Định hướng và các giải pháp phát triển ngành dịch vụ phân phối ở Việt Nam (LA tiến sĩ)

MINISTRY OF EDUCATION
AND TRAINING

MINISTRY OF INDUSTRY AND
TRADE

INDUSTRIAL-COMMERCIAL POLICY AND STRATEGY INSTITUTE

NGUYEN THUY HIEN

ORIENTATION AND SOLUTIONS ON DISTRIBUTION SERVICE
INDUSTRY DEVELOPMENT IN VIETNAM
Major: Commerce
Code: 62.34.10.01

SUMMARY OF DOCTORIAL DISSERTATION IN ECONOMICS

Hanoi - 2017


WORKS WAS COMPLETED AT
INDUSTRIAL-COMMERCIAL POLICY AND STRATEGY INSTITUTE
MINISTRY OF INDUSTRY AND TRADE

Scientific instructors:
1. Assoc. Prof. Dr. Le Trinh Minh Chau
Industrial -Commercial Policy and Strategy Institute
2. Dr. Le Hoang Oanh
Ministry of Industry and Trade

The dissertation will be defended in front of the dissertation marking

Council at Institute level
Held at Industrial - Commercial Policy and Strategy Institute
Ministry of Industry and Trade
Address: 46 Ngo Quyen - Hanoi.
At .... hour .... day .... month ..... 201....

It is possible to study the dissertation at:
1. National Library of Vietnam - Hanoi
2. Library of Industrial - Commercial Policy and Strategy Institute


PREAMBLE
1.
Necessity of the Dissertation subject
The service area plays an important role in the economic
development process of each country, one of the contributions to the
growth of service area is distribution service industry (DVPP). Distribution
service in Vietnam over the past time was increasingly expanded on scale,
appeared more modes, types of distribution service with the increasingly
improved service quality, types of distribution service mixed, supported
each other to meet better the requirement on product consumption,
contribute to promoting the production, economic growth, improve the life
for residents. Although there were many advances, in general, distribution
service industry of Vietnam has not met the development requirement of
the economy: small scale, backward knowledge, too many types of sales
organization and small businessman, small-scaled development without
formation, the distribution system has not been organized well, close
association has not been established from manufacturer to consumer in the
supply chain, has not contributed to changing the production structure and
promoting the role of leading the production industries to develop…

With the shortcomings of distribution service industry as stated
above, from the economic development prospect of the country, it shows
that the development potential of the industry is very big, in which, the
factors creating such prospects are: attraction of much foreign investment
capital, developed tourism, increased average income per capita, goods step
by step participated in the global distribution chain… and to be suitable for
the objective of taking the country to basically become an industrial
country in 2020, one of the criteria of industrial country is that service
industry accounts for high density and modern development, the research
aimed at proposing the orientation and development solutions of
distribution service industry under the civilized, modern direction suitable
for economic development of the country is necessary. There fore, the
author chose the subject: “Orientation and solutions on developing
distribution service industry in Vietnam” to be research subject for
doctorial dissertation.
2.
Overview of research situation relating to dissertation subject
Together with economic development of the country, distribution
service industry over the past time had very noticeable development steps,
especially since our country joined in the World Trade Organization
(WTO). The industry plays a very important role in orienting the


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production, is connecting bridge between supply and demand, had great
contribution to GDP of the whole country. Therefore, distribution service
industry is cared by many domestic and foreign researchers. Many
domestic and foreign works researched the distribution service industry;
however, according to the knowledge and approach of research student, to
the current time, there is no scientific works researching systematically and

fully the argument and reality foundations, development orientation on
distribution service industry with 4 sub-industries.
Scientific space
The previous research works focused on researching specifically a
or some distribution service sub-industries in particular, mainly researching
about wholesale, retail, supermarket, market, franchising... Or the research
also focused on each issue such business environment, investment of
commercial infrastructure… therefore, there was shortage of foundation,
argument research for distribution service industry such as: theoretical
foundation and systems of criteria for evaluation the development of
industry and each distribution service sub-industry; shortage of reality
research such as: evaluating the real situation of the effect factors,
especially the impact of State management for the development of
distribution service industry; SWOT analysis of distribution service
industry thence selecting the development orientation of distribution
service industry including 4 service sub-industries. There were also
researches on 4 distribution service sub-industries, however, there was
limitation on real situation evaluation, it was not full, comprehensive and
especially it did no reflect the most recent happenings or lacked of
development orientation for each distribution service sub-industry in the
future.
The development solution of distribution service industry in the
previous researches was not solved comprehensively. The issues such as:
The State formed the policy for development of distribution service,
improved the efficiency of the State management authority for the industry;
restructured the industry; improved the valued added chain of the industry
through improving the quality of service supply of the enterprises;
developed focused goods supply chains of the wholesale, retail enterprises;
food hygiene safety, consumer protection, goods consumption for farmer…
also had space in research. Therefore, the research subject is chosen to

contribute to compensating these spaces.


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3.
Research objective and task of the Dissertation
3.1.
Research objective: The research proposes the orientation and
solution of developing the distribution service industry in Vietnam
3.2.
Research task:
- Systemizing and contributing to supplementing the argument
foundation on the development of distribution service industry;
- Evaluating the real situation of the development of distribution
service industry in Vietnam; Real situation of factors affecting to the
development of distribution service industry.
- Proposing the orientation and solution of developing the
distribution service industry in the coming time.
4.
Object and limit of research scope of the Dissertation
Research object of the Dissertation subject: The dissertation
researches the development of distribution services, including 4 subindustries: Agent service; Wholesale service; Retail service; Franchising
service
Limit of research scope: Focusing on researching the argument
foundation of developing the distribution service industry, development
content of industry, effect factors, evaluation criteria and experience lessons
on developing the distribution service industry, real situation of the factors
affecting to the development of industry, determining the shortcomings and
reasons, issues in reality to be settled; SWOT analysis for distribution
service industry, propose ideas, orientations and solutions on developing

the industry in the coming period. The dissertation mainly researches the
development of the industry from a macro perspective (the State), does not
go into depth from the enterprise perspective. On space: Researching some
enterprises, business foundations in the retail distribution service industry
in 16 provinces and cities representing the economic regions of Vietnam.
On time: researching the real situation in the period 2007 - 2015 and
proposing the orientation, solution for the period to 2020, vision to 2025.
5.
Research method
General methodology: The dissertation is built on the basis of
Marxism - Leninism methodology on dialectical materialism and historical
materialism, in combination with the application of viewpoints, guidelines,
policies of economic development of the Party and the State.
Specialty method: Research of secondary document, statistics,
comparison; reference to ideas of enterprises, sociology investigation,


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summary of survey result, analysis, evaluation, SWOT analysis..
6.
New contributions of the Dissertation
- On argument: Forming the basic theoretical framework on
development of distribution service industry such as: concepts on
development of distribution service industry, wholesale, retail, franchising,
agent; putting forth the concept on development of distribution service
industry; forming 3 development contents of industry; building 4 evaluation
criteria on development of distribution service industry; researching
international experience and learning from experience for Vietnam.
- In fact: Applying suitable model and qualitative and quantitative
research methods to analyze, evaluate the actual state of development of

distribution service industry, in which selecting the model of researching
and surveying the real situation of business foundations of retail subindustry which is service sub-industry with many typical factors for the
development of distribution service industry, the result of survey and
analysis of model affirmed and enriched the evaluations on real situation of
distribution service industry. Thence, withdrawing 5 factors affecting to the
development of distribution service industry namely: capacity of service
supplier, ability to meet the service, apply science and technology in
management, factor of business environment, business location;
withdrawing the conclusions on shortcomings, reasons and especially 6
issues to be solved to develop the distribution service industry in Vietnam.
- On research purpose: Based on argument foundations and reality
as well as evaluation on strengths, weaknesses, opportunities and
challenges of 4 distribution service sub-industries, the forecast on
development tendency of distribution service industry in the world
determined 4 general orientation groups at macro-scale and specific
development orientation of 4 distribution service sub-industries in Vietnam
in the coming time. Proposing the general and specific solutions for the
development of each distribution service sub-industry.
7.
Content structure of the Dissertation
In addition to the parts of Preamble, conclusion, list of reference,
list of abbreviation, list of table, diagram, figure and appendix, the contents
of Dissertation includes 3 chapters:
Chapter 1: Argument foundation on distribution service industry
development.


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Chapter 2: Real situation of the distribution service industry
development in Vietnam.

Chapter 3: Orientation and solution to distribution service industry
development in Vietnam in the period to 2020, vision to 2025.
CONTENT PART OF RESEARCH RESULT
CHAPTER I
ARGUMENT FOUNDATION ON DISTRIBUTION SERVICE
INDUSTRY DEVELOPMENT
1.1. Concept on distribution service industry
1.1.1. Concept on distribution service industry
Although there are many different definitions on distribution
service, from basic arguments on distribution service, the classification way
of international Organizations and of Vietnam, the author can understand:
Distribution service is economic activity aimed at implementing the
connection between the manufacturer and consumer under different forms.
The development of distribution service industry is to increase the
productivity value of the industry and active change on industry structure,
create a reasonable industry structure having ability to exploit domestic
and foreign resources. Developing the industry from low level to higher
level, from not perfect to more perfect.
1.1.2. Concept on distribution service sub-industries
1.1.1.2. Wholesale concept
There are many definitions on wholesale, according to the research
document of expert group of EU - Vietnam Mutrap III Project in 2011, the
research student can understand: wholesale service is sales service to serve the
production demand, to resell or consume for occupation or business purpose.
1.1.2.2. Retail concept
There are many definitions on retail, according to the research
document of expert group of EU - Vietnam Mutrap III Project in 2011, the
research student can understand: Retail service is activity of selling goods
to final consumer to serve the purpose of individual or household
consumption”.

1.1.2.3. Commercial conception concept
There are many definitions on franchising, according to the production
classification system of the United Nations (Central Product Classification -


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CPC), NCS can understand that concession is the form that a distributor
(franchisor) sells to another distributor (franchisee) some franchises and
specific incentives, often implemented under the form of contract.
1.1.2.4. Agent concept
There are many definitions on agent, under Article 166 of the Trade
Law 2005, the research student can understand: Trade agent is trade
activity, thereby the agent deliverer and the agent agree that the agent will
be in its name to buy, sell goods to the agent deliverer or supply the service
to the agent deliverer to the customer in order to enjoy the compensation.
1.2. Development role and relationship of distribution service
industry
1.2.1. Role of distribution service industry
(i) Distribution service industry plays the role of connecting bridge
between production and consumption (ii) Contributing to solving the basic
contradictions on goods distribution of the market economy (iii) Playing
the role of product consumption, thereby promoting the production
industries to develop (iv) Creating the employment for the society (v)
Forming and improving the competitiveness of enterprises.
1.2.2. Development relationship of distribution service industry
The relationship among the industries: describing each member of
the system and distribution work divided to them such as: according to
length, width and intermediary types at each level of the distribution
system. The development relationship of distribution service industry
among the countries: are connected through 4 trade and service

implementation modes.
1.3.
Development content and criteria on evaluating the
distribution service industry development
1.3.1. Content of distribution service industry development
Firstly, developing the growth model of distribution service
industry in conformity to the process of converting the economic growth
model of the country, thereby the growth model of distribution service
industry needs developing at all 4 main points: (1) Developing structure of
distribution service industry synchronously, in a balanced way and
harmoniously (2) Developing the mode of creating profit from added value
of distribution service industry (3) Developing the business mode of
distribution service industry in conformity to the process of
industrialization, modernization of the country and international integration


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tendency (4) Developing the relationships in distribution service industry
to become modern, sustainable distribution system.
Secondly, developing favorable business environment, creating
complete, implicit, fair and consistent policy and law to facilitate the
industry to develop.
Thirdly, developing the resources of distribution service industry.
1.3.2. Criteria on evaluating the development of distribution service
industry
1.3.2.1. Criteria on evaluating wholesale and retail services
Firstly, the revenue growth rate of wholesale, retail distribution
service industry/revenue growth rate of industries in the entire economy;
Value added rate of wholesale service, retail service industries/GDP.
Secondly, development investment capital resources and labor of

wholesale service, retail service industry /total investment and labor of
entire economy.
Thirdly, developing wholesale service, retail service industry
according to the width, the increase of quantity of wholesale, retail
enterprises/foundation and/or business area, market share and/or sales
revenue/foundation/total enterprises of entire economy…
Fourthly, developing the distribution service industry according to
the depth, rate of circulation goods through modern distribution channels
(supermarket, trading center, utility shop…); The rate of added service for
customer; Transaction rate of the industry by mode of e-commerce…
1.3.2.2. Criteria on evaluating the development of agent
Developing according to the width, the increased quantity of agent
and diversification on types. Developing according to the depth, higher
quality of agent service and efficiency of agent service for economy.
1.3.2.3. Criteria on evaluating the development of franchising
Developing according to the width, quantity of foreign trade names
registered to operate the franchising of trade name increases. The forms of
trade name franchising is increasingly diversified. Developing according to
depth, the recognition of consumer on trade name and product of franchising.
1.3.2.4. Criteria on evaluating the factors affecting to the process of
developing distribution service industry
(1) The impact factors from the State management for the
industries through policy mechanisms (2) factors affecting to the


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development of distribution service industry are evaluated through 3
criteria: Capacity of service supplier; Satisfaction ability of the service
supplier; Business environment, through building the research model and
selecting the investigation of guarantee service type which is the type with

many typical factors for the development of distribution service industry.
1.4.
Factors affecting to the development of distribution service
industry
Factors affecting to the development of distribution service
industry include (1) Role of the State (2) Socio-economic development of
the country and International economic integration (3) Capacity of
enterprise in distribution service industry.
1.5.
Requirements and conditions needed to develop distribution
services industry
(1) It is necessary to understand the role and position of
distribution services industry (2) The State needs continue to improve
mechanisms and policies to facilitate the development of the industry (3)
Promoting competition in the distribution services industry (4) Encourage
creativity in the distribution service industry.
1.6.
Experience on developing distribution service industry of some
countries and experience lesson for Vietnam
1.6.1.1 Experience of Japan
Opening the door of retail market. Focusing the resources to form
retail companies under the supermarket form, quickly applying the
advanced distribution modes. The network of retail shops according to
chain has thick density, scale is not big, the shops and standardized and
managed in a centralized way, the presence of many intermediary levels
with high traditional xenophobic nature. The government builds the law
system governing the operation of distribution service, creates the equal
competition condition, prevents monopoly and cares much to the
development of infrastructure of the distribution service industry.
1.6.1.2. Experience of China

After opening the door, promulgated “Ordinance on retail” to help
the domestic groups take back the market share. Have policy on
encouraging the procurement activity, merging small enterprises to form
big supermarket groups having sufficient competitiveness to foreign
country and doing business under the model of association chain, shop
chain. Building and announcing “National standard on classification of


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retail types” to ensure the unity in managing and grading strongly to local
government. Promoting the development of the mode of applying the shop
under franchising chain through the franchising management Regulation.
1.6.1.3. Experience of Thailand
Commercial firms are organized under the model of chain and
many firms had modern logistics, goods distribution centers. The
government attaches much importance to the policies on supporting the
domestic small and medium retail enterprises to develop in order to
compete with foreign enterprises. Implementing the policy of promoting
retail modernization, upgrading the construction of small shops to become
retail shops under modern model, encouraging these shops to operate the
business under the chain.
1.6.2. Experience lesson on distribution service development
1.6.2.1. Successful lessons can be applied
For state management agencies
- Expanding direct distribution relations at the market areas through
traditional market network, on the other hand, strengthening the conditions
and factors for the development of advanced distribution modes through the
development of modern goods distribution systems.
- Building the law system governing the complete distribution
service activities, in each development period of the country with suitable

amendment, supplement, creating the healthy, equal competition
environment, encouraging the enterprises under all economic components
to participate in the development of distribution service, especially small
and medium sized enterprises. Attaching much importance to managing the
operation of distribution service by planning.
- Having specific strategy and objective program to promote the
association among the enterprises, forming big groups in the distribution
service industry. Having policy on supporting the small and medium sized
enterprises to improve the competitiveness, encouraging the enterprises to
do business under the model of centralized goods chain.
- Building and announcing “National standard on classification of
retail types” as the basis for ensuring the unity in management, carrying out
strong grading to locality in organizing the management of distribution
service activity.
- The government needs to pay attention to the development of
infrastructure for the distribution service industry to develop, encourage the


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enterprises to diversify the forms of distribution to meet the best the market
demand.
For businesses
Be proactive and willing to improve and improve the quality of
services, linkages and mergers between businesses, form large
corporations, reduce costs and modernize to compete with Foreign
company. Need to apply new technologies in goods distribution with
modern information technology.
1.6.2.2. Lessons should not be used
(1) Careful consideration should be given to whether or not a largescale retail establishment in the urban area should be established. (2) It
should not be fully decentralized, but there should be a mechanism for

inspection and control to create coordination between central and local,
local and local authorities.
CHAPTER II
REAL SITUATION OF THE DISTRIBUTION SERVICE INDUSTRY
DEVELOPMENT IN VIETNAM
2.1. Real situation of the distribution service industry development in
Vietnam
2.1.1. Wholesale
By the end of 2015, the whole country had 1,208 general wholesale
markets. The current network of general wholesale markets in our country
is still rather sparse and distributed unevenly, the wholesale transaction is
small and lacks of material facilities. 80% of markets is built solidly, the
market design is more reasonable than other types of market, but not yet
reached the modern level.
By the end of 2015, the whole country had 61 agricultural product
wholesale markets. The agricultural product wholesale markets in our
country have a wide scale and scope of operation at present. Compared
with the traditional wholesale markets, the agricultural product wholesale
markets are planned as the wholesale markets that are more modern and
have more functions including the important function is to play the role of
regulating the agricultural product market.
There are 3 types of wholesale company in the market, the
domestic wholesale enterprises are more and more developed but the
foreign enterprises have modern wholesale scale and technology, the


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wholesale price is lower because the customer services are convenient and
the promotion programs are attractive.
2.1.2. Retail

By the end of 2015, there were 8,660 markets in the whole country,
the number of markets increased rapidly, but the distribution was uneven,
the network of markets was still sparse in the rural and mountainous areas.
Most of the markets had small scale, the material - technical facilities were
sketchy, backward. The investment capital sources for market development
were limited. The business modes and transaction forms were mainly
backward, the business support services and services for buyers were not
been taken interest in development.
The whole country had nearly 2 million independent retail stores of
the private sector, these stores tended to increase rapidly, however, they
developed spontaneously and not as planned, affecting the urban landscape
and trade civilization. The types of convenience retail store increased
rapidly in quantity, scale and method of operation in a more professional
direction.
By the end of 2015, the whole country had 812 supermarkets, 162
shopping centers, the retail sales through the network of supermarkets,
shopping centers increased about 25%/year. Currently, there are about 415
enterprises participating in business in supermarkets and shopping centers,
in which the foreign-invested enterprises account for about 4%, and the
private economic sector accounts for over 80%. In the recent period, the
trading, merger in the field of retail have increased rapidly, the domestic
enterprises have to directly compete fiercely and face the risk of being
taken over by the foreign enterprises.
2.1.3. For Commercial agent
The number of wholesale enterprises and agents increased by more
than 18% in the period 2010-2015. The commercial agents focused their
business on the industrial consumer goods. The sales agents mainly stopped
at the central - provincial markets. The commodity price and quality control
in the commercial agent activities was still weak.
2.1.4. Franchising operation

The franchising operation has grown very rapidly with a growth
rate of about 15-20%/year, up to now, more than 159 foreign trademarks
have registered the franchise to Vietnam, in which the franchise in the field
of retail and fashion accounted for 27%. In general, this method is still new


12
because the enterprises have not paid attention to the business development
through this method.
2.1.5. Evaluate the real situation of the distribution service industry
development in Vietnam
2.1.5.1. For wholesale, retail service
(1) The value added of the wholesale service, retail service
industry in GDP increased by an average of 11.4% in the period 20112015, contributed to GDP equivalent to about 16-17% of the annual value
added of GDP.
(2) The sales growth rate of the wholesale service, retail service
industry grew year by year, the sales density of the enterprises in the
wholesale service, retail service industry was quite stable, the sales of the
foreign invested sector is dominating before the domestic distribution
sector enterprises, the sales of supermarkets, shopping centers of the
domestic enterprises is still at low level.
(3) The investment capital increase rate in the wholesale service,
retail service industry is always higher than that of the industries in the
economy, including foreign capital sources. The investment capital density
of the wholesale service, retail service industry makes up a small density of
the total investment capital of the whole industry. The state budget capital
invested in the industry is low, the investment capital is mainly from the
private economic sector.
(4) The labor in the industry ranks the third in the total number of
labors of the industries of the economy, the job creation capacity of the

industry is always higher than that of the economy.
(5) Develop the wholesale service, retail service industry in a wide
direction, the traditional market system is more and more developed, the
modern distribution system develops more quickly in the urban areas,
especially the great rise of mini supermarkets and convenience store chain.
In addition, there is also a rapid increase in the number of wholesale and
retail enterprises of FDI block in the market, and the trend of merger and
acquisition take place excitingly.
(6) Develop the wholesale service, retail service industry in a deep
direction, the infrastructure is still weak, asynchronous; the business mode
and the transaction forms are backward, mainly doing business according to
the method of seeking profits via price difference, the value added has not
been created in the process of supply; the business support service and


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service for buyers has not been professional, the development has not been
taken interest; The payment method is still backward; the level
management and organization level is loose...
2.1.5.2. For agent
The commercial agency activity is more and developed; The sales
of agent enterprises increases at the two-digit level. However, the
development of agent activity only concentrates much in many central and
provincial markets and there are still some inadequacies in the operation,
such as the selling price is not unified and the commodity and service
quality is still poor.
2.1.5.3. For franchising
The franchising business activity in Vietnam increases both in
quantity and field; The sales in the franchising activities increases by 1520%/year. The large domestic retailers have started to engage in this
business. However, the method of franchising business only stops mainly in

the large provinces, cities and the international franchising companies in
Vietnam with more attraction than the domestic companies.
2.2.
Real situation of the factors affecting the distribution service
industry development
2.2.1. Real situation of the State management of the distribution
service industry
In general, the relevant laws such as Commercial Law, Civil Code,
Enterprise Law, Investment Law, Competition Law, Electricity Law... have
been adjusted completely and relatively fully and in accordance with the
international commitments in the distribution service industry from the
legal system for market joining management activity, activity in the market
to the inspection and monitoring system.
2.2.2. Evaluate the implementation situation of the mechanisms and
policies
The policy on trade development has been relatively sufficient,
created the conditions for the distribution service industry development.
However, there is a lack of policies such as: encourage the investment in
commercial infrastructure development, guide the financial mechanism in
changing the model of market management organization, the execution of
the regulations for development of supermarkets, shopping centers still
meets with difficulties because it is unable to adjust the issues managed by
the other ministries and branches such as land, credit and tax; Have not


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issued the classification standards/criteria of wholesale, retail forms; the
regulations on entry into the capital contribution market, mechanisms and
policies guiding on M & A in the distribution service industry have not
been accomplished; The regulations of the law on tax and finance have not

separate regulations in order to control effectively the acts of price transfer...
- The legal framework for the franchising activity in Vietnam has
been promulgated quite closely to facilitate the form of business to develop.
However, it has not been comprehensive and synchronous, lacks of policies
to encourage and support the development of the domestic enterprises to do
their business in this method. The inspection and supervision of franchising
business activity has not been stipulated clearly. Some regulations on the
franchising conditions set for the foreign enterprises are unreasonable.
- The general regulations of the Commercial Law on agent have not
been concrete, not fully reflected the rights and obligations of the parties in
the agent relationship such as: Regulations on contract termination,
commodity ownership, trade promotion, support and after-sales services,
information supply, technical assistance and training, inspection of
violation acts...
2.2.3. Evaluate the real situation of the factors affecting the
development of the distribution service industry
Through the investigation, research modeling, data analysis with
the support of software SPSS 20.0, for the supermarkets and convenience
stores, it shows the order of factors that affect the distribution service
industry development DVPP is quite close to the evaluations on the real
situation of current development: The capacity factor of service provider
(scale, area of business premises, infrastructure, scale, labor level, capital)
has a great and main influence on the development of supermarkets and
convenience stores. The factor of ability to meet the service (type, quality
of goods, sales services enclosed….) ranks second. The next order is:
Factor of applying science and technology in the management of the
enterprises; Business environment factor; Business location factor.
For the traditional department and food stores, the capacity factor
of the service provider has the greatest impact in the impact factor;
However, unlike the supermarkets and convenience stores, the factor that

ranks second is the business environment, such as problems with the tax
agency, market management, police, fire prevention and firefighting, health
and environment agency… This is also quite close to the real situation ò
development of the traditional department and food stores, due to the


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spontaneous, fragmentary development, small scale, small capital, less
investment, so the business facilities has not paid much attention to the
quality of goods, type, origin of goods, food hygiene and safety...
2.3. General evaluation on the real situation of the distribution
service industry development
2.3.1. Successes
(1) For the development orientation, it has been formatted quite
comprehensively and specifically the objective of distribution service
development in the period 2001-2010; promulgated the policies and
regulations to encourage the development of distribution service as well as
to implement the state management for the distribution service (2) the
distribution service is more and more expanded in scale, appear more
methods, types of modern distribution service, the types of modern and
traditional distribution service mixes, supports each other to better and
better meet the requirements on product sales, contribute to promoting
production, economic growth, creating jobs, improving the life for the
people (3) the appearance of many foreign distribution enterprises in the
forms has contributed to changing the structure and face of the domestic
market in the civilized and modern direction, somewhat to meet the
demand for economic development of the country and in line with the
development trend in the world (4) the service quality of the distribution
service industry is more and more improved, the services enclosed with
sales are constantly renovated, meet basically the requirements on quality,

service of many customers.
2.3.2. Shortcomings
(1) The management and development institution of the industry is
not complete (2) the development level of the distribution service industry
is still low (3) the structure of the distribution service industry is still
backward (4) the business mode is still backward (5) the relationship in the
industry is loose (6) the infrastructure of the distribution service industry is
till weak and backward (7) the ability and capacity of the service provider
is weak.

2.3.3. Cause of shortcomings
(1) The awareness of the position, role of the domestic distribution
service for the national economy is not sufficient and profound (2) the state
management of the distribution service industry is ineffective, has a lot of
inadequacies (3) the industry structure is slow to be reformed, in order to


16
adapt to the changes of the distribution service market in the region and the
world (4) the resources of the distribution service industry are lacking and
weak.
2.3.4. Set issues to be solved.
2.3.4.1. For the state management work
(1) The State continues to accomplish and renovate the institution
in the direction of building the policy, the state management work must be
synchronous and consistent; The state management should rely on the
specific codes, standards and criteria of the industry. (2) The intervention of
the state is necessary in the case of facilitating the development of the
distribution service industry through the preferential policies on investment,
credit, land, infrastructure, training labors, providing information..

2.3.4.2. For the distribution service development
(1) The distribution service development is attached to the scale
and level of development with the national industrialization and
modernization, in the orientation of centralization, standardization and
socialization. (2) Renovate the structure of the distribution service industry
in a modern direction, combined harmoniously with the traditional forms to
form a complete structure suitable to the market in each area and region. (3)
Renovate the business mode of the distribution service industry in the
direction of improving the value added in the supply chain, developing
strongly the new business modes such as supply chain, convenience store
chain, franchising, trading floor.. (4) The increase in linkage of the
enterprises in the distribution service industry creates a perfect linkage that
makes foundation for the formation and development of cross-border
supply chains, increase the benefits of Vietnam in the process of
international economic integration, form the general strength of the system
and have capacity to orient the production industries.
CHAPTER III
SOLUTIONS TO DISTRIBUTION SERVICE INDUSTRY
DEVELOPMENT IN VIETNAM
3.1. Orientation of distribution service industry development in
Vietnam
3.1.1. Development trend of the distribution service industry in the
world
(1) The distribution service industry develops more and more
focused (2) the distribution service industry develops in a more competitive


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trend (3) the e-commerce changes the business direction (4) The service
internationalization process takes place strongly, the sales and purchase,

merger is the form that is often used to expand investment (5) The types of
goods that serve the daily life such as food, beverages and garments tend to
develop strongly (6) continue to develop own brands (7) the product quality
and customer service is of special interest.
3.1.2. Analysis of the distribution service industry in Vietnam
through SWOT model
- Opportunities, the period of 2016-2020 is the acceleration
period for implementing the national industrialization and modernization
goal; The issue of institutional reform has been determined as one of the
three breakthroughs; Our country integrates more deeply into the world
economy; The scale of the Vietnamese economy is growing; Opportunities
for the distribution service industry development in the modern direction.
- Challenges, the state management capacity on the distribution
service is weakened; The development lacks stability and is unbalanced;
The distribution market segment is more and more clear, not conducive to
the Vietnamese enterprises; The capacity of service providers is still weak;
The development is fragment, spontaneous, disorderly.
- Strengths, the Vietnamese economy is in the process of
development; The rapid increase in personal spending, the change in the
shopping way of consumers; The change in the distribution business
organization model in Vietnam is taking place strongly; The potential of
labor force facilitates the distribution service to develop. The dynamism of
the Vietnamese enterprises.
- Weaknesses, the policy mechanism is not synchronous; The
commercial infrastructure is weak, asynchronous: The majority of
enterprises in the distribution service industry has small and medium scale,
few capital. The distribution network develops unevenly. The distribution
service has not developed in depth.
3.1.3. Select the orientation of distribution service industry development
3.1.3.1. Perspective on the development of distribution services

(1) Developing distribution services should be linked to the
transformation of the growth model and the restructure of the economy
toward sustainability (2) Development of traditional distribution types
coupled with the development of modern distribution models, focused on
developing in depth (3) Diverse and harmonious development of


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distribution channels, forms of distribution (4) Strongly develop the chain
of convenience stores, supply chain links (5) Development of distribution
services associated with the integration process of the economy (6)
Strengthening the state management of the distribution service sector,
ensuring harmony between the interests of the state, enterprises and
consumers.
3.1.3.2. General orientation
(1) Develop the distribution service industry in line with the
transformation of the country’s economic growth model, attached to the
development scale and level, with the national industrialization and
modernization and industry restructuring (2) Develop a favorable business
environment, build a complete, transparent, equitable and consistent and
policy and law in order to concrete the conditions for the industry
development (3) Develop the distribution service industry in the direction
of organization, centralization, standardization and socialization to improve
the competitive power of the industry in the context of integration into the
regional and world markets (4) Develop the resources of the distribution
service industry.
3.1.3.3. Development orientation of service sub-industries
- Wholesale: Gradually overcome the fragment, small operation
situation with high cost in wholesale; Upgrade and expand the operation of
wholesale markets; Select to build some agricultural product wholesale

markets near to the large consumer centers; Develop the main types of
wholesale.
- Retail: Focus on giving priority to retail service development,
modernization of retail service, develop strongly the convenience stores,
specialized stores, towards to business in store chain; For the form of
traditional retail market, towards investing, upgrading and developing
diversified with many different scales and levels, attached to the formation
and development of urban areas, residential points, clusters and lines.
districts, communes; Not continue developing the market in the urban
market, focus on improving, upgrading the traditional retail market; Take
interest in investment in developing the traditional markets in the remote
and island areas; Develop the main retail types.
- Franchising: Strongly develop the franchising, take the
franchising mode as the decisive mode to develop the convenience store
chain; Encourage the development of local retail enterprises to develop
their store chain in the form of receiving franchise; Encourage the small


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business households to become the partners of franchising; Attract the
foreign franchising enterprises; Consolidate and develop the internal
strength of the enterprises that receive the franchise; Take interests in,
expand the form of franchising business to the provinces and districts in the
whole the country.
- Agents: Develop strongly the retail stores directly under the
distribution system of the group, corporation, and store of the system of
general agent, retail agents for some essential commodities and materials;
Attach importance to the development in the rural, mountainous and island
areas; Develop the trading and service co-operatives to become exclusive
agents of products for farmers; Improve the professional level of the agent

system, transform the method of hiring sales to providing the professional
services.
3.2.
Solutions to distribution service industry
development of Vietnam
3.2.1. General solution
3.2.1.1. Accomplish institution, business environment, improve the
state management capacity of the distribution service industry
(1) Build and promulgate a local trade development strategy for the
period 2016-2025 with a vision to 2035, in which mainly distribution
service; Build the policies and solutions to encourage the investment in
developing the commercial infrastructure; Amend and supplement the
relevant regulations in order to put the trade infrastructure projects into the
list of getting the preferential policies (2) Accomplish the policy on opening
the distribution service market. Amend and supplement the Decree
replacing the Decree No. 23/ND-CP; Review and finalize the relevant
regulations of the law on competition and control of economic
concentration (3) Build and promulgate the standards/criteria for
classifying wholesale, retail (4) Promulgate the professional guidance
Circulars in market management; consider to introduce the market into the
content of amending the Commercial Law (5) Study and promulgate the
legal normative documents at a higher level to adjust the issues within the
authority of other Ministries and branches in the development of
supermarkets, shopping centers (6) Build the Decree guiding specifically
the agent activity (7) Amend and supplement the policies on franchising
activity (8) Strengthen and improve the State management capacity for the
distribution service industry (9) The enterprises regularly consult and


20

contribute ideas directly with the State management agency on building the
policies and laws related to the distribution service industry.
3.2.1.2. Promote the industry restructuring process
- Reorganize the distribution and circulation systems (1) For the
agriculture, forestry and fishery industry, the State is the bridge to support
and establish the stable linkages between the trade enterprises and
producers. Build the project for developing the supply chains of agroforest, fishery products and fruit and vegetable with advantages of each
region (2) For the consumer goods industries, planning, organizing and
rearranging the distribution system reasonably by each region, area,
combine the modern distribution system with the traditional distribution
system (3) For the goods industries within the important and essential
aspect, promote the role of market orientation and organization of the large
enterprises.
- Encourage the formation, consolidation and creation of favorable
conditions for developing some enterprises with large-scale economic
scale. Develop strongly the convenience store chain, build the a General
Program, assist in order to transfer gradually more than 2 million existing
traditional business stores operating under the convenience store chain.
Encourage investment in developing the wholesale and retail markets in the
rural, mountainous and island areas.
- Select some key areas and regions for investing infrastructure,
upgrading to form the commodity trading center. Encourage and there are
mechanisms for the enterprises to do business in the form of franchising, ecommerce, Commodity trading center...
3.2.1.3. Develop the modern trade infrastructure,
combine harmoniously between the traditional trade and
modern trade
Build The trade infrastructure development program and introduce
into the list of targeted investment support Program; Guide the enterprises
to invest in trade infrastructure, mobilize capital through the public-private
partnerships; Plan and allocate land appropriately, prioritize and support in

site rental for the enterprises in the distribution service industry; For the
side of enterprises, it is necessary to take initiative in linking, merging and
finding favorable positions, proposing with the local authorities the
mechanisms for land conversion, relocation...; take the initiative in studying
the mechanisms and policies of the state for assistance in investment.


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3.2.1.4. Improve the service quality of the distribution service provider
Propagandize and dissemination the commercial business law in
order to improve the service quality of the market system; encourage,
support the use of modern equipment and techniques in the enterprises;
Design the training program for the industry only, attached to training at
address; Create capital sources for the distribution service industry by
creating favorable conditions for the domestic enterprises to accelerate the
process of capital accumulation through the form of economic
concentration and income tax incentives to support enterprises to
accumulate capital… For the side of enterprises, have the joint venture,
association between distributors and manufacturers, between distributors
and distributors to form sustainable linkage chains. Focus on enriching
customer service; Apply science and technology in sales management;
Renovate and diversify the sales method; Diversify and enhance the
customer service through the flexible services.
3.2.2. Solution to distribution service sub-industries
3.2.2.1. Wholesale, retail
- Encourage the enterprises that operate in the field of distribution
service to merge, reorganize and link with each other to become big
wholesalers and retailers. Encourage the enterprises to invest in developing
the traditional wholesale and retail market system in the remote and
isolated areas. Build the Program for upgrading the material facilities of

traditional wholesale, retail markets to ensure food hygiene and safety, fire
and explosion…
- In wholesale, form and select some logistics centers, wholesale
general warehouse to integrate into a closed supply chain from production,
processing and distribution. Form and develop the online trading floors,
markets, types of enterprise specializing online intermediate sales and
purchase on the basis of applying scientific advances in IT, firstly in the big
cities. Encourage attracting FDI enterprises to invest in and operate the
model of wholesale centers and commodity trading centers.
- In retail, build the specific support Program such as training in
sales skills, distribution management, encouraging retail households to
upgrade into the retail stores in modern, professional model, gather and link
with each other in chain; Encourage the business households to operate in
the chain of convenience stores, chain according to the franchising mode of
the local prestigious wholesale enterprises as agent or franchising type. The
state has a policy to protect the domestic retail system, especially the retail


22
stores of millions of business households. Form the shopping streets,
commercial areas, develop the tourist areas... in where the business
households are facilitated in business premises.
For the side of enterprises: Take initiative in creating the linkage
through the connection of related associations, creating the financial
strength, material facilities, techniques, personnel and trademarks to form
the supermarket chains, wholesale centers, wholesaler general warehouse...
that are modern and can compete with the wholesale and retail facilities of
FDI enterprises. Proactively seek and expand the area of operation to the
rural areas, step by step bring the types of modern distribution to access to
this area before the FDI enterprises arrived.

3.2.2.2. Agent
Encourage the domestic manufacturing enterprises to build multilevel agents to expand their distribution channels, especially encourage
expanding and developing agents in the remote areas. Facilitate the
establishment of commercial cooperative to operate as a general agent,
trade and service agent in the rural areas. For the side of enterprise,
Cooperative Union and Cooperative expand the retail network on the basis
of creating conditions for the business households to participate in their
business systems through the form of agent (purchasing agent and selling
agent), sales and purchase contract, participate in distribution chains (by
joint venture, association, concession...) to connect the independent stores
of business households with production, distribution and import and export
enterprises.
3.2.2.3. Franchising
Support the local trademarks to develop the business in the form of
franchising. Step by step introduce the franchising knowledge into the
universities and colleges so that the young Vietnamese entrepreneurs can
understand correctly and take interest in starting the business through
franchising. Study and accomplish some models of organization for
supporting the franchising activity in Vietnam such as establish
associations to create operating environment, experience exchange for the
enterprises, establish the comprehensive support consultancy service center
for the enterprises that receive franchise. For the side of enterprise, take
initiative in learn the information and carefully study the franchising
contract to select the franchising model suitable to their business lines,
strengthen and develop the internal force of the enterprise before moving to
application of franchise receiving model.


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CONCLUSION
The distribution service industry plays an important role in the
process of developing the economy, especially in the context of deeper and
deeper integration, the implementation of international economic integration
commitments has opened up many opportunities, at the same time it also
demands a lot of urgent issues that the current economy is in short. The
distribution service industry has achieved the encouraging results, however,
there are still many limitations affecting the development of the industry
such as: the system of mechanisms and policies, structure of the
distribution service industry, quality of the distribution service industry...
has not met the growing demand of the economy.
Originating from the above-said limitations, the research student
chose the Doctorial dissertation subject “Orientation and solutions on
distribution service industry development in Vietnam” with an aim to
clarify the theoretical and practical basis of proposing the direction and
solutions on distribution service industry development in Vietnam. The
dissertation has obtained the main results and has the following new points:
Firstly, the Dissertation established the basic theoretical framework
for the concept of distribution service and the concept of four distribution
service sub-industries: wholesale, retail, agent, franchising; introduced the
concept of distribution service industry development; established 3 industry
development contents; build four criteria for evaluating the development of
distribution service industry.
Secondly, the Dissertation has researched on the experiences of
distribution service industry development sector of some countries with
developed distribution service industry and many similar points such as
Japan, China and Thailand, draw experience lessons that should be applied
for Vietnam and lessons should not be used.
Thirdly, the Dissertation has deeply analyzed and evaluated the real
situation of the distribution service industry development, in which the

building of research model and selection to investigate the real situation of
the business facilities of the retail sub-industry is the service sub-industry
that has many typical factors for the distribution service industry
development in Vietnam, the results of the investigation and model analysis
have affirmed and enriched the evaluations on the real situation of the