VN Tops A.T. Kearney's Year List of Most Attractive Emerging Market Retail Destination

In its 7th annual Global Retail Development Index (GRDI) study, A.T. Kearney, the global management consulting firm, has ranked Vietnam to the top of its 2008 list, bypassing the 3 year recorder holder, India, of the most attractive emerging market destinations for retail investment.

"Vietnam's leap from fourth in the 2007 GRDI to first place in 2008 was driven by strong GDP growth, changes to the country's regulatory structure favoring foreign investors, and increasing consumer demand for modern retail concepts." according to A.T. Kearney.

India, Russia and China, the top three countries in last year's GRDI, now took up second, third and fourth seats, respectively, the study reported, due to high real estate costs in large cities. It says growing competition have decreased their attractiveness relative to prior years and forced retailers to look for opportunities in tier II and III cities.

"While Vietnam's $20 billion retail market pales in comparison to India or China, the absence of competition and 8 percent GDP growth make it an attractive expansion opportunity for global retailers. Vietnamese consumers are among the youngest in Asia, with 79 million below the age of 65, and increased their consumer spending by more than 75 percent between 2000 and 2007. The country is growing increasingly urbanized and concentrated with more than one million people a year migrating into the two large cities of Ho Chi Minh and Ha Noi", A.T. Kearney said.

The Vietnamese government is expected to remove controls on 100 percent foreign ownership of retailers in the country and has established a new program to develop wholesale and retail real estate by 2010.

"The Vietnamese consumer is seeing rapidly growing per capita income and regulations are drastically opening up the market for new entry," said Mike Moriarty, a partner with A.T. Kearney and co-leader of the GRDI. "Now is the perfect time to get involved. It won't be easy and you'll be a pioneer.

PRNewswire, CNBC.

*GRDI helps retailers prioritize their global development strategies by ranking the retail expansion attractiveness of emerging countries based on a set of 25 variables including economic and political risk, retail market attractiveness, retail saturation levels, and the difference between gross domestic product growth and retail growth. The GRDI focuses on opportunities for mass merchant and food retailers, which are typically the bellwether for modern retailing concepts in a country.