The emerging food retail structure of Vietnam: Phases of expansion in a post‐socialist environment

The purpose of this paper is to trace the modernisation of the retail structure of Vietnam from a closed market to one that is increasingly open to retail transnational corporation (TNC) entry and associated Western retail formats.

The authors undertake this study of retail change through the analysis of a wide range of governmental and industry secondary data – much of which has not entered western academic debate given the challenges of access and translation. In doing so, this period of adaptation is related to well‐known studies concerning the diffusion of western forms of retailing discussed across the social sciences.

As a country encountering the third wave of supermarket proliferation within emerging markets, Vietnam's experience is found to broadly fit the models of retail foreign direct investment (FDI) entry and retail “modernisation” suggested by Natawidjaja et al. and Dries et al. The retail change process was affected by a slow, progressive creep of market liberalisation where, as late as 2009, a foreign partner could hold only up to 49 per cent of capital in a joint venture. While analysis of the evidence suggests some retailers flouted these laws or employed creative approaches to mitigating their effects, such regulations clearly underpinned a less intense initial influx of retail FDI than had been experienced elsewhere in Asia and maintained a high domestic ownership level in the retail market. Retail modernisation has intensified in recent years, with greater international entry, expansion and retail format proliferation diffusing from cities to more rural locations, though the top five grocery operators still account for less than 4 per cent of the grocery market.

Studies within retail management of retail internationalisation have tended to focus on fully liberalised countries that have attracted high rates of retail capital. In contrast, this paper focuses on understanding the emergence of one of the countries somewhat later to these trends.