Prevention of trade fraud in the retail market

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The presence of many international retail brands in Vietnam shows that the demand for domestic shopping is increasing. However, besides the fierce competition to dominate the market, trade fraud has appeared and there are signs of increase with many unfair competition tricks.

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Over the years, the economy has grown, people’s lives have improved, contributing significantly to changing shopping habits of Vietnamese people.

In big cities, instead of shopping at popular markets or small grocery stores, consumers tend to look to retail brands and e-commerce websites to choose their favorite products.

According to the Vietnam Retailers Association (ARV), Vietnam is in the list of 30 countries with the most vibrant retail market in the world.

The survey by A.T.Kearney, a U.S. management consulting firm, also showed that retail is one of the six largest foreign investment attracting sectors in Vietnam.

Vietnam retail market is attracting not only domestic businesses but also brands from regional and international markets such as Alibaba, Walmart, 7 Eleven, Circle K, GS 25.

Meanwhile, many multidisciplinary corporations such as Vingroup have also participated. this potential market. The group is aiming to open a Vinmart retail system by 2020 with 200 supermarkets and 4,000 convenience stores.

However, besides the bright points, Vietnam retail market still has many worrying issues such as import status, deceitful origin, quality of goods, false advertising, consumption of counterfeit goods, poor quality goods.

After the scandal of Khaisilk Group, a leading silk brand in Vietnam selling products originating from China in 2017, many other names are quite familiar with domestic consumers such as Miniso, Mumuso, Con Pet are also entangled with complaints about the origin of their brands and products.

In 2015, shipments of up to 100,000 counterfeit products by a northern low-cost cosmetics distributor were arrested by the Hanoi Market Management Department. Similarly, in 2017, a cosmetic retailer was also accused by the Market Management Department (Ministry of Industry and Trade) of importing products of unknown origin, worth more than VND 11 billion.

Consumers are also losing faith in some online brands that sell counterfeit goods.

It can be said that violations are increasingly sophisticated and complicated due to the application of modern technology, the formation of cross-border smuggling networks involving many objects and businesses.

In addition, counterfeit goods and poor quality goods are dominant in the market due to overlap in legal documents;

  • lack of manpower and equipment
  • loose coordination between industries
  • poor local awareness campaigns
  • and increasingly sophisticated smuggling tricks

In many localities, such as the Vietnam Association of Science and Technology Standards and Consumer Protection, the Consumer Protection Association still operates sketchily, even ineffectively.

In addition, the level of administrative sanctions for acts such as trafficking, producing counterfeit goods is very low.

Moreover, many domestic manufacturers themselves are less interested in protecting their products, while the investment in building traceability stamps and anti-counterfeit stamps is limited.

In order to build a healthy business environment of the retail market, protecting the interests of consumers, it is necessary to have the drastic and synchronized competition of relevant agencies, associations, businesses and consumers. Especially, violations related to production and trade of counterfeit goods and poor quality goods must be strictly handled.

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