A. T. Kearny’s Global Retail Development Index 2008 (GRDI; download PDF) has ranked Vietnam as the number 1 emerging market for retail opportunities. After 3 years in a row Vietnam replaces India from the top place. Reasons are a strong GDP growth (6.5% for the 1st half of 2008), a better political framework and the increase in customer demand of modern retail models.
Other hot places for retail investments are Russia and China (4th place). EMEA region is very attractive for European retailers. Egypt, Morocco and Saudia Arabia take 5th – 7th place.
I was this year in Vietnam and saw for oneself, that there is a prospering economic mood and appetite among the lovely Vietnamese people.
But there are some pitfalls. Vietnam has a high external trade and foreign direct investment (FDI) share relative to the size of its GDP. This share drives the growth. That’s the reason why Vietnam is vulnerable to a worldwide economic downturn as well as the high inflation rate is hunting the growth. The consumer price index (CPI) increase by 10% in average. Some other reasons are for sure: Infrastructure limitations, trade and budget deficit as well as the lack of a more skilled workforce.
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