The General Statistics Office (GSO) reported that in this year’s first eight months, the country’s total retail and consumption service revenue hit about US$117,3 billion, up 10.3% year-on-year.
The figure in 2016’s corresponding period amounted to US$104.9 billion, up 9.3% year-on-year.
Breaking down the figures, the total eight-month retail revenue reached nearly US$88 billion, up 10.3% year-on-year. The figure in 2016’s corresponding period stood at US$79.94 billion, up 9.7% year-on-year.
Vietnam’s retail revenue for the whole of 2016 sat at US$118 billion, up 10.2% over the previous year.
Government Office Chairman Mai Tien Dung said that domestic purchasing power is strongly increasing, retail-related activities including investment are thriving in Vietnam, and the country’s retail market has become one of the biggest new magnets to firms, especially foreign ones.
In an example of this growth, two weeks ago, Saigon Co.op put into operation its 87th supermarket in Vietnam-Co.op mart Dong Van Cong in Ho Chi Minh City’s District 2.
This is the firm’s 32nd supermarket in the city. The US$1.82 million supermarket covers over 4,000 square metres and sells more than 30,000 items between foodstuffs, cosmetics, fashion, and home appliances.
In late May, Saigon Co.op also opened its third Sense City shopping centre in the southernmost city of Ca Mau. The centre has been invested with capital of US$12.3 million. The first two Sense City developments are also in the Mekong Delta region, one in Can Tho city and the other in Ben Tre province.
It is expected that by late this year, Saigon Co.op will open the US$2.27 million Co.op mart Chu Se in the Central Highlands province of Gia Lai. This is a joint venture project between Saigon Co.op and Gia Lai Trade JSC.
On September 1, Korea’s leading distributor, DHL, set up a subsidiary in Vietnam, Vietmate. This development comes after a year of exploring Zalo’s e-commerce potential for distributing Korean products in Vietnam.
According to the Korea Chamber of Business in Vietnam (KorCham), Vietnam’s retail and consumption markets are strongly ascending, with an ‘ideal potential’ eyed by foreign firms, including Korean ones.
KorCham’s vice president Hong Sun said, “It is because Vietnam’s retail market remains truly underdeveloped. Under surveys, the country’s modern retail ratio currently occupies only nearly 30% of Vietnam’s total retail revenue.
Meanwhile, Vietnam is witnessing a golden population structure, with 42% aged under 25, in addition to attractive investment incentives.
“One of the other key reasons behind climbs in Vietnam’s foreign retailers is that the country is ranked second out of the 10 most attractive retail markets in Asia,” he stressed.
According to KorCham, over the past few years, foreign firms are finding ways to enter Vietnam’s retail market via mergers and acquisitions with local firms, such as between CJ and Cau Tre, Lotte and Bibica, Masan and Vissan, F&N and Vinamilk, TCC and Metro Cash & Carry, Vingroup and Ocean Retail, and between Central Group and Casino Group.
“It is notable that many large industrial conglomerates of Korea such as Samsung, LG, Lotte, CJ, and Daesang Corp intend to invest much more into Vietnam-especially after the Korea-Vietnam Free Trade Agreement took effect in December 2015,” Sun said.
Since 2015, Vietnam’s government has allowed the establishment of wholly foreign-invested retail firms in the country. Under ASEAN Free Trade Area commitments, the import tariffs of about 10,000 types of goods will be removed by next year among ASEAN member nations.
“This will also offer ideal opportunities for foreign retailers to penetrate Vietnam,” Sun said.