What is MT? Difference between MT channel and TT and GT channels

MT, or Modern Trade, is one of the evolving forms of commerce, particularly in developing countries. So, what is MT, and how does it differ from traditional channels? Let’s explore these details with Kamereo in the following article!

Table of Content

Table of Contents

1. What is MT?
2. Types of Modern Trade:
3. Advantages and Disadvantages of MT:
   1. Advantages
   2. Disadvantages
4. Distinguishing MT from TT
5. Distinguishing MT from GT
6. Considerations for Developing MT
   1. Implement Main Shelf Strategy
   2. Understand Market Products
   3. Try Using Secondary Shelf Strategy
   4. Interact with Customers
   5. Combine with Digital
7. Conclusion

What is MT?

MT stands for Modern Trade, a form of contemporary commerce or a modern distribution channel. The concept of MT first appeared in India, and its strength lies in optimizing the supply chain to increase profits. As a result, MT has gained widespread development worldwide, especially in the United States and China.

In general, distributors in the MT channel are professionally managed, covering inventory management, buying and selling, and supply chain maintenance.

Types of Modern Trade:

After understanding what Modern Trade is, let’s delve into the types of businesses participating in this channel:

• Hypermarket: Combines a retail store with a grocery store. Hypermarkets typically have an area ranging from 5,000 to 15,000 square meters, offering over 200,000 products from various brands. Examples include Aeon, Lotte, etc.
• Supermarket: Self-service retail stores offering a variety of food, beverages, and household products. Supermarkets usually have an area ranging from 1,000 to 5,000 square meters, with a capacity of over 100,000 products. Examples include Co.opmart, Mega Market (MM), etc.
• Convenience Store: Small retail stores providing essential daily items such as food, beverages, snacks, and personal hygiene products. Convenience stores typically have an area ranging from 100 to 500 square meters, offering over 10,000 products. Examples include MINISTOP, Circle K, etc.
• E-Commerce: Commercial transactions conducted over the internet. Examples include Shopee, Lazada, Tiki, TikTok Shop, etc.

Advantages and Disadvantages of MT:

Besides understanding the concept of MT, it’s essential to consider the following advantages and disadvantages:

Advantages

• Businesses and manufacturers can manage goods directly.
• Easy identification and access to target customers.
• E-commerce platforms can utilize specialized retail channels with independent brands.

Disadvantages

• MT is a relatively new field, and many lack the experience to apply it effectively.
• Participants in modern trade often concentrate mainly in large cities, leading to uneven distribution.

Distinguishing MT from TT

MT is considered the opposite of Traditional Trade (TT), and there are several differences between the two:

1. Sales Model:

• MT: Self-service with the use of information technology.
• TT: Direct sales through traditional distribution channels.

2. Scale:

• MT: Large store chains.
• TT: Small retail stores.

3. Management System:

• MT: Centralized management of goods at one location, professional management.
• TT: Goods distributed through various levels.

4. Product Variety:

• MT: Diverse, catering to various customer needs.
• TT: Limited, mainly essential products.

5. Price:

• MT: Relatively high.
• TT: Relatively low.

6. Location:

• MT: Everywhere.
• TT: At the store.

7. Customer Convenience:

• MT: Diverse, such as various payment options, home delivery services.
• TT: Limited.

Although MT has many advantages, TT provides convenience in terms of location and price. Therefore, despite the significant development of MT, traditional commerce continues to coexist and develop.

Distinguishing MT from GT

Another frequently mentioned form of commerce is General Trade (GT), known for traditional product distribution. Here are the distinctions between MT and GT:

1. Sales Model:

• MT: Self-service with the use of information technology.
• GT: Direct sales using traditional distribution channels.

2. Scale:

• MT: Large store chains.
• GT: Small retail stores.

3. System Nature:

• MT: Centralized management of goods at one location, professional management.
• GT: Goods distributed through various levels.

4. Product Variety:

• MT: Diverse, catering to various customer needs.
• GT: Limited, mainly essential products.

5. Price:

• MT: Relatively high.
• GT: Relatively low.

6. Customer Convenience:

• MT: Diverse, such as various payment options, home delivery services.
• GT: Limited to some standard requirements.

GT shares many similarities with TT but on a larger scale. Manufacturers in GT rely on distribution channels to reach consumers, while MT shortens this process. Consequently, the operating costs of modern commerce are higher, leading to increased selling prices.

Considerations for Developing MT

If you are looking to develop sales through modern trade, a clear plan is essential. Here are some considerations:

Implement Main Shelf Strategy

Positioning your brand prominently on store shelves to attract customer attention is crucial. This strategy helps your product stand out and compete effectively.

Understand Market Products

Knowing the position of your product in the market is essential. This helps develop suitable business and marketing strategies, optimizing revenue performance.

Try Using Secondary Shelf Strategy

While many businesses apply secondary shelf strategies for temporary gains, it requires substantial investment. To succeed, ensure that your product attracts attention and interest from shoppers.

Interact with Customers

Utilize modern trade channels to open stalls in large supermarkets, effectively enhancing interaction with customers. Negotiation skills and specific strategies are crucial for success.

Combine with Digital

In the era of Industry 4.0, brand accessibility is not limited to direct channels. Integrating flexibly with digital channels creates a personalized shopping experience, impressing customers and boosting sales.

These factors help bring your product to customers quickly, creating effective sales campaigns and increasing revenue for your business.

Read more:

• Compile 6 addresses of beer suppliers, distributors in Ho Chi Minh City
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Conclusion

I hope this article has clarified what MT is. While it is a rapidly growing form of commerce, it does come with considerable costs. Therefore, you can explore other forms to optimize your business operations. Don’t forget to follow the Business Tips section for useful information!

Currently, Kamereo provides a wide range of products, including vegetables, meat, seafood, beverages, spices, and many other foods for stores, restaurants, supermarkets, etc. If you need to bulk order within a specific timeframe, quickly contact Kamereo to get assistance from their staff.

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