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1 INTRODUCTION Rationale of the Study Currently, rural areas account for a large proportion of Vietnam, causing major impact on both economy and environment Meanwhile, the majority of Vietnamese enterprises have limited potential or not pay properly attention to investing in the retail system of staple goods in rural area in Red River Delta Although there are certain restrictions on the retail system, in general, retailing in rural areas is still developing quite vibrantly, indicating the potential for development is not inferior to urban areas Therefore, some Vietnamese retail businesses began to find growth motivation from the retail system of staple goods in rural areas of the Red River Delta The changeable business environment also significantly affected the retail system of staple goods of our enterprises in the rural area in Red River Delta This change in environment brings great opportunities and challenges for Vietnamese enterprises to expand to rural areas Besides that, academically, in recent years, although there have been many domestic and foreign projects such as books, scientific researches, doctoral dissertations, scientific papers on theoretical research about retail development trend, strategy, retail growth model, retail establishment classification, retail location planning, synthetic retail policies, and practical researches on the retail market in the rural areas of Red River Delta region However, there is no work that fully synthesizes the definition of staple goods and clarifies the theory of the retail system of enterprises associated with specific characteristics of the rural area, as well as no practical research on the retail system on staple goods in the Red River Delta at the perspective of micro enterprise Therefore, the dissertation "Studying the retail system of staple goods of Vietnamese enterprises in the rural areas of the Red River Delta region" is essential and suitable to the current research context It has succession but does not overlap with previous published studies The objectives and questions of research a) Research objectives The general objectives of the study are to clarify the theoretical basis of the retail system of staple goods of enterprises in association with specific rural areas and to propose some solutions to improve the retail system of staple goods of Vietnamese enterprises in rural areas of Red River Delta region The specific objectives - Systematizing and clarifying the theoretical basis, research content on the retail system of staple goods of enterprises in the rural areas - Assessing the status of the retail system of staple goods of Vietnamese enterprises in the rural areas of the Red River Delta region - Proposing solutions to complete the retail system of staple goods of Vietnamese enterprises in the rural areas of the Red River Delta region in the current period 2 b) Research questions - What is the content of research on the staple goods retail system of enterprises in rural areas? - What is the situation of the staple goods retail system in rural areas of the Red River Delta of Vietnamese enterprises? - What are the successes and limitations of the stable goods retail system in rural areas of the Red River Delta of Vietnamese enterprises? - What are the solutions to complete the staple goods retail system in rural areas of the Red River Delta of Vietnamese enterprises? - What are the recommendations for the State agencies to support Vietnamese enterprises to complete the staple goods retail system in rural areas of the Red River Delta? Topic and scope of the study a) Topic of the study The topic of the study is the theoretical and practical issues about the retail system of stable goods of Vietnamese enterprises in rural areas b) Scope of research Content coverage The thesis studies the retail system of staple goods, which focuses on researching the retail system of staple goods of enterprises in the rural areas including the following contents: analyzing the circumstance of the retail system of staple goods of enterprises in the rural areas, planning the retail system, designing synthetic retail policies (goods, store design and goods representation) The study does not delve into the contents related to the warehouse and logistics system of staple goods retail businesses The staple goods researched in the study is goods to serve the necessary needs for daily life of people, not for production and other fields Geographical coverage The study focuses on researching the retail system of staple goods of Vietnamese enterprises (enterprises established or registered under Vietnamese law, headquartered in Vietnam and owned by Vietnamese people with 50% of the authorized capital) in the rural areas of Red River Delta region Studies on retail systems of Vietnamese enterprises in urban areas or outside Red River Delta or foreign-invested enterprises (accounting for over 50% of the authorized capital) are used as lessons Lessons learned from some countries such as India, China and southern Vietnam Time coverage Practical studies were mainly conducted during 2013-2018 and proposed solutions to 2025 With the topic and scope of the research identified above, the research model of the thesis is established as shown in Figure 0.1: Evaluating the current status of the retail system of staple goods of Vietnamese enterprises in the Viewpoint to improve the retail system of staple goo Surveys Evaluating the success and limitations of the retail system of staple goods of Vietnamese enterprises i Rural customers Demand and solvency Objectives to complete the retail system of staple goods Behavioral characteristics Staple goods shopping habits Evaluation of different types of staple goods retail facilities The environment of retail system of staple goods in the rural areas of the Red River Delta region Determining the limited causes of the retail system of staple goods of Vietnamese enterprises in Staple goods Retailers Solution to complete the retail system of staple goo Forecasting the environment and market for the retail businesses of staple goods in the Analyze the statistics of the retail system of staple goods Identify goals with the retail system of staple goods Plan the retail system of staple goods Design of synthetic retail policies Evaluate the retail system of staple goods Determining opportunities and challenges of Vietnamese retail Proposing to Surveys and interviews Figure 0.1: Dissertation Framework Source: Illustration of author 4 Research methodology The study stages are presented in Figure 0.2 Collect and analyse secondary data Collect and analyse primary da - Determine sources of data - Survey a group of 07 experts - Verify and collect data - Survey 115 retailers - In-depth interview a gr - Process and analyse -data Survey (Case 372 study) staple buyers in rural area of Red River delt Researh report Figure 0.2: Stages of collecting and processing data Source: Illustration of author Scientific and practical significance of the research (1) In theoretical perspective, the dissertation contributes clarification to the theoretical framework of staples retail system of enterprises in association with rural areas and systematize criteria for evaluating retail system including proposing new criteria regarding society, personality and business image (2) In practical perspective, the dissertation analyzed and evaluated objectively and reliably the status of staples retail system of Vietnamese enterprises in rural area of Red River Delta This contributes to the overview of the current status such enterprises in the current context from a micro-approach point of view (3) In terms of applicability, the dissertation proposes 06 orientational and applicable solutions for enterprises including: Perfecting staples retail system associated with long-term retail strategy for enterprises in rural area of Red River Delta; Completing the structure of staples retail system for enterprises in rural areas of Red River Delta; Improving location system planning technology for Vietnamese staples retail enterprises in Red River Delta; Building a brand of Vietnamese retail businesses, designing suitable product assortment for Vietnamese economy; Improving management capacity and qualification for labor force; Enhancing the application of science and technology in completing staples retail system of Vietnamese enterprises Simultaneously, the dissertation proposes to relevant central and local state management agencies to improve the retail environment to help Vietnamese enterprises with favorable conditions to complete the staples retail system in rural area of Red River Delta until 2025 5 Structure of the dissertation In addition to the introduction, conclusion, the dissertation has been structured with chapters, including: Chapter 1: Literature review and research gaps Chapter 2: The rationale of the staples retail system in rural areas of enterprises Chapter 3: Current situation of staples retail system of Vietnamese enterprises in rural areas of the Red River Delta Chapter 4: Solutions for completing the staples retail system of Vietnamese enterprises in rural areas of the Red River Delta until 2025 CHAPTER 1: LITERATURE REVIEW AND RESEARCH GAPS 1.1 Literature review According to the research perspective and ability to approach materials, this thesis has assembled notable research projects related to staple goods retail system in rural areas of enterprises 1.1.1 Literature review on retail systems Research on context, retail development trends, rationale related to retail, retail system have typical contributions of authors: John Fernie and authors (2003), Philip Kotler (2007), Nguyen Bach Khoa and authors (2011), Michael Levy and authors (2014), Nguyen Thi Hue (2014), Ta Loi (2016) In particular, the domestic research projects are associated with the characteristics of our country such as the classification of retail facilities by author Nguyen Bach Khoa, author Nguyen Thi Hue, the impact of implementing new generation FTAs on our retail system of author Ta Loi Research on retail growth strategy and retail model has typical contributions of authors: Malcolm Sullivan and Dennis Adcock (2011), Surajit Dey and authors (2012), Barry Berman and authors (2017) Research on key elements in retail marketing, retail system management, which include research on retail systems (mixed retail locations, policies …) have typical contribution of authors: Graham Clarke (1998), Philip Kotler (2007), Le Quan and Hoang Van Hai (2010), Malcolm Sullivan and Dennis Adcock (2011), Nguyen Bach Khoa and authors (2011), Pham Huy Giang (2011), Truong Dinh Chien (2012), Michael Levy and authors (2014), Barry Berman and authors (2017) In particular, Graham Clarke deserved credit for generalizing the methods of retail location planning that have been developed by businesses in retail countries over the times 1.1.2 Literature review on retail systems in rural areas Research on rural consumers in different countries, rural markets in Vietnam have typical contributions of authors: Sanal Kumar Velayudhan (2007), Jiyoung Kim and Leslie Stoel (2010), Surajit Dey and collaborators (2012), Chintan Shah (2013), Massoud Moslehpour and Van Kien Pham (2013), Pham Hong Tu (2013), Nielsen (2014), Claire Seaman (2015), Dang Huyen Trang (2016) In particular, Surajit Dey has proposed to advance organized retail model in rurral Indian market 1.1.3 Literature review on staples retail systems in rural areas of Red River Delta of Vietnamese enterprises Research on retailing staple goods has contributions of authors: Nguyen Thi Bich Loan (2013), Trinh Thi Thanh Thuy (2015) The two authors both approached the research according to the supply chain of staples on the domestic market and selected a typical study of the supply chain of some typical staple goods 7 There are also a number of research projects on retail in rural areas of Red River Delta of donmestic authors such as Pham Huy Giang (2011), Pham Hong Tu (2013) 1.2 Research gaps From the overview of research on typical projects related to the research content of the topic, researchers now point out the research gap: In theoretical terms, although previous theories were applied to retail in both rural and urban areas, they did not clarify the specific characteristics in theory of retail systems in rural areas of enterprises Besides, the definition and identification of staple goods in some previous research projects have not been concluded and associated with the specific needs of rural consumers Criterias for evaluating retail systems mainly focus on financial criteria In practical terms, research primarily approach at macro perspective, manage the government for rural retail market or stop at studying the rural consumers behaviour nationwide or a province, there has not been any practical research on retail systems of staple goods in rural areas of Red River Delta in terms of enterprises From the research gaps discoverd above, the thesis aim to clarify the definition of staple goods, delineate the content of researching on staple goods according to the micro-approach perspective of enterprises Propose to add some evaluation criteria to fully systematize groups of criteria for assessing HTDTY retail system of enterprises Based on the systematized and clarified arguments, conducting a survey of the status of staples retail system of Vietnamese enterprises in the Red River Delta On that basis, this thesis points out the limitations of the retail system to propose some solutions and recommendations to help Vietnamese enterprises complete their staples retail system in the Red River Delta Therefore, the dissertation is new, not duplicated and inherits the works of previous research 8 CHAPTER 2: THEORETICAL BASIS OF STAPLE GOODS RETAIL SYSTEMS IN RURAL AREAS OF ENTERPRISES 2.1 Overview of staple goods retail systems in rural areas of enterprises 2.1.1 Basic definitions 2.1.1.1 Staple goods In Vietnam, undergone the development process, the definition of staple goods is mentioned in a great deal of legal documents with numbers and types change over the period, associated with the local custom and tradition Although the approach and classification of staple goods of Vietnam and international countries have certain differences, but both agree in the aspect that they are to meet the basic and essential needs of the majority of the population From that point of view, the definition can be synthesized: “Staple goods are essential and indispensable goods for daily life to meet basic human consumption needs” 2.1.1.2 Retailing staple goods Retailing staple goods is a business activity that involves selling essential goods for daily life to meet the basic, direct needs of the end consumer for their personal use, not for business 2.1.1.3 Staple goods retail system of enterprises Staple goods retail system of an enterprise is an organized collection of stores of that enterprise, having an interactive, binding relationship with each other and working together to retail goods which are essential for daily life, meet basic and direct needs to customers and eventually letting them use for personal, non-business purposes 2.1.1.4 Research on staples retail system in rural areas of enterprises The rural area is an administrative boundary area not covering the area of a ward or a district in a town or city and is managed by the basic administrative level, the People's Committee of a commune or town or township Studying on staple goods retail system in rural areas of enterprises is understood as all business activities including: situation analysis, target determination, planning system of points of sale and design of mixed retail policies in order to perfect the staple goods retail system of businesses in communes, towns and townships 2.1.2 Basic characteristics of staple goods retail system in rural areas of enterprises - Regarding the structure of staple goods retail system of enterprises in Vietnam: Retail facilities belonging to staple goods retail system of enterprises in rural areas are mainly in the form of agents of manufacturers, distributors or convenience stores and mini supermarkets - Regarding the distribution of points of sale of staple goods retail system of enterprises in rural areas: The density is still low, not covering the market, not creating a retail brand for consumers, mainly concentrated in the area town area - Regarding the structure of goods in staple goods retail system of enterprises in Vietnam: Focus on exploiting to meet the great demands of rural consumers, including processed food, personal care and family goods, stationery products 9 - Regarding the provision of additional services and services in staple goods retail system of enterprises in rural areas: modern stores have not had many opportunities to penetrate into the rural market - Regarding the method of promotion in the retail system of staple goods and branding of enterprises: the form of promotion is mainly - About staff in staple goods retail system of enterprises: limited quantity and quality 2.1.3 The role of staple goods retail system in rural areas of enterprises 2.1.3.1 The role for consumers and the community - Changing consumer habits, bringing local people the opportunity to experience civilized shopping environment, modern and comfortable retailing methods - Contributing to economic growth and the local development - Creating jobs for local workers - Improve the quality of life of people 2.1.3.2 The role for businesses - Connecting production and consumption in rural areas - Connecting information from consumers to manufacturers and vice versa - Helping retail businesses dominate the rural market 2.1.4 Popular types of retail in the staple goods retail system in rural areas of enterprises 2.1.4.1 Types of staple goods retail system according to sales method a) Types of traditional stores include: Traditional wet market; Traditional grocery store b) Types of modern stores: Trade center; supermarket; mini supermarket; convenience store; specialty store 2.1.4.2 Types of staple goods retail types according to ownership form Classification of form of staple goods retail patterns by ownership class includes some basic types as follows: Independent unitary establishment; Retail chain stores; Retail cooperative sales base; Retail facilities belonging to manufacturers; Franchising retail facility 2.2 Contents of research on staples retail system in rural areas of enterprises 2.2.1 Situation analysis of staple goods retail system in rural areas of enterprises 2.2.1.1 External factors External factors include: Market factors; Competitive factors; Factors related to the fluctuation of environment 2.2.1.2 Internal factors Internal factors include: financial resources; locations and retail spaces in rural areas; human resources; relationship with suppliers; supply chain management system; collecting and processing market information system, customers 2.2.2 Identify the targets for staple goods retail systems in rural areas of enterprises a) Financial target Financial target is the most important target, including quantitative, measurable indicators Indicators are divided into two levels: Company/retail sytem 10 level and store level/sales methods Financial goals are also divided into groups: Input target; Output target; Productivity targets b) Meeting customers’ needs target Staple retail enterprises are not only aiming to sell lots of goods, collect lots of money from customers, but more importantly to meet customers’ needs, bring value and satisfy customers with the whole shopping experience c) Other targets In addition to the target mentioned above, staple retail enterprises in rural area can also set other personal and social goals, positioning business images 2.2.3 Planning location for staples retail in rural areas of enterprises 2.2.3.1 Determine the area in the staples retail planning system of enterprises a) Identifying areas in staples retail system planning in association with retail strategy of enterprises - Buying behavior of customers on the targeted rural market of the enterprise - Targeted rural markets’ density - Uniqueness of retail services b) Identifying retail areas with consideration of law and social factors When selecting areas, locations to set up staples selling points in rural area, enterprises also need to consider issues such as the development of new rural areas close to the urban areas, the hypermarkets development against trend, retail planning system for the area of the local state agencies, construction standards, administrative procedures 2.2.3.2 Identifying retail locations in the staple retail planning systems in rural areas of enterprises a) Evaluate locations to determine the location and number of retail points in one rural area Factors used to consider include: (1) Economic conditions, (2) competition level, (3) strategy of the population in the area and target market relevance level, (4) operating cost When analyzing and selecting areas, retail enterprises also need to decide the number of selling points in each rural area b) Factors to consider when evaluating a specific staples retail location There are factor groups: characteristics of retail locations; characteristics of the trade area; the store's expected sales 2.2.4 Design mixed retail policies in rural areas of enterprises The approach of designing retail policies (goods management, store design) with the specific characteristics of rural area are generalized in the 4As approach: Affordability, Availability, Acceptability, Awareness (Chintan Shah, 2013) 2.2.4.1 Merchandise management policy for rural areas a) Merchandise management system in retail enterprises In general, retailers have the same basic structure in classifying and purchasing staple goods: merchandise group, department, classification, SKU b) Product assortment and merchandise planning Product assortment of a staple retail enterprise manifests through parameters of breadth, depth, length and consistency of the assortment (Nguyen 11 Bach Khoa and Cao Tuan Khanh, 2011) Merchandise planning includes two processes: product assortment planning and merchandise value planning (Dang Van My, 2017) c) Pricing for retailing staple goods Rural consumers not only concern about low prices, but also willing to consider higher prices if the product brings practical benefits 2.2.4.2 Staple goods store design in rural areas a) Objectives of store design The main objectives of store design are to (1) implement corporate strategy, (2) build loyalty by providing satisfactory shopping experiences for rural customers, (3) increase sales per purchase, (4) control the cost, and (5) meet legal requirements b) Elements of store design There are three main factors needed to be considered in designing retail store for staple goods, those are : (1) Site layout, (2) Table, signboard and image system, (3) Special area 2.3 Criteria for evaluating staple retail systems in rural areas of enterprises The evaluation criteria can be divided in to groups, including: financial criteria; criteria for assessing customer satisfaction; other evaluation criteria 2.4 Domestic and international experience on staple goods retail system in rural areas and lessons for Vietnamese enterprises 2.4.1 Experience of Bach Hoa Xanh mini-supermarket chain of Mobile World Joint Stock Company (in the South of Vietnam) Bach Hoa Xanh mini-supermarket chain (BHX) has a retail system covering urban areas and penetrating rural markets in Ho Chi Minh City and neighboring provinces This model is a valuable practical lesson for Vietnamese staple retail enterprises in Red River Delta o complete their retail system in current and future period 2.4.2 Experience of Pantaloon Retail India Ltd (India) The organization manages the retail system in the Western way but factors such as store layout, goods display, valuation, store atmosphere follow the customs of each area, including rural ones of India This innovative application has helped Pantaloon brand to quickly approach the very traditional customers, as well as to have a modern and effective management model 2.4.3 Combining e-commerce with rural retail systems of JD.com (China) JD.com's innovative ways of integrating e-commerce with rural retail outlets have helped this enterprise to expand its retail system across Chinese rural markets This is an outstanding experience for Vietnamese enterprises in investing and completing staple goods retail system in rural area of Vietnam 2.4.4 Lesson manipulated in staple goods retail system in rural areas of Vietnamese enterprises Lessons manipulated for Vietnamese enterprises: Firstly, it is necessary to carefully study about the characteristics of Vietnamese rural customers and determine the potential of the rural market that they chose; Secondly, assortment, display and pricing of commodity; Third, forming local supply chain and using local 12 labor; Fourth, combine store and e-commerce retail in rural areas CHAPTER 3: CURRENT SITUATION OF STAPLES RETAIL SYSTEM OF VIETNAMESE ENTERPRISES IN RURAL AREAS OF THE RED RIVER DELTA 3.1 Overview of the retail environment of staple goods in rural areas in Red River Delta 3.1.1 Natural, socio-economic conditions in rural areas in Red River Delta The Red River Delta currently has 11 provinces and cities Rural areas in Red River Delta include 2018 communes and towns The topographic and transport conditions are quite favorable with the highest population density over the country, helping the Red River Delta become an attractive market for the development of retail trade 3.1.2 Domestic policies and international commitments relating staples retailing in rural areas in Red River Delta The domestic policies and international commitments relating staples retailing bring Vietnamese enterprises in the rural areas in Red River Delta not only development opportunities but also challenges: Opportunities for enterprises: infrastructure development, improve rural inventory system; policies for developing modern retail types (such as supermarkets, shopping centers) of enterprises has gradually approached rural markets; diversity sources of goods brought from FTAs have been valid However, some limitations still exist, along with no motivation and hidden challenges against Vietnamese enterprises such as: The overall strategy for the retail industry is still in progress; enterprises are not received incentives in financial merchandise and private credit; overlapping policies; quality control is not tight; there is no mechanism to encourage human resource training for retail industry; there is no policy to promote the establishment of trading centers connecting retailers and manufacturers; slowly issued plan cannot adapt with the change; there is no specific incentive policies for enterprises who develop a staple retail system in rural areas 3.1.3 Overview of consumers in rural areas in Red River Delta - Due to the increasing income, living expenditure is expected to increase - Urbanization has helped to narrow the gap between rural and urban consumers - Two traditional retail types (markets and grocery stores) are still the first choice, however, more than 30% of rural customers have approached and shopped in modern retail formats - Personal care products, household items, milk, spices are purchased from supermarket and shopping malls but with low frequency - Convenience and proximity are also the criteria affecting decisions of purchasing location - Rural consumers are influenced by crowds more than urban ones - Three important channels of information for rural people in the North of Vietnam include: Advice from friends, family of relatives; Advertisements on 13 TV; Advice from retailers (Kantar Worldpanel - Media survey) - General and mini supermarkets are highly appreciated by rural consumers in comparison with other types of retail 3.1.4 Overview of Vietnamese staples retailers in rural areas of Red River Delta In rural areas of Red River Delta, retail businesses are popular at the micro, small and medium scale, which are formed from individual businesses and grocery stores In addition, the Red River Delta has had the appearance of a retail system of of nationwide businesses or in provinces and in new urban areas or town centers The majority of retail establishments in the Red River Delta region are invested by small and medium enterprises operating mainly in the field of commerce, some big enterprises with financial potential and multidisciplinary activities The surveyed retailers all deploy store-retail, a small number of enterprises initially combined the non store-retail via the internet and telephone 3.2 Current situation of staples retail system in rural areas in Red River Delta of Vietnamese enterprises 3.2.1 The situation of staples retail system in rural areas in Red River Delta of Vietnamese enterprises 3.2.1.1 External elements a) The situation of staples retail market in rural areas in Red River Delta Total staples retail sales increased rapidly Markets and groceries are still popular in rural areas, beside the emergence of modern retail types such as supermarkets, small and medium-sized shopping centers Staple retail businesses in rural areas are generally in small scale, operating mainly in the commercial aspect, but there are also some with nationwide scope, having their own retail chain system The main retail form is still through the stores b) Situation of competition in staples retail business in rural areas in Red River Delta The level of competition in rural areas is not really fierce, Vietnamese enterprises that want to dominate the rural staples market will have to face mainly traditional retail types and overcome the specific difficulties of the rural market 3.2.1.2 Internal elements Beside some large enterprises with nationwide operating scope, most of Vietnamese staple retail businesses in Red River Delta are small and super small scale The ambition to invest in the development of modern retail types seems to face greater challenges compared to the limited capacity in terms of capital, organizational level and management ability 3.2.2 Current situation of determining targets staples retail system in rural areas in Red River Delta of Vietnamese enterprises According to the author’s survey results in 2017, the most important factors affecting the decision to invest in staples retail system in rural areas in Red River Delta of Vietnamese enterprises related to the enterprises themselves and the market For those that have decided to invest in rural areas in Red River Delta, depending on the scale, potential and development strategy, each enterprise set up different goals for its retail system 14 The author conducted a survey to specifically assess the importance of the common goals for businesses in investing staples retail system in rural areas in Red River Delta The result is presented as follows: Figure 3.8: The importance of targets for the staples retail system at current time and the period of 2020 - 2025 Note: = Very unimportant; = Not important; = Average; = Important; = Very important Source: Survey results (2017) 3.2.3 Current situation of staples retail planning system in rural areas in Red River Delta of Vietnamese enterprises * Current situation of retail system planning of Vietnamese enterprises regarding retail type: For shopping centers: Some large enterprises, which have sufficient capacity, have planned investment in shopping centers in rural districts in Red River Delta However, in fact, not many of those plans are being implemented, except for a few small shopping centers (category or not yet regarding the shopping center classification) For general/specialized supermarkets: Enterprises aim to increase the number of retail outlets to cover the market The same and medium scale supermarket area are popular, corresponding to type 2, type in the supermarket classification For mini supermarkets, convenience stores: Stores have small area, only from 30 - 200 m2, arranged closely to residence hall Some chain of large enterprises are often planned to be developed in urban areas first, then extended to suburban areas, but the number is still limited Meanwhile, small convenience stores and small supermarkets invested by small and medium local enterprises often lack of location planning, have not determined strategies and goals clearly for their retail system * The importance of regional and site selection criteria in retail system planning Factors affecting the selection of retail site are shown in Figure 3.10 Figure 3.10: The importance of criteria when selecting areas and locations for setting up retail establishments of rural enterprises in RRD Note: = Very unimportant; = Not important; = Average; = Important; = Very important Source: Survey results (2017) The criteria especially appreciated by enterprises in the selection of areas and locations include: Close to or in the high density population areas (4.45 points); convenient traffic (4.4 points), and residential characteristics and income (4.3 points) 3.2.4 Situation of mixed retail policies in rural areas in Red River Delta of 15 Vietnamese enterprises Figure 3.11 indicates the average value of the importance of criteria used to select the items structure, based on the survey results of author in 2017 Figure 3.11: The importance of criteria used to select product assortment of enterprises in rural areas in Red Rural Delta Note: = Very unimportant; = Not important; = Average; = Important; = Very important Source: Survey results (2017) In order to comprehensively evaluate mixed retail policies for retail enterprises in rural areas in Red River Delta, the author conducted a survey about the importance of criteria used to select retail establishments of customers and self-assessment of enterprises on the same grade scale, and compared the results (Figure 3.12) Figure 3.12: The importance of retail establishments selecting criteria of customer versus self-assessment of enterprise Customer: = Very unimportant; = Not important; = Average; = Important; = Very important Enterprise: = Very weak; = Weak; = Average; = Satisfied; = Very satisfied Source: Summary of the author's survey results (2017) The results illustrate that most of the criteria that customers value when choosing stores are related to the advantages of modern retail types and enterprises are doing quite well This can be considered as an encouragement for those operating or preparing to invest in modern retail facilities in rural areas in Red River Delta 3.3 Criteria for assessing the retail system of staple goods in rural areas in the Red River Delta of Vietnamese enterprises The company has paid attention to the basic criteria in monitoring and evaluating the retail system such as finance, personnel and customers Because most of the businesses are small and medium-sized enterprises, even micro, they not pay attention to the criteria of system structure Some enterprises, depending on their specific characteristics, have begun to use a set of criteria for evaluating productivity in retailing, allowing enterprises to evaluate the performance of the retail system in investing, using people and facilities 3.4 Overall assessment of staple goods system in rural areas in Red River Delta of Vietnamese enterprises 3.4.1 Success and convenience Firstly, the Vietnamese Communist Party's policy and the legislation of the government encourage the development of rural retail trade Secondly, most of the provinces in Red River Delta have developed commercial planning or retail planning as a basis for the development of the local distribution system Thirdly, the rapid speed of urbanization, the commercial infrastructure of rural areas in Red River Delta has been gradually improved These are favorable 16 conditions to complete retail systems in rural areas in Red River Delta Fourthly, staples retail system of Vietnamese enterprises has been formed and gradually developing, contributing to the diversity of retail system and upgrade commercial infrastructure of rural areas in Red River Delta Fifthly, staples retail facilities of Vietnamese enterprises have tried to diversify products assortment in rural areas in Red River Delta Sixthly, Vietnamese enterprises invested in staples retail system in rural areas in Red River Delta have contributed to improve civilization and people's life 3.4.2 Limitations and causes 3.4.2.1 Limitations Firstly, most of Vietnamese retail enterprises in rural areas in Red River Delta are small and super small; spontaneous development, lack of connections between small retail businesses, and between small retail businesses and manufacturers to form retail systems and larger scale chains having stronger competitiveness Secondly, most of staples retail businesses in Vietnam are not really interested in planning the overall business strategy, including the development plan of a retail system and investment in branding for the business itself Thirdly, staples retail system is still limited in structure, quantity and market coverage Fourthly, the modern retail types still contain certain limitations, not completely modern, the scale and content of operations are irrelevant to the name due to the influence of real conditions in Vietnam Fifthly, although Vietnamese retail businesses have made a lot of efforts, product assortment is still not really diversified and fully meet the needs of rural consumers Sixthly, the quality of the workforce is not high, not commensurate with the development needs 3.4.2.2 Causes of limitations a Objective causes Firstly, the economies of the rural areas in Red River Delta are unequally developed Secondly, the legal framework supporting enterprises is not really good Thirdly, investment encouragement and preferential policies are still slowly issued, inconsistent and limited Fourthly, logistic costs are still high, unprofessional connecting the source of goods since the infrastructure is not synchronized Fifthly, the awareness of some local leaders is inappropriate about the position, role and potential of retail industry in general and domestic retail businesses in particular b Subjective causes Firstly, most of the businesses are in the progress of finding and forming the appropriate retail system model Secondly, retail enterprises are mainly developed from individual, small businesses with weak financial capacity and limited ability to raise capital 17 Thirdly, awareness as well as the ability to prevent counterfeits and poor quality goods, access origin, ensure food hygiene of retail are still limited Fourthly, the ability to gather information and forecast the market demand of domestic enterprises in rural areas in Red River Delta is still weak Fifthly, the quantity and quality of the local workforce in the retail sector in rural areas in Red River Delta is generally low 18 CHAPTER 4: SOLUTIONS FOR COMPLETING THE STAPLES RETAIL SYSTEM OF VIETNAMESE ENTERPRISES IN RURAL AREAS OF THE RED RIVER DELTA UNTIL 2025 4.1 Development prospects and opportunities, challenges for Vietnamese enterprises in completing the retail systems of staple goods in rural areas of the Red River Delta 4.1.1 Development prospects for Vietnamese enterprises in completing the retail systems of staple goods in rural areas of the Red River Delta in the upcoming time Firstly, the domestic consuming market will develop in both quantity and quality Secondly, the impact of technology change helps new retail methods more easily penetrate, the opportunity to have a small-scale retail business, use modern sales methods Thirdly, the prospects from the retail market also bring opportunities for businesses to develop in the countryside Fourthly, the prospects which are brought from changing the behavior of rural consumers 4.1.2 Opportunities and challenges for Vietnamese enterprises in completing the retail system of staple goods in rural areas of the Red River Delta - Firstly, enterprises will have a great opportunity to exploit the potential of retailing staple goods in the large area - Secondly, economic conditions are gradually stable and achieving excellent growth rates - Thirdly, opportunities from trading and mergers between domestic and foreign retailers are and will be active in the retail market in the Northern region In addition to the prospects, there are still many challenges in developing the retail system of staple goods in the Red River Delta such as: - Firstly, legal difficulties in supporting Vietnamese enterprises are lacking, overlapping, not having specific guidelines and legal documents for Retail business - Secondly, Vietnam has signed many Free Trade Agreements that brings opportunities for economic development but also a big challenge for the retail industry - Thirdly, competing with traditional retail activity is still a big challenge for modern retail businesses - Fourthly, rural commercial infrastructure is still out-of-date, not meeting the demand (logistics infrastructure, warehousing) - Fifthly, the training of workers in rural retail trade has not been paid enough attention - Sixthly, mergers and acquisitions provide opportunities but also major challenges in preserving the brand and causing cultural conflicts after implementing these activities 4.2 The view of completing the retail system of staple goods of Vietnamese enterprises in rural areas of the Red River Delta until 2025 Firstly, the completion of the retail system should be based on the orientation of trade development in the rural areas of the Red River Delta region and in line with the 19 New Available Retailing methods general trade development plan, in line with the development plan of the fields and sectors of the whole country in the direction of openness which is capable of deep and wide international integration, closely linked with other regions in the country Secondly, completing the retail system ensures to make good use of the advantages of the Red River Delta to improve competitiveness for domestic businesses Thirdly, perfecting the retail system to ensure restructuring in the direction of greening, reducing emissions and in accordance with climate change conditions of the Red River Delta Fourthly, the completion of the retail system in the rural areas must ensure employment opportunities for the rural people, significantly improve the income of labor and the quality of people's lives Fifthly, completing the retail system based on promoting growth through creativity Sixthly, it is necessary to apply appropriate technology in retail business in Vietnam Seventhly, attention should be paid to training workers and building a highly productive and ready-to-work retail force Eighthly, Vietnamese enterprises need to strengthen connection with new suppliers from ASEAN and countries around the world, make the most of the advantages from market opening 4.3 Basic solution to complete the retail system of staple goods of Vietnamese enterprises in rural areas of the Red River Delta 4.3.1 Completing the retail system of staple goods is associated with long-term retail strategy of enterprises in rural areas of the Red River Delta Retail businesses can study to complete the retail system of staple goods in conjunction with one of the four growth strategy types illustrated in Figure 3.1 as follows: Market entry, market expansion, development of retailing methods, and diversification: Target market Available New Market entry (1) Market expansion (2) Development of Diversification retailing methods (Related/ Not related) (3) (4) Figure 4.1: Growth strategy of retail businesses Source: Igor Ansoff (1957); Michael Levy and other authors(2014) 4.3.2 Improving the structure of the retail system of staple goods of Vietnamese enterprises in rural areas of the Red River Delta It is necessary to form domestic enterprises strong enough in finance, vision, technology, management capacity to act as a "conductor" to lead and link the retail system in the South Vietnam through strengthening links, join voluntary chains 20 About the retail system of staple goods: The retail system of enterprises can include the types as shown in Figure 4.4 In order to perfect the structure of their retail system, businesses can coordinate various types or select a type which is suitable to the conditions of the businesses them self Shopping center Agency Supermarket Retail system of enterprises Franchise Convenient store Figure 4.4: Types of stores in the retail system of staple goods of Vietnam Enterprises Regarding the spatial distribution of retail facilities in the studied area: retail businesses also need to have their own orientation in distributing retail facilities in two areas: district (town) center and commune area 4.3.3 Applying modern planning techniques for retail system of staple goods of Vietnamese enterprises in rural areas of the Red River Delta Retail businesses in developed countries around the world use commonly techniques of location analysis and planning: sensory-based techniques (gut feelings), checklist techniques, analogue techniques Vietnamese businesses are also using these methods in selecting location, especially on sensory-based methods In the actual conditions of our country, these three techniques are more or less suitable and easy to apply to Vietnamese enterprises, although there are many limitations In addition, for large enterprises with financial, technical and information gathering capabilities potential, along with data supports from statistical organizations, enterprises can improve analytical techniques and retail locations plans by applying the method of using GIS software (Geographical information systems) 4.3.4 Branding of Vietnamese retail enterprises, designing staple goods assortment suitable for rural areas Building a private brand of Vietnamese retailers is both an urgent requirement and a long-term, fundamental solution to help businesses dominate the rural staple goods market and compete success with foreign enterprises In order to successfully build the brand of retailers, businesses need to pay attention to implementing methodically, synchronously elements as shown in figure 4.5 below: 21 Location Promotion Goods and prices The brand image of the retail system Designing points of sales and Services at the store display Sales force Figure 4.5: Basic elements constituting the brand image of the retail system of enterprises Source: Author synthesize However, branding is a solution that requires a thorough investment, longterm, not profitable in the short term so often only large enterprises with strong potentials are interested in investing, while small businesses face more difficulties Depending on their abilities and characteristics, small businesses can also build their brands by themselves without requiring too great investments 4.3.5 Developing sales force to meet the needs of retail businesses of staple goods in rural areas of the Red River Delta of Vietnamese enterprises One of the difficulties of retail businesses in implementing a retail system of staple goods in rural areas, is the shortage of manpower in both quantity and quality Enterprises wanting to improve the retail system and sustainable development in rural areas of the Red River Delta need to solve the human resource problem through a number of solutions: Building joint culture career; Need to have clear orientation on human development; Recruitment and training on-the-spot labor; Rotate managers 4.3.6 Enhancing the application of science and technology in operating the staple goods retail system of Vietnamese enterprises Technology along with new consumer trends is drastically changing the retail sector Vietnamese retail businesses may consider making use of technological strengths in such stages as: collecting and processing data; Operation at the store and for the whole system; Business goods management; Deploy multi-channel retail system 4.4 Some recommendations to facilitate Vietnamese enterprises to complete their staple goods retail system in rural areas of the Red River Delta 4.4.1 Recommendations to local authorities Planning, updating planning, regulating and developing retail distribution system in line with local development strategies and market practices 22 Spend construction land fund to arrange retail facilities, commercial infrastructure with orientation, appropriate planning Have investment support and preferential policies for enterprises investing in the construction of modern retail establishments in less vibrant places, limited purchasing power, slow capital recovery time and low profits Have a policy of exemption / reduction of land rent and income tax for retail businesses in the first few years, especially those with a high percentage of domestic goods Promote administrative reform, practical support for businesses, shorten the time to procedures related to business, land, tax Allow businesses to convert some market models into new market models, multi-functional trade centers Strengthen legal support, credit support to limit asset mortgage and preferential interest rates 4.4.2 Recommendations for the Government and line ministries Develop the overall strategy for developing the domestic trade market, including retail distribution in accordance with the trend of integration and protection at present Plan to develop a retail network suitable and synchronous with regional development plan, ensuring harmony in terms of quantity and space, consistent with local construction planning Have incentive policies, support supermarkets, food chain stores to buy products in rural areas and encourage producers to supply agricultural products through supermarkets, food chain stores Have a mechanism to encourage the establishment of alliances for the sale and purchase of goods, the development of commodity supply chains, focusing primarily on the supply chain of essential agricultural products Develop retail in terms of modernization and expanding the scale, limit rampant and fragmented development and lack of links Have credit preferential policies and establishment of a domestic market development fund, with solutions to support domestic distribution enterprises to access goods sources Encouraging and facilitating for developing large-scale retail companies Refer to models of support for foreign domestic enterprises to provide free support to businesses that have access to advanced technology in the 4.0 era In rural areas, consolidate, upgrade and develop traditional markets, encourage the development of other commercial infrastructure such as mini supermarkets, convenience stores /department stores Research on building and operating ecosystems has both ensured the entry of foreign companies while protecting and developing domestic businesses, encouraging the connection of domestic businesses with foreign enterprises 23 CONCLUSION Many experts believe that rural markets in Vietnam in general and rural markets in provinces of the Red River Delta are currently very potential market and have not been interested in exploiting This market will continue to grow, transform and gradually become the focus for staple goods retailers, so understanding who the consumers are, what they buy, where they dp most of their shopping as well as how they shop will be a prerequisite for future success With the general context of the staples retail industry, it is found that in rural areas, there are modern retail shops, but they have a low proportion and most of Vietnam's retail businesses have small and medium scale Retail facilities are often set up by businesses in suburban areas of large urban centers or district and commune centers There is a gradual transition from traditional retail business (groceries, markets) to modern retail types such as convenience stores, specialized stores, mini supermarkets and supermarkets Meanwhile, Vietnamese enterprises are still limited in retail organizations in this area This is the reason why the researchers choose to study the topic of the organization of retail sales of staple goods in rural areas of the Red River Delta of Vietnamese enterprises Through research, the researchers have systematized the theoretical function of researching essential consumer goods retail system in rural areas of enterprises The result of the situation analysis also reflects the picture of the organization of essential consumer goods retail activities in this area The researchers believe that basically the staple goods retail system of Vietnamese enterprises has gradually penetrated into the rural market although there are still shortcomings in scale and distribution due to limited resources and lack of experience in managing and operating modern business models From that assessment, the researchers have proposed some solutions and made some recommendations to help businesses complete the staple goods retail system in rural areas in the near future Although there have been many attempts but due to limited research experience and the ability to access data of the author, the thesis still has some limitations Firstly, the thesis only focuses on researching some contents related to the retail system of enterprises (as limited in the introduction of the thesis, the scope of research) without going into the research e-commerce, financial and business logistics aspects, factors that affect the retail system Secondly, the solutions of the thesis are not detailed for each type of retail associated with specific conditions of each community when organizing a retail system for rural areas in the Red River Delta These are the aspects that can open the next direction to study the e-commerce, finance and logistics for the retail system of enterprises, solutions for each type of retail associated with specific characteristics of each locality when organizing the system retail to rural areas, Besides, the thesis also inevitably has certain shortcomings The author wishes to receive valuable comments and suggestions from scientists, teachers and business managers so that the author can improve his research With great thanks from the author! ... retail system of staple goods of Vietnamese enterprises (enterprises established or registered under Vietnamese law, headquartered in Vietnam and owned by Vietnamese people with 50% of the authorized... areas and lessons for Vietnamese enterprises 2.4.1 Experience of Bach Hoa Xanh mini-supermarket chain of Mobile World Joint Stock Company (in the South of Vietnam) Bach Hoa Xanh mini-supermarket chain... planning technology for Vietnamese staples retail enterprises in Red River Delta; Building a brand of Vietnamese retail businesses, designing suitable product assortment for Vietnamese economy; Improving