Asia Business Channel

Can Ho Chi Minh City become a regional trade hub?

Can Ho Chi Minh City become a regional trade by 2025?  That is the question that both business and government officials have been asking themselves after the city’s Department of Industry and Trade released a master plan for the trading sector that seeks to make the city a key regional hub by 2025.

Nguyen Quynh Trang, Deputy Director of the Department of Industry and Trade, said in remarks to media that the new plan focuses on four key areas: exhibitions & trade fairs, exports, logistics and retail / wholesale. According to Nguyen, the city’s strategy is to boost exports of items that are competitive and environment-friendly; have high added value and technological content; and to maximize free trade agreement opportunities.

The city also has a plan reach out to overseas Vietnamese communities to encourage them to become part of a distribution system abroad that can market and sell Vietnamese products through their own efforts and those of local distributors around the globe.

In the retail / wholesale sectors, the city plans to encourage retail businesses, such as convenience stores to expand their chains in outlying areas of the city and to place their stores in “new markets”.  These new markets include apartment buildings; export processing zones and industrial parks.

The city also announced that it does not plan to build or expand “traditional” food markets.  Instead, the city plans to upgrade infrastructure and facilities at existing markets. The city will monitor the existing markets to improve their service quality and management and to ensure the origin of food products and their hygiene and safety. The city will also monitor wholesale and retail prices to ensure stability and transparency in these markets.

According to Ha Ngoc Son, an official from the department’s import and export management division, HCMC currently has 239 markets, 207 supermarkets, 43 shopping malls, and 1,800 convenience stores. Based on projections, consumer sales through modern retail channels will be 40% of total sales by 2020 and 60% by 2030.  Because of changes in both residential and commercial areas, the city plans to develop its markets, supermarkets and shopping centers in a manner that benefits both businesses and consumers. 

A key point for the city is that consumers should have a variety of products readily available at locations that are convenient for them to access and that markets be run in an efficient manner to ensure the steady supply of products, transparency in the origin of products sold in the markets and procedures to ensure the safety of products.

To support these goals, the city will update is zoning plans reflect these changes and intends to develop the 3PL (Third Party Logistics) market for inner-city distribution in a manner that will reduce production and transportation costs and that is integrated with domestic and international transportation networks. 

Related to developing the exhibition and trade shows sector, the city has a plan to expand facilities beyond the current Saigon Exhibition and Convention Center that is located in District 7. The government plans to expand facilities to include two new centers – one in District 2 and the other in the Nha Be district.  

Travel industry experts hope that that the District 2 convention and exhibition center be built as quickly as possible to serve an international MICE (Meetings, Incentives, Conventions & Exhibitions) market that doesn’t consider HCMC for regional and international events since the SECC’s facilities are too small.  They point out that the majority of 4-star and 5-star hotels are in District 1, making a District 2 convention and exhibition space convenient to visitors.

Other experts point out that a Nha Be convention and exhibition center could be developed as a permanent trade show space for Vietnamese industrial products that will encourage visitors and sales throughout the year and will lead to further economic development in the city.  

The overall consensus of travel industry experts and city planners is that with three convention and exhibition centers – a large international facility in District 2, a medium space at the SECC in District 7 and an industrial trade show facility in the Nha Be district, HCMC’s MICE sector would be in a good position to compete for regional events of different scale and types which will benefit airlines, hotels and a variety of business and consumer sectors.

Whether HCMC can become a regional business hub by 2025 will also entail the city overcoming other infrastructure issues including the expansion and modernization of Than Son Nhat airport; development of city streets and highways that eliminate bottlenecks and flooding to make transportation more efficient; and the development of the city’s mass transportation system which has been delayed due to city and central government issues related to funding.
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