Overcoming Key Challenges in Modern Trade (MT) Vietnam

Modern Trade (MT) in Vietnam is expanding rapidly and seen as a “gateway” for SMEs to reach consumers. With over 16,000 outlets and $57 billion in revenue in 2024, MT represents a highly attractive retail channel. Yet entering Modern Trade (MT) Vietnam is far from easy. SMEs often face hidden challenges—from upfront costs and cash flow pressure to fierce competition on supermarket shelves.

Supermarkets, convenience stores, and minimarkets in Vietnam, reflecting key Modern Trade (MT) Vietnam challenges for SMEs.

Strict Requirements from Modern Retail Chains

To get listed in MT, SMEs must meet a series of requirements:

• High listing fees, sometimes hundreds of millions of VND for a single SKU.

• Full legal documents including food safety certification, product testing, barcode registration, and product declaration.

• Standardized packaging and labeling, from design to nutritional information.

For SMEs with limited experience, these requirements often lead to rejection at the initial stage.

Price Pressure and Heavy Promotions

Once listed, SMEs face significant discount demands from retailers, typically 15–30% or more.

In addition, retailers require suppliers to participate in frequent promotional campaigns such as price cuts, buy-one-get-one offers, or special displays. Refusal may result in reduced visibility or even removal from shelves. This pricing pressure makes it difficult for SMEs with small production scales to sustain profitability.

Arrows showing rising costs and shrinking margins, symbolizing price pressure and heavy promotions in Modern Trade.

Late Payments and Cash Flow Risks

One of the biggest Modern Trade (MT) Vietnam challenges is delayed payment terms: most retail chains settle invoices 30–90 days after sales.

For SMEs with limited working capital, this creates serious cash flow problems. “Frozen capital” prevents companies from reinvesting in production, trade marketing, or expansion. Many SMEs fail not because of lack of demand but because they cannot sustain operations while waiting for payment.

Fierce Competition on the Shelf

Shelf space in MT is limited and highly competitive. Established brands secure prime positions with strong trade marketing budgets, while SMEs often struggle to stand out.

Without investment in in-store promotion, merchandising, or activation, new products risk being overlooked by shoppers. Poor sales performance may quickly lead to delisting.

Products displayed on supermarket shelves, showing fierce competition for visibility in Modern Trade Vietnam.

How to Overcome Modern Trade (MT) Vietnam Challenges for SMEs

To improve their chances of success, SMEs can consider the following strategies:

• Standardize products and legal compliance: prepare full documentation, certifications, and retail-ready packaging.

• Develop a clear pricing and discount strategy: account for listing fees, promotions, and retailer margins from the start.

• Manage cash flow wisely: secure working capital reserves for at least 3–6 months to withstand late payments.

• Invest in point-of-sale presence: allocate budget for promoters, merchandising, and attractive displays.

• Partner with local experts: work with experienced distributors or market entry consultants to shorten timelines and optimize costs.

Modern Trade is a massive opportunity, but also a minefield for unprepared SMEs. High listing fees, discount pressure, slow payments, and intense shelf competition are everyday realities in Modern Trade (MT) Vietnam.

Success requires more than a good product—it demands financial preparation, a clear go-to-market strategy, and strong execution at the point of sale. This is where the right partner matters. Go2Market (G2M) Vietnam helps SMEs and international brands access MT efficiently, supporting negotiation, distribution setup, and sales execution, ensuring cost savings and higher success rates in the Vietnamese retail market.