Key Challenges for SMEs in Vietnam’s General Trade (GT)

For SMEs, entering General Trade (GT) Vietnam is both necessary and difficult. GT accounts for the majority of Vietnam’s retail market share, making it an unavoidable channel for consumer goods. Yet, this dominance comes with barriers: consumer loyalty to familiar brands, fragmented logistics, and limited data transparency all create challenges for SMEs introducing new products.

Traditional markets such as Bến Thành in Ho Chi Minh City and Đồng Xuân in Hanoi, alongside bustling retail streets, illustrating the challenges of General Trade (GT) Vietnam for SMEs entering the market.

Consumer Loyalty and Brand Recognition in General Trade (GT) Vietnam

One of the biggest hurdles for SMEs is consumer trust. Vietnamese shoppers are accustomed to well-established brands such as Vinamilk, Masan, or Unilever. Mom-and-pop shops—the backbone of GT—are reluctant to stock products without strong brand recognition, as they fear slow turnover or unsold goods.

For SMEs with new products, this often means limited shelf space or acceptance only in very small quantities. Without consumer pull, retailers resist push strategies, creating a “chicken-and-egg” problem for market entry.

A traditional mom-and-pop grocery store in Vietnam, reflecting how consumer trust in familiar brands makes it difficult for SMEs to introduce new products.

Fragmented Logistics and High Distribution Costs

With more than 1.4 million GT outlets nationwide, the distribution system is highly fragmented. SMEs must deliver products store by store, which drives up both cost and complexity. Unlike Modern Trade (MT), GT does not operate on centralized warehousing or consolidated orders.

For new entrants without an extensive logistics network, this means higher last-mile costs and inefficiencies. Reaching a significant number of outlets quickly becomes resource-intensive, especially for SMEs with limited budgets.

Motorbike overloaded with goods for delivery to multiple GT outlets, highlighting fragmented logistics and high distribution costs in General Trade (GT) Vietnam.

Negotiation Power Lies with Shop Owners

In GT, power often resides with the shop owner. Each outlet decides what to stock, based on personal judgment and customer demand. For SMEs, this means:

• Offering higher trade discounts to incentivize trial.

• Providing free samples or point-of-sale materials.

• In some cases, leaving goods on consignment, where payment is only made if the product sells.

These practices put SMEs at financial risk, with tied-up capital and potential losses if products fail to move.

Limited Data and Market Insights

Unlike MT, GT operates with low data visibility. SMEs often cannot track real-time sales, inventory levels, or consumer behavior at the store level. Decisions rely heavily on relationships with distributors and anecdotal feedback from shopkeepers.

This lack of transparency makes it difficult for SMEs to measure ROI, optimize pricing, or adjust distribution strategies effectively. As a result, even strong products can struggle to scale without structured insights.

Handwritten sales and customer notes in a shopkeeper’s notebook, showing how GT outlets still lack digital systems for data tracking.

Solutions for SMEs Entering General Trade (GT) Vietnam

While challenges are significant, SMEs can adopt strategies to overcome them:

• Start small: Pilot launches in selected districts or provinces before scaling nationwide.

• Build brand recognition early: Leverage O2O strategies (online-to-offline) to generate consumer demand before approaching shopkeepers.

• Work with distribution partners: Collaborating with an experienced local partner like Go2Market (G2M) Vietnam helps SMEs leverage existing networks, reduce logistics costs, and accelerate shelf placement.

• Support shopkeepers: Providing training, merchandising materials, or simple digital tools can build trust and encourage adoption of new products.

Breaking into General Trade (GT) Vietnam is rarely easy for SMEs. Consumer loyalty to familiar brands, fragmented logistics, and limited transparency create real barriers. Yet, with the right entry strategy and the support of trusted distribution partners, SMEs can overcome these obstacles.

By combining grassroots GT penetration with modern trade and digital channels, SMEs can establish their presence in Vietnam’s fast-growing retail ecosystem. With its end-to-end distribution solutions, Go2Market (G2M) Vietnam stands ready to support SMEs on this journey.