Vietnam’s retail market has a scale of more than US$142bil, 16% of which comes from eCommerce, according to the Industry and Trade Ministry. — Vietnam News
HANOI: Vietnam, with a population of nearly 100 million people, is considered a potential investment market for famous retailers around the world and therefore, many foreign retailers have enhanced their investments.
According to the Industry and Trade Ministry, Vietnam’s retail market has a scale of more than US$142bil, 16% of which comes from eCommerce. This scale is forecast to increase to US$350bil, or nearly 2.5 times higher, by 2025.
The retail based on eCommerce platforms is also growing at an exponential rate. E-commerce businesses in Vietnam gained a revenue of US$14bil by 2022, and the revenue is expected to reach US$32bil by 2025.
These figures show the huge potential of Vietnam’s retail market for enterprises at home and abroad.
A supermarket is still considered an attractive retail option in Vietnam, with diverse products, a seamless customer experience, and guaranteed product quality.
Data from Euromonitor shows that supermarket revenue in 2023 is estimated to reach about 110 trillion dong, an increase of 8.8% over the previous year.
These figures confirm a significant change in consumer shopping behaviour.
Vietnam has witnessed excitement in the domestic retail market from the first months of the year until now, when a series of big brands in the foreign retail industry has announced an increase in investment capital to this market.
Among them, Muji – a famous retail brand for lifestyle, leather goods and office furniture from Japan, has expanded its retail system in Hanoi and Ho Chi Minh City to 11 stores.
Meanwhile, Uniqlo – another big brand from Japan, also opened its 19th store in Hanoi, which is the fourth new store in the first half of 2023.
Additionally, in recent years, many large Thai enterprises have also evaluated Vietnam’s retail market as one of the most potential and attractive markets.
Therefore, Central Retail Group, a giant in Thailand’s retail industry, has announced a schedule to increase investment capital in Vietnam to US$1.45bil in the period 2023 to 2027, along with the goal of doubling the number of stores and supermarkets in Vietnam to 600 in 57 out of 63 provinces and cities. This is considered the largest investment ever announced by Central Retail.
To implement those goals, this year, the company has spent about 4.1 trillion dong in the Vietnam market, focusing on developing essential foods businesses, stabilising prices, and restructuring electronic stores.
Central Retail also aims to become the largest multi-channel retailer in the food industry, and the second largest investor in the shopping centre segment in Vietnam’s real estate market by 2027.
Meanwhile, local retailers still dominate the domestic market, accounting for 70% to 80% of total retail sales points nationwide. There are big brands with thousands of sales points such as WinMart, Co.op Mart and Bach Hoa Xanh.
However, foreign retailers’ investment in the Vietnam market also puts certain pressure on domestic retailers. This situation urges domestic businesses to find ways to compete with foreign rivals.
In the past few years, Vietnamese businesses expanded their retail market share strongly in the segment of supermarkets and convenience stores.
Of which, in mid-2018, Saigon Co.op acquired the entire retail system of Auchan (France) in Vietnam. In 2019, Singapore’s Shop&Go also sold its business in Vietnam to VinCommerce.
Last year, Thiso International Commerce and Services Corp (Thiso), a subsidiary of Thaco Group, completed the acquisition of South Korea’s Emart Inc’s business in Vietnam.
Along with implementing the merger and acquisition activities with foreign brands in Vietnam, many domestic retailers have also expanded their retail systems in the domestic market.
Notably, Vingroup’s Vincom Retail system owns more than 80 shopping centres nationwide. The WinMart and WinMart+ retail chains, with more than 3,500 convenience stores, are constantly opening new sales points.Although the market is very competitive, economic experts still believe that Vietnamese retail businesses will have a solid foothold in the domestic retail market due to the advantages of understanding Vietnamese consumers, implementing digital transformation, and restructuring human resources.
To maintain their market shares, expert Vu Vinh Phu said that Vietnam companies need to improve in all aspects, from training professional human resources to building modern infrastructure, meeting the needs of the digital age to continue development in the retail sector.
Retail enterprises must always link to producers of Vietnamese goods, especially agricultural and food products, to ensure stability for the input of the distribution system. — Viet Nan News/ANN
