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New Supermarkets Challenge Vietnamese Traditional Markets, Street Vendors

As Vietnam's economy expands and consumers get richer, traditional markets and street vendors are facing increasing competition from big supermarket chains. The government sees "superstores" like Thailand's Big C as a symbol of economic progress, but some people fear they could harm Vietnam's culture, and its poorest citizens. Matt Steinglass reports from Hanoi.

Vendors are a familiar part of Hanoi street life. Carrying their goods in twin baskets suspended from shoulder poles, or on the backs of bicycles, they sell everything from dragonfruit and sticky rice to whisk brooms and plastic buckets.

But their trade is not legal. Fruit vendor Hoa had just been chased away from her spot behind Dong Xuan Market by a security agent.

Hoa says she is scared of the police, who often fine her $5, more than she makes in a day. But she has no other way to survive, so she will come back and try again another day.

Now, street vendors have more to worry about than just the police. Per-capita income in Vietnam is growing by eight percent a year, and modern supermarkets are proliferating in the country's cities. Newcomers include Thailand's Big C, and Germany-based Metro Cash & Carry.

A recent conference in Hanoi, sponsored by the organization, Markets for the Poor, discussed the impact of supermarkets on poor people. One speaker was Paule Moustier, an agricultural economist with the MALICA research consortium, who studies produce supply chains in Vietnam.

"The supermarkets in fact do not create as many jobs as the street vending or the normal markets, because they want to save on labor cost," he said. "Supermarkets will have to squeeze prices, and they will have to pay farmers lower and lower prices. That is the trend we observe in Europe and the U.S."

Moustier also says that supermarkets are too expensive for poor consumers.

It is a debate that recurs frequently as Asian nations modernize. Hong Kong and Singapore have issued tight restrictions on street vendors. India is debating the imminent arrival of the U.S.-based superstore, Wal-Mart, and what affect it will have on the millions of small shop owners there.

Many Vietnamese officials say they would be happy for supermarkets to replace traditional street vendors entirely. Ho Quoc Khanh works at the Hanoi Department of Trade.

He says the Hanoi government has been trying to clear the streets of vendors since 2002, because they disrupt traffic and public security, and make foreign visitors think Hanoi is just one big market. He is also concerned whether the food they sell is clean.

The vice chairman of a Hanoi district People's Committee, Luu That Thang, also thinks the vendors are a problem.

Besides the food hygiene problem, Thang says, street vendors make the city less beautiful. He says the government should license the vendors, and assign them to specific areas.

But many people, both locals and visitors, feel the traders make Hanoi more interesting.

Tran Le is a reporter at the Vietnam Economic Times newspaper.

Le says street vendors are part of Vietnamese culture, and that he will remember the sales cries of chicken-soup vendors until the day he dies. He says giving vendors licenses and restricting their movements would be like going back to the old communist planned economy, and would never work.

Paule Moustier agrees that much would be lost if the vendors disappeared.

"For many people, both Vietnamese and foreigners, the street vendors add to the beauty of the city, because it is so nice to see women in conical hats on their bikes and motorbikes, and very colorful products, vegetables and flowers," he added. "It is quite biased that the Vietnamese administration in Hanoi say they are harmful to the beauty of the city."

At a Hanoi branch of Metro Cash & Carry, there are no conical hats or cries of "chicken soup" - just supermarket pushcarts, and the ringing of cash registers.

Customers have flocked here since the massive store opened three years ago. One reason given by many consumers: you do not have to bargain.

An army officer, An, 37, says she finds the vegetables at Metro "safe." The prices are cheap too, she says, but the main thing is safety.

In fact, researchers say the levels of pesticides on supermarket produce are only slightly lower than street vendors'.

Moustier says ideally, Vietnam should promote a mixed retail economy of farmers' markets, street vendors, and supermarkets.

But for the moment, street traders will have a hard time competing with supermarkets for the money of Vietnam's increasingly prosperous shoppers, and Hanoi's police continue their off-and-on campaign to drive them out.

But for vendors like this orange seller, the government's efforts will have little effect.

She says the police fine her all the time, but she keeps coming back to sell here. She does not have any other way to make a living.