The Southeast Asian nation has continuously lost its attractiveness in the ranking of the US-based consulting firm since it topped the list in 2008, according to the 2012 Global Retail Development Index (GRDI).
It fell to the 6th place in 2009, 14th in 2010 and 30th place in 2011, according to A.T. Kearney’s annual GRDI.
In 2011, Vietnam slid nine grades to the 23rd position among 30 surveyed emerging economics, after China, India, Sri Lanka, Morocco, Kazakhstan.
“The weakness of Vietnam in infrastructure and costly space rental are barriers for foreign rentals,” said GRDI 2011 report.
“Meanwhile, domestically traditional distribution channels still are dominating the market while new forms are emerging. Competition is getting fiercer, that’s why foreign investors find it difficult to participate.”
This is the third consecutive year Vietnam’s retail market was downgraded.
However, A.T. Kearney also noted that “Vietnam still has certain attractiveness thanks to the size of market as well as number of consumers.”
“By 2012, the market may reach the size of $113 billion and the population is estimated at nearly 89 million people.” Vietnam’s total retail revenue reached some $80 billion in 2010.
In 2008, Vietnam jumped three grades, surpassing India to become the world’s most attractive market thanks to strong economic growth, improved policies which were friendlier to foreign investors and demand of consumers on the modern retail forms.
One year later, Vietnam’s retail market only ranked the sixth in terms of attractiveness, and lost the Top ten attractive retail markets in 2010.
In 2012, Brazil and Chile remain the top two among 30 attractive destinations for retail investment for the second time.
China this year jumps three notches to the third position in the list as its retail revenue is expected to grow at a double-digit rate in 2012.
Malaysia, the Philippines and Indonesia are three ASEAN members that are still present in the list.
GRDI, a study of retail investment attractiveness among 30 emerging markets, was first published in 2002.
The index is based on a set of 25 variables including economic and political risks, retail market attractiveness, retail saturation, infrastructure quality, and legal framework among others.
It aims to help retailers prioritize their global development strategies by ranking the retail expansion attractiveness of emerging countries.