infrastructure development Due to the topography of rivers and canals, the development of transport infrastructure in order to meet the circulation of goods become more costly, harder to synchronize. Currently, the project of development of the two international airports -Can Tho and Phu Quoc, was settled, but the roads to here have not been synchronized well. Furthermore, because the capital of the infrastructure investment for the region still depends on ODA, the activeness isn't high. 4. THE SOLUTIONS FOR THE RETAIL MARKET DEVELOPMENT OF THE MDKER IN THE INTEGRATION TREND Organizing the commercial system of the MDKER In view of economic development more components, the economic components in commercial business activities under the law are important parts constituting the socialistoriented market economy. In view of economic development more components, the economic components in commercial business activities under the law are important parts constituting the socialist-oriented market economy. These components coexist and develop in long-term, collaborate with together and fairly compete. Therefore, the maximum mobilization of the capital potential and technology from firms in all economic 13

14 components will create the trading network in the MDKER and organize modern channels in distribution of goods. For state trading enterprises For the profitable business units, the region should invest more capital in order to expand the commodity distribution network to the remote areas through distribution channels such as agents, stores in the center of townships, towns; retail stores in communes, districts,...these wholesalers and retailers also have a responsibility to purchase or exchange the products manufactured by farmer and the business units in this region, and after that, they will sell them at the other areas or export. Cooperative Trade and Service As Cooperative Trade and Service can do business with only one product or many kinds of product, only buying or selling, or both trading and service. Thus, Cooperative Commerce - Service positively has to be helped with finance and management capacity, especially in areas where the exchange of goods and market are developed weak and having many handicrafts such as the primary processing of seafood and fruit. - The localities focus on strengthening and maintaining the existing cooperatives. - The local policies should be incentives for cooperatives, such as credits, land or tax break, reducing fees,...and pay attention to the instruction on the tight linkage between cooperatives and state-owned commercial components. - Department of Industry and Trade (DIT) of the provinces strongly connect to Ho Chi Minh city Department of Industry and Trade to exchange the trade experience and accelerate the speed of goods circulation. - The provinces and DIT need to have policies encouraged to establish cooperatives, commercial groups so that increasing the consumption capacity of the goods for famers and serve the demands of people better. For private businesses In the distribution system, traders hold positions very significant important because they are an important bridge between production and consumption; bridge of expanding markets of domestic goods and reaching out to foreign markets. Thus, the localities should have policies encouraging and supporting the private enterprises to do business lawfully. 14

15 They should create corridors and the fair business environment to maximize skills and experience in commercial operations of this component. Specific solutions: - Leasing land for the establishment of offices, factories, warehouses with the incentives of policies and price. - Simplifying the procedures for loans, the loans with the preferences of the interest rate and the account terms. - Supporting the private enterprises through tax policies, provision and training of qualified manpower in the trade. - Providing and consulting information about markets, laws in business. - Advocating the traders participating the economic forms of cooperation in the spirit of voluntary and the mutual support. - Stimulating the traders to invest the construction of stable business network with facilities can meet the growing trade requirements in quantity and quality. Developing the infrastructure and connectivity of inter-regional To develop the retail market, it is important to quickly complete infrastructure system. In the last time, the government has increased investment to the MD with a series of the national works such as Can Tho international airport, My Thuan bridge, Can Tho bridge, Rach Mieu bridge, Vam Cong bridge, upgraded 1A Highway, Ho Chi Minh City - Trung Luong expressway, and a lot of highways are upgraded, restored creating new appearance and the new development opportunities for the MD. However, it found that the system of the local waterway traffic and rural roads are extremely poor in the MD, and it is a significant impediment to trade and development. It need to focus on building infrastructure to serve people in remote areas, especially in the construction and completion of rural roads in remote areas, as soon as possible; form the vertical axis lines linking the MD to Ho Chi Minh City, the South East; upgrade all the national highways, provincial highways; expand, upgrade and restore the systems of the seaports and river ports, especially in operating and exploiting effectively for Can Tho international airport, Rach Soi airport, Ca Mau airport.to provide a basis for the regional linkages. Developing the communication networks in order to hepl people easily access 15

16 to market information; the restoration of the railway line Saigon - My Tho is still an effective solution to the inter-regional trade. The local and inter-regional linkages to the MD needs to be strengthened and performed actually. It must have a strategy towards sustainable development for the MD and its partners as well as each of the provinces in the region. To create this connection, the construction of inter-regional mechanism with uniformity is essential, enabling the codevelopment of the areas. This is also the basis for the expansion of international cooperation of an entity composed of many members with the diverse spirit of unity in terms of regulation. In this solution group, the banking system has an important role, with reasonable regulations facilitating support for the development of the MD. Building the modern distribution systems Currently in the MD has the professional modern distributors for the regional markets such as Coop-Mart, in particular Metro Cash & Carry Group has invested aggressively to become a professional trader, introducing the agricultural products of the MD to abroad. Since Can Tho become the city belonging to the central, the supermarket businesses has developed retail centers and succeeded in this market in short time. Nowadays, in the international economic integration trend, the localities of the MDKER have to cooperate together to choose the manufacturers with relative stature in the region, link to the leading trade groups having enough capital and experience in setting up modern distribution channels like Saigon Coop-Mart and SATRA to enhance competitiveness versus foreign corporations, entering into Vietnam with the huge resources of capital, management, experience and market, brand, and having the government incentives stipulated by the Law on Foreign Investment. Therefore, they have the huge competition advantages. Thus, the state trading enterprises must take the lead in setting a modern distribution system. It's is specific that the local DITs have to work together to establish one or a few large distribution groups of the region. 16

17 In addition to the efforts of locality, the State should also create the powerful leverage to mechanisms and policies to support the enterprises in building and developing into large distribution groups. In parallel with this program, there are the positive activities in order to consolidate, rearrange the systems of markets, supermarkets, trade centers and wholesale-retail stores; at the same time, pay attention to building and upgrading warehouses, border gate economic zones to speed up the circulation of goods, help farmers in the consumption of agricultural products and increase purchasing power. Promoting the policies are used for controlling the processing establishments and the outsourcing producers. Promoting the policies are used for controlling the processing establishments, outsourcing, quality of goods closely and more strictly: The market management departments at the local should regularly send executives to control and strictly deal with violations of the product quality law, organize more inspections to prevent bribery, harassment from the market management agencies at the local. Continue to improve the distribution system, upgrade and develop retail networks of goods; actively bring Vietnamese goods to rural areas, ethnic minority areas, islands, in the industrial park, expand the sale with price stability. These help the campaign Vietnamese people prioritize using Vietnamese goods to reach the authentic effectiveness. Monitoring the changes in supply and demand of goods, price, and markets; maintaining the large balances, particularly for raw materials, essential consumer goods; enhancing the market management. When building the leading trade groups in the MDKER, the localities need to interest the following: - Training human resources with the professional sales skills: organizing sales seminars, training of the profession and the communication skills, enhancing the quality of customer service. The local DIT should also cooperate with domestic and foreign Department for professional training on purchase / sale of goods to employees. 17

18 - Developing and expanding the retail chains, supermarket chains in the forms of franchising, cooperating with foreign retailers to learn experience, branding, business strategy planning, marketing adapting with the local consumer habits. - Promoting non-cash payments. It's necessary to coordinate with banks enabling all people also have a credit card, setting preferential policies for paying by credit card. Some suggestions for Vietnamese consumers so that they contribute to the development of the country's retail market. - Vietnamese people should prioritize using Vietnamese products, reduce westernized psychology (tâm lý sính ngoại), each person contributes a small wind to form a big wave; advocate yourself and family, friends, neighbor using Vietnamese goods and creating Vietnamese goods with high quality. - Search and make people understand Don't because of the immediate benefits that impairing the long term - Giving opinions to community, officers and staffs to change lopsided look You are Vietnamese, but suspecting Vietnamese goods - Researching the marketing strategies to apply and propagate Vietnamese products for Vietnamese people, because Vietnamese people are very crowded and be willing to spend if the commodities are attractive enough. - Willing to report violations of the sellers if you see the unhygienic goods, counterfeit products, give the authorities a hand to control more closely the production and business, only allowing for the good quality products to appear in the market 5. CONCLUSION The MDKER is a potential region for the economic development. Despite the newly formed region in 2009, the economic growth is relatively high. The formation of MDKER creates a basis for the economic development of the MD in particular and the country in general. This zone having the certain contributions to the socio-economic development of the country. The infrastructure systems are being invested and improved, contributing to create jobs for the region's labor, attracting the domestic and foreign investment capitals. It also creates the exciting trade activities between the provinces in the zone as well as with other countries in the region and the world. 18

19 In the international integration trend, the retail market of the zone becomes increasingly bustling with the extremely fierce competition between domestic enterprises and foreign corporations. In order to survive and develop, the domestic enterprises should seize the opportunities, continuously attempt to further improve its business. Besides the efforts of the business, it also needs the supports from the state and the local agencies. The close cooperation between businesses and the state will help the socioeconomic environment to grow dramatically, increasingly enhance the people's life. Bao Viet JSC: REFERENCES Can Tho Online news: Department of Crop Production (Ministry of Agriculture and Rural Development): Doanh Nhan Online magazine: Financial magazine: General Statistics Office of Vietnam: Kien Giang province Portal: Ministry of Planning and Investment Portal: Mekong Delta Economic Cooperation forum: Nguyen Thanh Bien, The Mekong Delta Key Economic Region Discover the potential of the trading development. accessing date February 22 th, Nguyen Thi Tram Anh & Luong Thien Khang Uyen, The retail system of Kien Giang province and the development solutions. Journal of Social Sciences & Humanities, No. 7, Vietnamnet news: Vietnam Logistics Portal: Vietnam Trade Promotion Agency: Vu Van Ninh, The significance in the development of the Mekong Delta. Cuu-Long/20158/22381.vgp, accessing date February 22 th,