HCMC - Ben Thanh Trading and Marketing Co., owner of Best Carings electronics store chain in Vietnam under a franchise agreement with Japan’s Best Denki, has transferred its chain to another local firm named Mitsustar.
Under the transfer agreement, the chain including three Best Carings electronics goods stores in Hanoi, Can Tho and HCMC is handed over to Hanoi-based Vietnam Electronics & Refrigeration Technology Corporation, or Mitsustar. Ben Thanh will focus on electronics wholesaling.
Best Carings electronics goods store chain has been operational since 2004 as the strategic franchising cooperation between Ben Thanh and Japan’s Best Denki.
Ben Thanh affirmed that the chain’s business situation in the last years was very well. In 2009 and 2010, Retail Asia, a famous magazine in Singapore, selected Best Carings electronics goods stores as one of the ten leading retailers in Vietnam and one of the top 500 Asia-Pacific retail companies, according to the company.
In reality, Ben Thanh is also owner of Tara Joint Stock Co. specializing in electronics wholesale. After a long time running Best Carings, the management has realized that there exist some conflicts of interest when trading both brands, so they decided to transfer all stakes of Best Carings to the new owner to focus more on developing the Tara Joint Stock Co.
This means that Best Denki, one of the five leading electronic retail corporations in Japan, will no longer cooperate with Ben Thanh to open more Best Carings in Vietnam as per the two companies’ initial plan.
Previously, Ben Thanh and Best Denki had plans to cooperate to set up a joint venture to expand the store chain in Vietnam. However, during the process to establish the joint venture, the two partners has met difficulties.
For example, the foreign partner required Ben Thanh to step up the search for good locations in big cities to open more stores covering at least 2,500 square meters each, which is quite difficult in HCMC or Hanoi, the local company said.
Besides, under the WTO commitments, international retailers will face difficulties in expanding their operations after their first outlet. The ENT (Economic Needs Tests) principle will be considered by authorities when licensing the second retail point of foreign investors.
This means Vietnam will have the right to consider licensing based on three criteria: the number of retailers in a locality, the stability of the market and the scale of the residential neighborhood.
Experts said that to date, there is no legal document giving clear instructions on how to define ‘economic needs’ and interpret the three criteria. The term ‘retail point’ has also not been clearly defined.
The lack of legal documents and definitions of concepts is believed to create difficulties for enterprises when making business decisions, and for state management agencies themselves in management work.
Previously, Ben Thanh has plans to open ten shops around the country by 2012.
Ben Thanh has deployed Best Denki management technology, marketing skills and customer services in its new store chain. As a member of Best Denki, Best Carings was not only equipped with retailing skills and experiences, but also benefited from suppliers who are long-term partners of Best Denki.
