The stores have been expanding with two models. The first is the chain which mainly sells articles of daily necessity. Circle K, FamilyMart and Ministop belong to this group.
The second is the hybrid between single-price shops which were once very popular, and convenience stores, such as Miniso, Ilahui and Mumuso.
After one year, Ilahui is leading the chains in terms of network scale with 31 shops, followed by Miniso with 24 shops and Musumo with 13.
The brands all stated that they will increase the number of sale points by 10 times in 1-2 years. Bui Ngoc Quynh Giao, CEO of Ilahui, said that to be able to bring a brand to Vietnam, master franchisees have to commit to open 20-30 shops a year with the minimum cost of US$100,000-200,000 for each shop.
Convenience store chains try to expand as soon as possible because this can cement their positions in the market.
Vietnam is ranked sixth globally in retail market development by A.T Kearney, up by 5 notches compared with last year’s ranking. Convenience store and mini supermarkets are the two fastest developing segments.
The number of product items available at convenience stores is high, about 4,000-10,000 which have prices in certain ranges. Household goods, teddy bears, travel accessories and cosmetics are the best sellers.
At Miniso, products need to have new design to attract youth. Most products available have the selling prices at low and medium levels.
Miniso Vietnam’s director Duong Thanh Tam said 600 partners make products for Miniso, and the chain does not make transactions through intermediaries. It does so to to get the best price and pursue the principle that it won’t raise the selling price.
A report shows that the growth rate of convenience stores and mini supermarkets in Vietnam was 200% in the last three years, while the number of groceries decreased from 62% to 52%.
There are 1,600 convenience stores, according to Nielsen, while convenience store chains will continue expanding rapidly because the population is young and Vietnamese are changing their shopping habits.
An analyst noted that while in other countries, retail brands are mostly at shopping centers, in Vietnam they scramble for locations near residential quarters, office buildings and schools because most consumers ride motorbikes and want to buy things at the shops on streets.
Giao said it took Ilahui eight months to prepare for the opening of the first shop as it was difficult to find retail premises to rent.