Enterprises will get more opportunities to develop when the networkbetween producers and distributors is promoted, said Chairman of theHanoi Supermarkets' Association Vu Vinh Phuc.

He said that atpresent, the domestic retail network was shifting from traditional wetmarkets to modern ones which include supermarkets, shopping malls andconvenience stores.

"The modern distribution network helps byhaving minimum intermediary steps, while the producers maximise theirprofits and the distributors have a stable supply," he said.

Nguyen Lam Vien, Director of Vinamit, a Vietnamese dried food producer,said that boosting partnerships with its domestic and overseas retailerswas an effective way of surviving and maintaining growth during thecurrent economic slowdown.

Last year, his company cooperated withdomestic supermarket operator Co.opmart and foreign distributor Dole topromote its products. Displaying products in branded supermarketshelped them get better access to consumers, he said.

However,economic experts are worried that without competence and capacity,domestic producers will be vulnerable to mergers and acquisitions bybigger foreign firms when foreign investors penetrate deeper into thedomestic market.

Deputy Director of the Central Institute forEconomic Management Vo Tri Thanh said that this year, Vietnam would beopening up to foreign investors and domestic enterprises, and thoseoperating in the retail sector especially need to improve their capacityand competitiveness to survive the tough competition.

"Integration is not only about challenges but also about opportunitiesfor market expansion and technology transfer," he emphasised.

However, Phuc from the Hanoi Supermarkets' Association said that in thelast decade, there was little policy support for the retail sector.

So far, only retailers in rural areas have enjoyed incentives to access land and develop distribution chains there, he said.

Chairwoman of the Vietnam Retailers' Association Dinh Thi My Loan saidthat a system and infrastructure to support the retail sector wasneeded.

So far, it is still very difficult for enterprises toaccess land to develop logistics infrastructure, includingstorehouses.-VNA