In the article "Strategies That Fit Emerging Markets", Metro Cash & Carry was exemplified as a company that changed the market contexts in which they operated. This triggered my recent visit to Vietnam, in which I saw the complete establishment of Metro in my hometown. It was only four years ago that it began its development; now it is a fully operating company in a developing country.
Studies have enumerated the various benefits foreign companies can provide to developing countries, such as more jobs and better products. The shift from roadside markets to large warehouses provides Vietnamese residents with fresh, healthy foods. Multinationals existence in developing countries also benefit local governments because it provides them with much needed tax money. Given these benefits, it must be a win-win situation for Metro and Vietnam, right?
Not necessarily. In my last visit to Vietnam, I rarely saw any local Vietnamese people enter Metro. Although it was built in a central location, the parking lots remained relatively empty. Besides the wealthy, most Vietnamese people were content and accustomed with the old-fashioned roadside markets. Culture definitely has a lot to do with an individual's preference. The development of strategies to enter emerging markets must take culture into account.
Side-note: I can't see Metro being profitable in Vietnam in the next 5-10 years. There are too many cultural and social obstacles that need to hurdle. First, Vietnamese households do not store foods lasting longer than 1 or 2 days (tops). Most families buy groceries on a need-basis, buying only what is needed for that day's meal to prevent spoiled and uneaten foods. Second, most households do not have refrigerators or freezers to keep food from spoiling. The lack of storage devices contributes to the limited groceries.
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